On 11th March 2020, when the World Health Organization declared Covid-19 as a global health crisis the world economy was shaken to its core. The pandemic affected the travel and tourism sector, food services sector, the retail markets, the real estate market, fitness, wellness sector. Around 12.2 crore people in India lost their jobs according to the report by India Today. Most of this unemployed workforce is the youth, daily wage workers, laborers, small retailers, small scale business operators, startups owners.
We are halfway through the year and slowly our nation is getting back to normalcy. Various public places are unlocking.
Amidst this financial crisis, how to survive appears to be impossible. Let us look at the four tips that can help us survive what is coming with the end of the year.
The global economic crisis during COVID-19 has caused people to sell their equity in the market. Many exited the market. Which is not a smart move. Due to selling off of their shares, properties, or other valuable assets during the pandemic out of panic to obtain funds many people have incurred losses and have agreed to the deals that were lower than the actual worth of the share.
The market is subjected to highs and lows, those who can bear through the tough times with patience will enjoy the fruitful returns later. As the pandemic is getting contained, the market will gradually return to its pace. For instance, when various industries will begin the operations again there will be a lack of competition and that will cause an increase in demand and supply ratio. The declining number of small-scale producers, retailers, or sellers which was large and scattered before the COVID-19 hit. The big businesses with large monetary funds will suffice and will sufficiently get through the unproductive period.
With only few and big dealers, producers, sellers left in the market, it will lead to monopoly.
As mentioned above, around 12.2 crore people have lost their jobs during COVID-19. The monthly budgets have broken down completely. In order to prevent this crisis turn into long term adversity, the need of the hour is to maintain an adequate ratio of cash reserve ready at hand. The pandemic spread at a fast pace, declined, and again raised. The possibility of a second wave hitting our nation by the end of the year is high. Thus, cash in hand will rescue at times of emergency of any sort. Also when the market becomes normal cash will be beneficially deployed into markets, following the rule to buy low and sell at a high rate.
It is high time for households, small business owners to re-evaluate their budgets. With the sudden stop to all economic and noneconomic activities, the inflow of income has declined. Since as the complete national lockdown is taken as the preventive measure by the end of March, the requirement to spend has decreased subsequently.
The limited cash or savings are to be spent only on purchasing the basic necessities. As a consequence less and lesser money is to be spent on food, clothes, traveling, gyming, or other sources of entertainment such as movies, theatre, concerts, etc. The cost of living has declined as the world goes into isolation. Therefore, a budget set to meet the basic needs discarding the extra or superfluous expenditure can help us survive longer even with a limited amount of money or savings.
Also, it becomes an opportunity to analyze how much you can save when you eliminate the non-essential expenditure which will help you identify and examine your actual potential to save. As the pandemic is not going to get over in a blink of an eye and things will not be possible back to normalcy at a fast rate, it might take longer than a year or two. Thus, the skills to save have to be kept in practice in the long run.
Banks and other lenders are providing the facility of credit. This is helpful in emergencies such as during this pandemic, a retailer or a business owner’s monetary fund starts depleting, the line of the credit facility will help them pay off their debts or pending salaries of the employees or meet other urgent requirements.
Some of the banks and lenders have cut down the rate of interest on both secured and unsecured lines of credit. This could prevent the sale of assets in panic, as it is easier to procure a higher amount of credit that too on the lower interest rate by providing collateral, which is a secured line of credit procurement.
Similarly, in unsecured line of credit even in the absence of a collateral, the advantage of low interest rate is a viable option.