How to plan your personal finance for pandemics like corona virus?

25,000+ people dead, over 600,000 infected and global economic under incomparable stress. One invisible microorganism has rendered the entire world restless. People are leaving their jobs to run back home, colleges are shut, courts are closed and even temples are under lockdown.

Everything you thought was important like movies, office, entertainment, trips and extravaganza are no more important, the only thing important right now is Survival. Governments from around the world are announcing lockdown to save people and not the economy. While millions of daily wage earners and middle class individuals are on road thinking about the next meal, riches are at home enjoying the self-quarantine moment with their loved ones.

Are these millionaires not worried about the loss due to lock down? Are these billionaires promising 1000 Crores to government relief fund not worried about their tomorrow? Well, right now, they are not because they planned for this day. An average millionaire has over Seven Income Sources while a middle class is more worried about the weekend party that is what makes all the difference.

Let’s hope we all come out of this pandemic ALIVE, but if we do, let’s pledge to plan for days like these. Here’s a well-illustrated roadmap for everyone who wants to have peace of mind even when pandemic like COVID-19 strikes:

Emergency Funds: Over 2 crores directly and indirectly employed people in India are expected to out of job for next six months. The global pandemic has rendered powerful countries like US, UK, Europe and China helpless and their economy is in tatters. India is heavily dependent upon US, UK and China for jobs. Almost 90% of all outsourced jobs in India originates in the United States and it is expected to suffer.

Emergency Fund is generally defined as the 6 times of the minimum amount required to lead a stress free life. Since 6 months is a good time for the impact of pandemic, economic upheaval and disasters to subside, having funds for six months is considered to be a good emergency fund.

Here’s an example: If you are earning 50,000 INR per month and it takes you 25,000 to lead a stress free life then your emergency fund should be equal to 6 X 25,000= 3, 00,000 INR.

Adequate Life Insurance: In countries like India, where people buy life insurance from uncle and aunties, there’s hardly an earning individual who is not insured. While almost every earning individual has an insurance but only a handful of them have adequate life insurance.

Adequate life insurance is the an impressive sum assured that can keep your family afloat for years in your absence. Consider this, if you are 30 years old, married and father of one children. If a pandemic like Corona Virus kills you, your wife and son is left with no one to take care. It will take your son at least 20 years from now to grow up and start earning, while your wife will have to work harder than you did to send your kid to college for good education.

If you had an adequate life insurance cover, you will leave behind a huge amount for your wife and son. A good amount will allow your wife to take up a job that brings in a monthly income without worrying about the education fund of your kid.

Medical Insurance: World Health Organization’s data shows that 95% of Corona Infected can be cured. Even when retrieval chances are as high as 95% over 10,000 people have died in Italy alone. A medical insurance will ensure that lack of money is not the reason you die.

With a proper medical insurance from a reputed and reliable company can help you fight all pandemics and deadly diseases like a warrior. An adequate medical insurance puts no strain on your family’s earning and savings.

Final Thoughts

Pandemics like Corona occur very often, earlier it was Ebola, then H1N1 and now Corona. We don’t know, the next pandemic will come from which country and how it will impact us but we do know how we can plan for it.

Get in touch with a personal finance manager today and get your pandemic plan in place.

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