These are probably one of the most challenging times we will witness during our lifetime. Pandemics are not a common phenomenon: this is only the 8^th one in the history of mankind. We are lucky that this is the digital age because the internet is why we’ve been able to exchange and disseminate critical information and precautionary measures so quickly and so widespread. And yet, we have two completely polarizing groups: one that thinks this is the end of the world and one that is completely down-playing it. The middle ground is where you would want to be – take enough precautions and yet be calm in the face of adversity! (or calmly panic as I’d like to put it!)

We are looking at a health crisis that has spiralled into an economic crisis (Yes! You read right! It’s already happening). There are millions of people just in India who depend on their monthly or daily incomes for survival. Everybody is concerned about their incomes, healthcare expenses, loan repayments, and livelihood in the months to come.

There are also millions of businesses that cannot operate from home. The aviation industry, travel & tourism, manufacturing setups, sports & entertainment industry, salons, etc. are already on their knees.

If you are a business owner, irrespective of the nature of your business, it will be affected right now. However, you can avoid getting “personally” affected and take care of your family as well.

Here are some facts:

1. The number of coronavirus infected patients reached 1 lakh on 2nd March, 3 months after it began. And then the number more than doubled in 15 days.
2. The Indian stock markets have hit a 3-year low.
3. Only 35-40% of Indians have health insurance.
4. 20% of the infected will require hospital care, which is beyond any country’s healthcare capacity to support these numbers.

So, without further ado, here are 3 things you should be doing to manage your finances:

1. Put aside liquidity for the next 6-12 months

It may sound like too much to ask for. But this is how you take care of the uncertainty that is unfolding right in front of us. First things first, nobody really knows how long the pandemic is going to last. Scientists have said that a vaccine could take anywhere between a year and 18 months. So the timeline of finding a vaccine, putting it into mass production and making it available everywhere in the world could take a reasonable period of time.

Normalcy won’t be restored the moment a vaccine is discovered, it’ll be restored when we have ceased the spread of the virus completely!

Currently, you would either be working from home or be on your way to doing so. However, numerous businesses have had to temporarily shut down operations. More than the owners, the employees have to face the consequences of this. In a lot of cases, employees are being given unpaid leaves. If that is you, you should think about keeping cash for your monthly survival.

Here’s you calculate this: Only calculate the amount for necessities to live – Food, utilities and shelter for a month. Example:

Rent/EMI	₹15,000
Groceries	₹5,000
Telephone	₹500
Internet	₹1,000
Electricity	₹ 1,500
Total	₹23,000
For 6 months	₹1,38,000

Put aside funds for this sum as it will take care of you for the foreseeable future. It’s a healthy practice to have an emergency fund and this point in time does qualify as one.

P.S – If you are cash strapped, you might want to refrain from adding Netflix & other subscriptions in this list.

2. Stray away from the stock market if you are a layman

The stock market is in a freefall, is it the time to pick up the pieces of the ‘big’ companies. They surely would come back to the top right? Maybe. But how long will that take? Nobody can say for sure.

The indices are already tumbling, merely on the news of these things happening. Once the year-end numbers start coming up, realistically speaking, it’s going to slide down further. Now you are likely to hear people saying you should be investing in stocks right now and that this is a golden opportunity. However, if you don’t exercise prudence and make responsible decisions, you might just end up trying to catch a falling knife!

The economy is taking a serious hit. India was already in an economic slowdown, and the pandemic is only making the situation worse. It would be prudent to avoid making any financial decisions without the calculated advice of your financial advisor. However, if you need funds to make up for your emergency fund, you may need to withdraw funds from the stock market.

Strongly advise to not pay heed to generic advice that keeps popping up on banking and news apps and to speak to your financial advisor (or find one!).

3. Mediclaim your way to protect yourself and your family from Coronavirus

You’d think that the leading reason for people going bankrupt would be bad financial decisions which then culminates into default in loan repayments or the selling of crucial assets to do so. The leading reason happens to be medical expenses after lengthy hospitalisations.

The expenses of dealing with hospitalization are so high that it renders people bankrupt! The way out of this scenario is to get Mediclaim. Many employees get covered by the companies they work for – this is typical of corporates.

If you work in an unorganised sector in India, it is very likely that your employer has not covered you. You need to look out for yourself and your family’s medical expenses if the need arises. In such a scenario, if you have availed of Mediclaim independently, you are likely to get a lot of relief from out-of-pocket medical expenses.

And that’s it, folks! These are three tips for managing your personal finances in our current times of crisis. Stay safe, wash your hands and #socialdistancing. Reach out to us if you need any advisory.

There are numerous people who absolutely hate their jobs but just cannot leave them. They have dreadful bosses but wonderful colleagues or wonderful bosses but dreadful colleagues.

The worst; they don’t like the work they are doing; day in – day out. They will not leave either because they are stuck in golden handcuffs (Splendid salary & perks) or because they really don’t know what their passion really is! They may know their strengths but cannot back it up with courage.

There is another unique reason only us Indians can boast about. We are doing the job for which we slogged for years in college and post grad. It wasn’t by choice. It was our “parents’ dream”!

“Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid”

I love this quote. Some say it was quoted by Albert Einstein. Nevertheless, it’s an amazing quote to talk about. To back up this quote, I found an amazing story to tag along as well. Here it goes:

One upon a time the animals had a school. The curriculum consisted of running, climbing, flying and swimming, and all the animals took all the subjects.

The Duck was good in swimming—better than his instructor—and he made passing grades in flying, but he was practically hopeless in running. Because he was low in this subject, he was made to stay after school and drop his swimming class in order to practice running. He kept this up until he was only average in swimming, but the average was passing so nobody worried about that except the duck.

The Eagle was considered a problem pupil and was disciplined severely. He beat all others to the top of the tree in the climbing class, but he always used his own way of getting there.

The Rabbit started at the top of the class in running, but he had a nervous breakdown and had to drop out of school on account of so much make-up work in swimming.

The Squirrel led the climbing class, but his flying teacher made him start his flying from the ground up instead of from the top down, and he developed overexertion at the take-off and began getting C’s in climbing and D’s in running.

None of the animals were happy!

Do what makes you happy. Back your strengths. If you like numbers, take up a job involving that. If you love talking, how about teaching or counselling? Or even sales? Our educational system is traditionally designed to groom us into ‘employees’. I know a guy who barely passed 10^th STD but has his own tours & travels agency because he loves travelling. He is on the verge of starting his own hotel too! It’s better to invent a job than finding one.

“LOOK FOR THE JOB THAT YOU WOULD TAKE IF YOU DIDN’T NEED A JOB.” Doing otherwise, or what he calls “sleepwalking through life,” is “like saving up sex for your old age. It’s not a good idea!”

That last comment makes the audience laugh. But, jokes aside, he says, “You really want to be doing what you love doing.” And if you don’t connect strongly to your first job or two, “don’t give up before you find it.”

– Warren Buffett, chairman and CEO of Berkshire Hathaway 

Cheers!

“A disorganized workspace means disorganized work habits. A sloppy work environment equals sloppy results.” – Larry Winget

If you are a newly started entrepreneur who is starting from scratch using your own capital, you must have already wracked your brains about where you should be working from. Working from home can be tricky. Getting your own office can be expensive. Co-working spaces are trending at the moment. Cafes are exciting!

What’s it gonna be? So let’s get right to it.

How about renting an office space?

An absolute NO! If you are starting out, there is no worse way to drain your capital than by renting an office. It’s not just the rent that’s an expense, you have to account for maintenance, electricity, office supplies, stationery, some furniture, printer, paper etc.

It would be a good idea to rent an office space once you have some fixed average monthly inflow, a couple of employees and your line of work requires you to have an office. However, as long as you are working by yourself, with not enough clientele and your savings to live on; an office space will do you no good.

The trending Co-working spaces

A co-working space makes economic sense for professionals or entrepreneurs working alone; because the cost is per desk or workstation. There is a huge upside of networking at co-working spaces. That aspect is very much location specific. There is no harm in trying out these office arrangements. The factors to be considered are commute time, benefits of networking for your product/service and the cost.

Work from home

If you’ve ever been in a job before, you’ll find the idea of work from home amazing. The idea of doing the boring stuff from your comfort place while listening to music and munching snacks; that was the dream! As an entrepreneur, the work dynamics completely change. You are working with much more dedication, you are on the phone all the time and you are meeting a lot of people. Saying “Home” may not sound like the best answer when a prospective client asks “Where is your office located?”. Also, the environment at home is so warming it can actually hamper your productivity.

Although it’s not impossible to work from home, most successful businesses do start out that way but evolve into a proper office space ASAP.

Other makeshift alternatives

Cafe. There is a new cafe propping up every day in Mumbai. If you are brainstorming with your partners or simply ideating by yourself – cafes are beautiful places. With the kind of ambience modern day cafes offer, ideas just flow well. However, going to a cafe is an Rs. 800-Rs. 1000 for a day affair. It really is a once in a while treat for yourself. I personally like Starbucks for working by myself or even hosting meetings.

Sports Club. This is where I got creative. When I had just started out, I had no budget for even sitting in a cafe and working from home was not fruitful – I decided to work in the reading area of the Sports Club where I go for swimming. It was deserted. That was the best thing I did to save money, work efficiently, make a dozen sales calls each day with all the privacy I want and then go for a swim at the end of the day!

The Ideal Workspace

For a new entrepreneur, the ideal workspace would be to rent out a conference room or a cabin at the office of a friend or a relative or an associate. If you don’t know someone like this, you have started off on the wrong foot as an entrepreneur. Most people who have conference rooms use them once or twice a week. It is well-furnished and has all the amenities. This workspace alternative only has benefits. You get enough space. You pay a nominal rent (assuming you have a stellar rapport with the friend/relative). You can host meetings there. Everything is taken care of – Stationery, office supplies, cleaning, furniture, electricity etc. Just go for it!

“Don’t save what is left after spending. Spend what is left after saving” – Warren Buffett

If you are someone who wonders at the end of the month; where did all the money go? You need to start tracking your expenses ASAP!

Why is it even important to track your spendings? 

It helps you become aware of your own spending habits. Today, with so many transactions happening digitally, we swipe our credit cards or shop digitally or use e-wallets in a snap. It has been proven that if you spend money using hard cash, you may end up not spending as much as you would digitally. The actual feeling of parting with your money physically makes you think twice!

This is how tracking my expenses made me rich! (Not literally)

Tracking helps you identify exactly where you are overspending.

A few years ago, I noticed my biggest expenditure every month after travelling (which was something I couldn’t cut down upon) was spending on outside food, especially weekend outings with friends. If you live in Mumbai, you’d know what I’m talking about. The purpose of those outings was to catch up with friends and unwind a bit. That could be done at a much lower cost and different venues too. Without compromising my outings, I still managed to save an easy Rs. 4,000 monthly i.e. Rs. 48,000 annually. This extra saving in my hand invested at 15% compounding annually stands at Rs. 1,43,762 in just three years! Isn’t that amazing?

The “How to” Guide

Step 1: Get an Expense Manager App for tracking your cash expenses

Step 2: After you have made an expense, immediately record it in the app or at the end of the day.

Step 3: Don’t use e-wallets as the multiple transactions don’t get reflected on your bank statement. Spend digitally directly using your debit card or credit card.

Step 4: At the end of the month, export your expense report from your App along with your bank statements.

Step 5: Analyse your spending pattern. Cut down wherever you can. Exercise discipline in areas you are overspending.

Step 6: Invest the saved money every month in an investment vehicle giving at least 12% return per annum.

Step 7: Get rich!

“Every minute you spend in planning saves 10 minutes in execution; this gives you a 1,000 percent Return on Energy!” – Brian Tracy

Weekly planning is one step towards a more productive week. It is the only tool to beat procrastination and inertia. While you are starting a new week, spend one hour for planning your tasks ahead. To plan your activities, it’s important to WRITE actions down; not simply think about it. What gets written has the higher chance of getting done! So what actions will you take this week?

Although planning has many layers, here’s a simple questionnaire to get you started. Answer these questions and you’ll have a huge list of actions for the week.

1. Whom do I need to call?
2. Whom do I need to meet?
3. What tasks do I need to finish pending from last week?
4. What bills do I need to pay?
5. Who do I have to collect money from? Whom do I owe money?
6. Household errands to be done? (Repairs, purchases etc)
7. What one thing can I do this week that I have been putting off for a long time?
8. What tasks need to be done by this week? (Priority work)
9. What actions will I take to reach my long-term goals? (Buying a house, travelling the world, saving money etc)

Once you have your list of actions, all you need to do is

• prioritize
• learn to say “no” to people if they ask you to do anything that’s not on your list
• focus only on the tasks at hand (unless something very very very important comes along!)
• schedule the tasks (day & time)
• repeat this process next week and the week after that and forever!