War affects the economy majorly of countries directly involved in war and repercussions to other countries whose trade are linked to the countries involved in the war.
Natural calamities like earthquakes, Tsunami, floods, drought affect a particular region of the country. But this Pandemic has affected the world and almost all the economies in the world are in a tough situation. The economic recession is generally marked with:
In this post, I’m going to discuss some practical and very effective methods that will not only help you in surviving tough times but will also make you financially sound in the long run. Let’s start the journey: 1) Start an Emergency Fund
If the finances are hand to the mouth where whatever is earned is ends up as an expense and you foresee that the situation is going to get worse in the coming 6 months.
It is an emergency that needs immediate attention.I follow the rule of thumb that the things which are not used in the last 1 year, the chances of their future use are slim or rare. Look for such things/items in or around your house, estimate their present price, and find the right buyer for them. This fund will provide you some cushion in case the financial condition deteriorates and will act as an emergency fund. Let us assume you got Rs. 3,000 after selling items not in use in the last 1 year. Don’t invest the whole amount in one go in the economic downturn or the pandemic situation. Invest in phases as it has 2 benefits:
As we are going to invest for 6 months (it is not worthwhile calling it an investment because scientifically investment is something that is made for a period => 1 year) Let us call it a regular deposit for making an emergency fund. Divide it 6, you get Rs. 500 per month to put in RD (Recurring deposit: It is a scheme where you deposit an equal amount every month to get the final amount with interest at the end of the period)
(RD calculator saved in canva images) Let us say that the annual rate of interest is 5.5%. When you deposit Rs. 500 per month for 6 months at this rate, you get Rs. 3049 in hand at the end of the 6 months. 
Emergency fund Principal - Interest Chart: Your money grows even if you put in small money.
This is the emergency fund that you will be needing at the end of the required period.
2) Create an additional source of Income
It is absolutely fine to keep saving your present job even if it is at the cost of a pay cut. At the same time, you need to find another stream of income that can act as a support system in the economic downturn.
Don’t worry! Let me help you in finding the ways of additional sources of income. These are Digital Products like e-books, online courses, spreadsheets, etc. You can see, listen, and understand but cannot taste, smell, or touch them. These products are equally effective in providing the value as any other physical product in a similar category. Moreover, you can start this business opportunity from home, which requires very less investment (a laptop or a smartphone with an internet connection) and this business is infinitely scalable. The demand and importance of digital products have increased further since the outbreak of the Pandemic Covid-19. In short, All that is needed is your time and willingness to create a good product for your audience. You can write an e-book about any subject that you feel might be helpful and will provide value to your audience. Or You can design an Online course on a similar subject making it more interactive through audio, videos, quizzes, downloadable materials, and presentation slides. After completing your work, set the right price for your digital product, upload it on platforms like Gumroad that offers free service, and start selling to the international audience while sitting on your chair. Creating, designing, and selling digital products can become an additional source of income during uncertain times and can help in securing you financially as they require very less investment, are easy to create and this business is very profitable. 3) Solar Electricity
During uncertain times people generally remain at home for one reason or another.It indirectly means that they are consuming more electricity than they were consuming before and are paying more to the grid.
We need to find a solution that could not only meet our energy needs but also make you financially secure. One such option is Solar Electricity. A solar power system converts sunlight into electricity and runs our electrical appliances. The extra amount that you are paying to the grid every month can be used to get the solar power system on your rooftop. The best thing about it is that the source of electricity (Sunlight) is available free of cost to all of us, the solar panels have a long life of 25 years, and the system after installation requires little maintenance. Once you install it, you needn’t pay a monthly bill thereafter unlike your grid electricity supplier. It means that you’re going to get free and smooth electricity for decades. Moreover, this renewable source of energy is environmentally friendly. In places with good sunshine and where grid electricity cost is high like in metropolitan cities, installing a solar power system is lucrative and the best option to save money on electricity. It will reduce your dependency on the grid electricity, now you’re producing your electricity and will make you financially secure and stable during uncertain times or otherwise. Using a solar cooker for making food under the sun and solar water heating for making hot water during winter’s system will also help you in further reducing your utility bills. 4) Start your garden
If you have free space in your house then starting a garden is another good option to save money on essential commodities.
Take seeds and sow them. Starting a garden is much cheaper than buying from outside. 5) Get back to healthy lifestyle
If we introspect then we’ll find that all of us have some or other kind of bad habits (eating habits or lifestyle habits) and that leads to unnecessary expenses.It’s time to leave those bad habits and shift to a healthy lifestyle.
For example, a person who eats junk food more often is spending more money on food and is more likely to get ill than that a person who is making and eating homemade food. Identify those habits in you and kill them. This activity will not only save you money and make you financially secure but also improve your health. 6) Buy Medical Insurance
Medical treatment is costly anywhere in the world.
And If you don’t have medical insurance then even a few days of hospitalization can take out lakhs from your pocket. Taking a risk of not having medical insurance during uncertain times is like hitting an axe on your feet. If you don’t have insurance then take it now as this will hedge you and your family against any medical emergency and will secure you financially. 7) Buy necessary tools and equipment
Keeping essential tools and equipment like a tester, multi-meter, wires, tapes, sealant, hammer, nails, etc will enable you to do most of the household work like:
Doing it yourself is much cheaper than hiring technicians for the job. This simple yet effective change will save you money and add a cushion to your emergency fund. (* Take necessary precaution when you are doing the above household activities yourself) 8) Portfolio re-allocation
During an economic recession, the stock market is always under pressure and the prices start plummeting.
If most of your funds invested in the equity market then it is time to re-allocate and shift part of it into more secured instruments like bonds offering a fixed return on investment. Or You may shift your funds in defensive stocks like health care and companies providing basic need products, companies offering a fixed dividend. This strategy will hedge your portfolio and will give you a kind of stable income even in times of economic recession. 9) Pay your debt first
Always keep yourself debt-free in uncertain times.
If you have debt then take out ways to pay it first because your creditors are also in need of money and any delay in paying may give chance to them to go to court and issue a legal notice. And Dealing with this situation would be very difficult in the economic downturn. 10) Use public transport or keep a bicycle for nearby locations
Keeping a bicycle to purchase groceries from a nearby location will save you time and money.
Moreover, it keeps you healthy and strong that is very necessary in uncertain times. Make these changes in your lifestyle and in a few months, you’ll see that your financial condition starts improving and you feel more confident and self-reliant ever before.
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