10 Easy Ways to Manage Money During Lockdown

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Albert Einstein had said that "In the middle of difficulty, lies opportunity". Most of the country is facing the difficulty of an enforced lockdown due to Covid-19. However, this also gives us the opportunity to determine ways to manage our finances better, which could be useful even after the end of this pandemic.

 Here are 10 easy ways:

 1)  A great model for your monthly budget is the 50/30/20 rule. 50% of your salary should go toward things that you need (E.g. Food, rent, education, EMIs etc.), 30% on things that you want (E.g. Restaurants, movies, non-food shopping, travel etc.) and 20% allocated to safe investments like debt/equity mutual funds that can be used as a corpus to be used for large expenses (E.g. Health issues, College fees, Weddings etc.). The curfew has greatly limited our ability to go out of the house to spend money on we want. This extended homestay will help you analyze what you really NEED vs what you WANT. 

2)  Have fun with your family in the kitchen learning to cook exotic new recipes. You will be less dependent on getting cooked meals delivered from restaurants, which will lead to savings. Post the lockdown, make cooking with the family a weekly Sunday activity. Some of the food can even be frozen to be consumed later in the week, when you are looking for something besides the usual "daal, subzi and roti."

3)  Going out for a movie for a family of four gets quite expensive if you include the cost of multiplex tickets & overpriced theatre snacks. Many new movies are now being shown in OTT platforms; like Netflix, Amazon Prime & Hotstar; soon after their theatre release. Get the family to watch these films together with a bowl of homemade popcorn and other snacks. Post lockdown, you can even invite your friends for a fun evening of movie watching. 

4)  Analyze the monthly/annual memberships you have for Gyms and social clubs (E.g. Lions, Rotary, Kitty parties etc.). See how often you actually go to them. If your attendance is less than 30% in a year, consider giving these memberships up. Also, have a look at the paid software you have on your laptop & phone. If you have not used them for more than 6 months, consider downgrading to the free versions or using the many other free alternatives available online. 

5)  If you own more than one car, consider selling the other one. You will be able to travel more conveniently in Ola/Uber in most cities. If you want to drive the car yourself, you can use a self-drive car rental service like Zoomcar to get around. Imagine how much you will save in car EMIs, maintenance, petrol and parking charges through this. 

6)  Use the time at home to clear out all the stuff you haven't used in the last year. Please do not hoard things in the hope that you will use them "someday". Sell these second-hand goods on platforms like Olx or Quikr. Better still, consider donating them to a local NGO. 

7)  Develop a frugal mindset in all thing and identify ways you can save money. Identify the credit cards/online payment services that give you the best cash backs or rewards and use them as a priority. Purchase non-branded clothes & accessories, which tend to be of similar quality to the expensive brands. Aside from a haircut, most beauty parlor regimes can be done by yourself at home. Raise your home air conditioner temperature to at least 24 degrees Celsius, your body will adapt to the moderate temperature. Change all lightbulbs to cost saving LED or CFL ones. Take all electronics like TVs, A/Cs, Laptops etc. out of standby mode, as this could raise your monthly electrical bills. Keep looking for more of these minor ways to save money. All the little savings will add up to a lot. 

8)  Aside from cost savings, there are many ways you can increase your monthly income by starting an online business or doing online jobs in the evenings or weekends outside your 9-5 office hours. There are many websites like Upwork & Fiverr that let you bid for projects right from content writing to larger consulting projects. There are many sites that let you provide online tutoring and give other online job opportunities. All of these don't require any investment except your time. 

9)  Warren Buffet said that the best time to buy is when everyone is selling. The equity markets will be very volatile for the coming year. However, due to the overall environment of fear, most people are selling their stocks and valuations are at all time lows. If you have a pool of capital that you do not need for living expenses, you may want to purchase stocks of good quality firms periodically as the market dips. This could give you overwhelming returns on your capital over the long term. 

10) Have some regard for the less fortunate who are not able to weather the storm as easily as you can. Try to purchase supplies from small shops and hawkers as they need your money more than the large grocery outlets. Also, do not haggle too much as each extra rupee will count. Donate money or time to NGOs who are providing relief efforts for those greatly affected by the Covid-19 lockdown, like the homeless or stray animals.

Remember, this tough period will go away at some point. Make the best of this short time to come out financially stronger and give you benefits that will last a lifetime! 

(By Dr. Akhil Shahani, Managing Director, Shahani Group)