India is currently facing huge economic loss due to COVID-19 pandemic. Government of India issued an order to lockdown till further notice and due to that industries, real estate and other economical market are decline day by day gradually. Here we are provide guidance to save money for the next few months.
- Economist assumed to loss of 28 Lakh Crores for the current financial year due to COVID-19 pandemic. Also, they are predicting our GDP will degrade to 0.5 % for the current financial year.
- Stock market: Sudden fall to the year 2008 points. Nifty50 fallen from 12000 to 7500 points suddenly in the month of March 2020. Currently stock market is in good balancing position but it clearly indicates the currently the growth and market movement exactly as a year of 2008-2009.
- Crude oil rates: Major fall in the crude oil shows the importance of the crude in the world economic market. Crude oil price in US are worse than ever and it downs to the negative at some point of time. It clearly affects on the gulf countries for oil refineries and crude oil supply chain.
- Gold rates: Due to world pandemic situation, gold rates are the higher than higher each day due to volatility of crude price and the currency market fluctuations.
The above key factors are directly involved in the financial and economic situation for the world wide countries.
Most impacted sectors
The currently markets in India are huge impact due to the COVID-19 pandemic and will require huge support from the government of India.
- Travel and Leisure
- The travel industry and the leisure industries like Airlines, hotels, resorts and restaurant are closed since few months and people will try to avoid for yet few months. Due to the huge loss the many factors affecting like employee job, economy and revenue of the airports. Also, hotels and other luxury facilities like malls, theaters remain closed so huge impact on the export import duties, goods and service tax collection.
2. Metals and automobiles
- The metals and automobile industry are strongly relied on the customers and real estate industries. The automobile might 2.3 lakhs job loss in the year of 2020 and it is the huge job crisis in 20 years.
Why save money for the next six months?
- The question is obviously correct that why we need to save additional money for the next few months.
- Recession: The obviously it will directly affect on company cost and it might chances to lose many jobs. It takes 8-10 months to get back to normal. For those months to meet the expenditure, need to have emergency fund / savings. This is probability but need to prepare advance for anything going worse than ever.
- Price hike: The increasing in price is the obviously reason to save more money than before. The industries are likely to hike the price of each food item to 4-5 %. HUL already hike the price during the current COVID-19 pandemic situation. Also, the government of India changes the percentage of GST for the consumer items to increase the collection of GST as well.
How to save money for next six months?
- We have identified few points and guidelines that will save you from the any financial crisis for the next 6- 8 months.
- Reduce use of Credit cards and EMI’s.
- The mostly Indian users use credit cards and Equated monthly installments (EMI) option to buy unnecessary or expensive items like electronics, gadgets and many more. We recommend avoiding such unnecessary items for the one year.
- Such credit cards and EMI’s charged 10-12% interest if the fail to pay installment on specific period. Also, it will affect directly on CIBIL score for further loans.
- Home loan installments
- Some Indian customers willing to pay quick home loan installments to prevent huge interest. We recommend you to do not pay additional loan installments during the 6 to 8 months.
- As per the current situation, we are assuming inflation rate increase from 5-6 to 9-10 %. It will directly affect on the cost income.
- Increase emergency fund or fixed deposits
- During the COVID-19 pandemic, fixed deposits are increased by 125% in the financial banks and it is clearly indicates that people are good decision makers and save the money for any worse case scenarios.
- We recommend you to save funds into fixed deposits and savings account, rather than investment into real estate and gold investments. We know that the returns of the savings account and fixed deposits are almost nothing, but it will safe and will help for anytime when needed.
- For savings and fixed deposits, we are recommending investing only in the financial banks (Private and PSU Banks) and avoiding non-financial institutes. In case of any worse situation, liability of investment in financial banks is higher than non-financial institutes.
- Avoid investment in stocks and mutual funds
- This is very strange but we are strongly agreed to not invest any amount in the stock markets and mutual funds.
- Many brokers and operators are targeted customer to invest at low market for the huge profit, but we are predicting that the market will going even worse than current market. We strongly recommend you to invest in safe heaven environment rather than the unpredictable market such as stock markets.
- On month of march 2020 , stock market sudden fall from the 12000 to 7500 points and many investors loss of 30 lakh crores in one week due to price down. We are not advice to invest more in the current stock market.
- For mutual funds, we recommend to continue ongoing SIP’s and not invest in new mutual funds schemes. Some brokers ask for the lumpsum investment but we are strongly recommending you to not invest huge amount in the mutual funds and stock markets.