If there’s one thing the novel coronavirus pandemic has made us realise, it’s the importance of emergency funds. Several people, unfortunately, were laid off during the pandemic, making it difficult for them to take care of even everyday expenses after a while. Many contracted the virus and were faced with huge bills. Keeping these factors in mind, it would only be prudent to start planning an emergency fund right away. It’s not going to be that easy, especially after pay cuts and growing medical expenses that some have had to deal with. But not doing anything is certainly not the answer to the crisis.
So, let’s see how we can build an emergency fund in the middle of a pandemic:
1) Save Each Extra Rupee
The pandemic shut down offices and, therefore, most of us are working from home. That saves the money we were spending earlier on commuting to our workplaces. Transferring the entire money to the emergency fund is not that bad a decision if you think about it.
2) Bonuses, Commissions, Interests
Let’s say you performed brilliantly last month and are eligible to receive incentives with your salary. Or some of us receive interest on our savings account balance every quarter. Is there an income tax refund lined up in the next month or two? Transfer them all to your emergency fund since your regular salary is enough to take care of your everyday expenses.
3) Identify Areas You Can Cut Expenses
A vast majority of us isn’t venturing out for shopping, cinema, and weekly dinners, for the threat of the virus, still looms large. And therefore, if you are one of those with steady sources of income, save everything that you might have otherwise spent on the luxuries mentioned above and contribute to your emergency fund.
4) Cut Down A Portion Of Regular Savings
Here’s another important method to consolidate your emergency fund. Do you transfer a fixed amount from your salary to your savings account? Depending on the circumstances, of course, you can cut a portion of that amount — at least till the pandemic lasts — and transfer it to your emergency fund.
5) Cancel The Subscriptions You Don’t Need
Are you a fitness enthusiast but have been working out at home because the gyms are shut and you don’t want to risk anything? Why not, then, cancel the subscription for the time being? Save that money and you can always join the gym when things normalise. Yes, you are home and have been hooked to Netflix and other video-streaming platforms, but are you hooked to a few of such apps more than others? So, prioritise. Keep the ones you binge-watch, cancel the ones, at least for now, those you don’t find time for.
6) Find Out Alternative Sources Of Income
This is also an option as long as you have some extra time on you. Is there a way to pick a freelance assignment or a gig that would get you some extra money? Well, if there’s one and you are comfortable putting in a few extra hours, pick it and save the money.