💰 Managing Personal Finances in Tough Times
Life is uncertain. 📈 Rising prices, higher EMIs, job uncertainties, and unexpected medical costs have made financial stability a concern for many families. The good news? With discipline and smart choices, anyone can take control of their money and build resilience.
1️⃣ Create a Realistic Budget
- 📝 List all monthly income sources.
- 📊 Track every expense — from rent and groceries to coffee and subscriptions.
- 🔑 Follow the 50-30-20 rule: 50% essentials, 30% lifestyle, 20% savings & investments.
- 💡 Example: If income is ₹60,000 → Essentials ₹30k, Lifestyle ₹18k, Savings ₹12k.
2️⃣ Build & Protect an Emergency Fund
- 🏦 Keep at least 6 months of expenses in liquid, safe instruments (FDs, savings account, liquid mutual funds).
- 🚨 Use only for emergencies like job loss, hospitalization, or urgent repairs.
- 💡 Case: A family spending ₹40k/month should target ₹2.4 lakh emergency fund.
3️⃣ Cut Unnecessary Expenses
- ❌ Cancel unused subscriptions.
- 🍔 Reduce frequent online food orders.
- 💳 Negotiate loan/credit card rates.
- 🛒 Use cashback apps, bulk buying & discounts.
- 💡 Saving ₹3,000/month = ₹36,000/year extra in your pocket!
4️⃣ Prioritize Debt Management
- ⏫ Pay off high-cost loans first (credit cards).
- 📌 Use Debt Snowball (smallest loan first) or Debt Avalanche (highest interest first).
- ⚠️ Avoid borrowing for luxuries in uncertain times.
- 💡 Example: A 36% credit card loan wipes wealth faster than a 12% mutual fund can grow it.
5️⃣ Continue Investing, But Wisely
- 💼 Don’t stop SIPs unless absolutely necessary.
- 🔄 Rebalance towards safer assets (PPF, debt funds, gold ETFs).
- 🛑 Avoid speculative investments.
- 💡 Staying invested during downturns = higher wealth when markets recover.
6️⃣ Protect Your Family with Insurance
- 🧑👩👧 Life Insurance → Term plan (10–12× annual income).
- 🏥 Health Insurance → Ensure adequate cover for family.
- 🚫 Don’t mix insurance with investments.
- 💡 A ₹1 crore term plan may cost less than a monthly family dinner.
7️⃣ Think Long-Term & Stay Disciplined
- 🔁 Automate savings (SIPs, RDs).
- 📆 Track monthly progress.
- 👨👩👧 Teach kids money lessons early.
- 💡 SIP of ₹5,000/month → Over ₹50 lakhs in 20 years (12% return). That’s the Power of Compounding!
✅ Conclusion
Financial resilience isn’t about earning more — it’s about managing better.
👉 Start today:
– Cut one expense.
– Save ₹500 this week.
– Take one step toward financial freedom.
Money is a tool. Used wisely, it gives peace of mind, security, and confidence, even in uncertain times.
Malav C. Sheth & Co. – Chartered Accountants
www.camalavsheth.com | malav@camalavsheth.com
