The coronavirus pandemic has brought a lot of attention to emergency planning. As soon as the lockdowns were announced, emotions were running high, and people all over the world started stocking groceries and medicines to get ready for an emergency situation. But for most people, financial planning in this emergency was more of an afterthought.
So, let’s get this cracking. Are you financially prepared for emergencies? Here are some questions that will help realize your preparedness.
Do You Have Emergency Savings?
Financial experts recommend having 8 to 12 months of living expenses in case of a pandemic like this. And these savings should be accessible whenever the need arises. If you do not have emergency savings, your best bet could be applying for a personal line of credit, which is cash, ready to be used when in need.
Do you have Enough Physical Cash?
A lot of people do not keep physical cash because ATMs are easily accessible, located at every corner of the street. But you never know when emergency strikes, and you may need money to purchase something right away. ATMs may not have the money, or they may be closed, banks could be closed, and in such a situation, cash is king. So, consider keeping at least a few thousands in physical cash at home.
Do You Have Adequate Health Insurance?
It’s always wise to be prepared, should a medical emergency decides to crop up at a time like this. Your savings may not be enough to cover medical expenses. So instead of scampering around for financial help, get adequate health insurance.
Do You Have Access to Your PF Accounts?
Due to the current COVID-19 pandemic, the government has relaxed the norms around the Provident Fund (PF) accounts. If you want money, you can claim your PF in advance. However, to make a claim, you need to have access to your profile. So, make sure that your UAN and EPF are functional. If not, visit the EPFO website and get your account up and running.
Are You Aware of Loan Moratorium Facility?
Recently, the RBI instructed the banks to offer a 3-month moratorium to borrowers on repayment of all term loans. Following the announcement, some banks chose to provide the moratorium to their customers by intimating them on how they can opt-in for the moratorium. The moratorium was for payment of all installments falling due between March 1, 2020, and May 31, 2020.
Although the moratorium benefit is available, if you can afford to pay the loan EMIs, you should continue paying them. You may get to defer the payments, but there is no running away from the interest – it will continue to accrue on the outstanding portion of the term loans during the moratorium.
How Good is Your Credit Score?
If you need a personal loan, at a time like this, it is best to know your loan approval chances before you apply. Therefore, check your credit score first. Pull up your credit reports and use this time to carefully go through the information in the report. Check if there are any errors or inaccurate information registered in the report. Also, find tips to improve your credit score.
After going through the above financial checks, you may have realized whether you are emergency ready or not. If you are ready, you are on top of things and can plan your finances better. If you are not ready, you have a lot of ground to cover. Use this time to buck up and get your emergency finances on track.
Also, Read This: Key Points To Remember While Applying For A Personal Loan