Considering India’s current economic scenario, it is difficult to ascertain if the coming days would get any better for a middle class Indian individual. In these unpredictable economic circumstances, it is wise to be prepared for the worst. And what could be the worst? A recession! A recession can be beyond your control but if you plan for it meticulously now, you may at least be able to deal with it when the adversity strikes. So here are our top 4 suggestions to make your financial planning recession proof.
1. Don’t just plan a budget, follow it
Planning a budget is like sowing seeds but sticking to it is like watering your plant regularly. You forget watering it and it dies. Suze Orman once said, “No one’s ever achieved financial fitness with a January resolution that’s abandoned by February.” A financial plan that is followed religiously is sure to provide greater returns in a longer run. This will in turn reduce the effects of an ongoing national economic breakdown on you.
2. Cut off unnecessary expenses
Unnecessary expenses are like the smaller holes in your pocket that only enlarge with time and you wouldn’t even take a notice of that. List down these expenses and strike them off your everyday life. The pizza that you eat every other weekend, the coffee mugs that you gulp down every hour sitting in the office, those stakes of cigars and so many other things that are not just unnecessary but are also hazardous to your health. We are not suggesting that you go cold turkey and stop all of it at once, but start reducing them gradually to see the difference not only on your health but also on your budget in the longer run.
3. Have an insurance policy as your financial back up
In order to avoid breaking into savings, have insurance policies as your back-up for financial emergencies. Secure your family with a health plan to deal with unexpected hospitalization expenses. Consider a critical illness plan that could act as an income replacement when diagnosed with a life-threatening disease. Similarly, you can also opt for a retirement plan to take care of the expenses when your regular income ceases.
4. United you succeed
Involve your family members in the planning and decision-making processes concerning the family’s finances. This will make things more transparent and encourage their participation and support. In the longer run, you will achieve the desired results.
Above are the foremost steps that you need to take to achieve the expected returns, and thereby making your financial planning recession proof. Do you think we missed on an important point? Let us know in the comment section below.