This pandemic has surely led everyone experience the unprecedented and even if your income has not been impacted and your cash flows remain as usual it's high time you take on to a thrifty approach as the future holds high uncertainty and to come through it unscathed you need to take actions right away.
So, here we list down some of the monthly expenses that you can cut down for having enough liquidity to tide over the current crisis.
First herein you need to actually be mindful of your various discretionary and non-discretionary expense heads i.e. where you put u your hard earned money. While non-discretionary expenses such as grocery, utility bills, insurance, school fee, rent, EMIs, necessary travel expenses offer little room for re-evaluation, what you can consider is the discretionary part where you can indulge in when you are back on your feet financially.
1. Negotiate on your rent:
Regardless of whether your current cash-flow situation has changed or not, in such times you can always re-negotiate a deal with your landlord for lowering the rent. And if your finances have been impacted due to considerable salary cut or you going through the no pay-check scenario, the suggested review makes more sense.
Further, if because of the work from home model you are not using the rented premise you should also consider re-negotiation as the landlord may cut your rent possibly. Also, if your rent is due for a revision herein do not accept the customary hike of 10% given the current turmoil.
2. Steer clear of unnecessary subscriptions:
For the time being you can curtail on all your life-style relate expenses such as gym, club membership charges. Also, to kill time during the lockdown period, when you precisely are left with more time after usual day's office and household work, do not yield in to new subscriptions such as Netflix and the like for entertainment purpose. You surely can look for various platforms that offer content for free.
3. Motor vehicle insurance can be re-worked based on need:
The adage that every disaster with it brings an opportunity goes right here as well as the need today can be seen as the opportunity to reassess your current financial liabilities, assets, income and expenses. And going by it, here if your situation allows you can shift to the new vehicle insurance policies in market that offer vehicle insurance based on the distance travelled. And if you are travelling less nowadays due to the lockdown or restricted movement or probably as a safe measure, it can save you amply in the long run too.
4. Get your interest rate lowered or Refinance existing loans:
It may be highly possible that you might be servicing one or the other big-ticket loan say a home loan and if you amid the pandemic have been among the misfortunate lot to lose your job, your financial position is in a topsy-turvy situation. Now, there is opportunity here too for you to consider balance transfer on your home loan liability with a lender that might be charging a lower interest rate (due to the benchmark).
Earlier available home loans are not the best in the market as they were pegged to benchmarks such as base rate and MCLR or marginal cost of fund based lending rate.
But now for better transmission of key policy rate, retail loans have been linked to external benchmark rate which is usually the repo rate. Repo rate is the rate at which RBI lends money to commercial banks.
Also, those with high interest loans can look for refinancing options at a lower rate. There are top-up home loans that are available at better competitive rates. Plus the current crisis has led various PSBs to come up with cheaper personal loans.
Similarly negotiation can be also made for credit card interest rate as in the long run this could mean saving a good amount.
5. Elsewhere for cutting down other cost you can look at changing service providers:
Also for better cheaper alternative for different service such as say for instance Wifi services you can opt for the provider that has come up with introductory rates and hence here you can save immensely. Another way is you can re-negotiate a deal with your current provider if you happen to have another good deal in your hind, mind it you can raise such points that you are a loyal customer as it raises the prospects of you being serviced better.
Also, cut down on your internet and other ad-hoc online expenses which you can cut down by may be removing all the debit or credit card details that you might have saved with your from the online accounts where you happen to visit the most.
So, at best in these crisis times, you need to have in place a budget possibly for all of the probable scenarios that might confront you.