How to save money if your salary is reduced during the Coronavirus crisis

• India is currently under a 21-day nationwide lockdown due to the Coronavirus pandemic.
• Several companies have announced pay cuts for their employees to reduce losses.
• Here are some tips that will help you save money during the pandemic.

Coronavirus has been spreading rapidly in India and to contain it, India has been under a nationwide lockdown. Apart from essential services, all businesses have been asked to shut down during the lockdown period.

While some companies have been able to cope up with the lockdown by asking employees to work from home, not all companies can do this. This has resulted in several companies announcing pay cuts for the lockdown period due to the mounting losses.

There are people who have even received 50% pay cuts and if this happens with you, your entire budget will get disrupted. If your salary has been reduced, it is important to manage your expenses and save money so that you are able to survive during the Coronavirus pandemic.

How to save money during the Coronavirus pandemic

Make a list of your expenses

The first thing that you need to do is review all your expenses based on the spending in the last few months. Then, make a list of these expenses and classify them based on their importance. Rent, groceries and utility bills like water and electricity should get the highest priority.

Review non-essential expenses

Once you have classified the expenses, you can then review the non-essential expenses and eliminate these expenses as much as you can. This will help you bring down your expenses. Some such expenses on top of middle class families are laundry, cooks, ordering and eating out, new clothes, cinemas and other such.

Save money on groceries and food

Avoid panic buying and spending too much on groceries. Make a list of essential groceries that you might need for the next 1 or 2 weeks and purchase them. Avoid ordering food online and cook your own meals at home.

Review your streaming service subscriptions

While you may want to catch up on shows and movies during the lockdown period, it might be a good idea to review all the streaming services that you have subscribed to and cancel those services that you have to renew in the coming days. They might look like small amounts individually but ideally streaming expenses should not exceed Rs 600 per month.

Use your emergency fund

If you have an emergency fund, now might be the time to use it. Dipping into the emergency fund will allow you to meet your monthly expenses till everything goes back to normal. But it goes without saying that you need to be judicious with your spend.

Look for alternate sources of income

If you have received a pay cut, look for alternate sources of income from part time jobs or online gigs. Use the lockdown period to learn a new skill that might help you get a new job to make more money. A lot of people have been turning to online courses to gain skills that might improve your job and earning prospects.

Apply for the moratorium announced by banks

If it is not feasible to pay EMI and meet your monthly expenses after receiving a pay cut, you can opt for the three-month moratorium announced by the Reserve Bank of India. Do not forget that this is only a deferment and you will have to pay the EMI with interest after the moratorium ends.

This is also applicable to credit card bills so do it only if you are unable to make ends meet. It is likely that this financial crisis would last a long time as multiple countries go into recession, so ensure that you cut out non-essentials from your budget and live a modest life until things get back to normal.

See also:

No EMI payments for home, car, and corporate and other loans for 3 months says RBI
The CEO of a mutual fund explains how to divide your savings in the post-Coronavirus era
OYO reportedly invokes ‘Act of God’ clause to suspend payments to hotel owners says report