The present coronavirus pandemic has brought with it both pay cuts and job loss across several sectors. Furthermore, the COVID-19 crisis is also accompanied by an economic crash, with the equity market being the most badly hit. In these difficult times, when either job loss, pay cut or a dip in the prices of your investments may be affecting your finances, recalculating your personal cash flows is of utmost importance. This may be even more important if you are a business owner yourself and have taken the brunt of the pandemic, both at home and work. Here’s what you need to know to undertake this process efficiently:

1. Calculate your expenses for the following year:
   The first thing you need to do is note down all expenses that you will surely incur over the following year. By looking forward and understanding all expenses to expect, you will have an idea of how much money you will actually need to keep you moving from month to month. Once you have an idea of all your expenses try to identify which ones you can minimise;you can let go of multiple discretionary expenses, memberships to social clubs that may not be important at this stage, and so on. Other cash outflows like health and life insurance premiums, EMIs towards loans you may have taken, children’s school fees, etc. are not really negotiable so you will have to figure out how to keep them going. However, if you have taken loans from friends, family or other personal contacts, see if they can give you some leeway if they don’t need the money urgently.

2. Rethink any substantial expenses you had planned:
   Owing to the impact on your salary, whether it is a pay cut or the loss of your job, or setbacks you face in business, you should reconsider making large expenditures. If you were planning any big expenses like buying a house or renovating your current home, keep them aside for the future when things get more stable. If you had any vacations planned try to defer them as well. In the event that you have already made payments towards your plans, find out how they can be reimbursed. Holding back on substantial expenses for now will free up cash flow and help you get through this difficult period.

3. Don’t let your investments and cash flow remain static:
   Keeping your cash flow and investments  going is essential to helping you keep afloat in the present and ensuring that your goals are not affected. Just because you are facing some setbacks now,don’t resort to panic/impulsive selling of your investments to meet your needs, this may not be wise for you in the long run, when the equity market start doing better.. So with that in mind, try to keep your long term investments in place by cutting back on unnecessary outflows and using the cash flow you may generate from deferring your big expenses. Don’t resort to selling your investments or other assets unless the need is dire.

Another important factor is to consult a financial advisor before making any critical decision about your finances. In today’s world, working with a professional has become extremely affordable. Furthermore, during uncertain times, their guidance can help you ensure that you don’t make any costly mistakes which can affect the state of your finances badly and deter you from achieving your goals. So keep these points in mind and start recalculating your personal cash flow to get through this difficult period without stressing too much. Your situation will get better before you know it!