The current situation created by the spread of the novel coronavirus, COVID-19, and the lockdown that soon followed has definitely changed the way we have to think about spending our money. The economic crash that ensued has only made the need to take action more imminent. But trying to figure out what to do with your money might be hard, especially for new investors; and even more so because of all the uncertainty. So in that case, we decided to put together some points to help you figure out the best way to utilise your funds during this time –

• Grow your emergency fund:
  The COVID-19 crisis is a perfect example of a contingency that could not be planned for. In general, a contingency is an event that occurs outside of the normal scheme of things. It is in times like these that keeping aside an emergency fund can be your saving grace. While it is usually recommended that you maintain an emergency fund of about 3-6 times your monthly expenses, now may be a time when you should consider increasing this amount. This is because both job losses and pay cuts are happening across different sectors, owing to the current state of affairs. So the best thing you can do now is prepare for such a contingency, in case this should happen to you.
• Ensure that you have optimal insurance cover:
  Given that the reason for the situation at hand is caused by a virus which can lead to adverse health outcomes, it is particularly important that you make sure that you have adequate insurance coverage. If you and your family don’t have coverage, now is the time to purchase a health insurance policy; if you do, go over its clauses and ensure that everything is in order. Furthermore, it is also necessary to purchase a life insurance policy; if you already have, ensure that the payout is sufficient, and make changes if necessary. Purchasing life insurance is all the more important in families with a sole breadwinner.
• Make contributions for the long term:
  Many investors tend to indulge in panic buying and selling during a market crash in an attempt to mitigate their losses. However, this may cause you to incur significant losses when the market starts to do better. So in the short term, the best thing for you to do is to remain patient and  maintain your existing holdings after consulting with your advisor. But, if you should have an excess of funds and want to think about how you can invest them to take advantage of the crash, you should plan for the long term. Here, the most efficient option is to invest through a Systematic Investment Plan (SIP) by deploying a lump sum amount in 4 to 6 tranches. You should consider contributing towards index funds, since they are known to be extremely low-risk and hence suitable for both new and seasoned investors.

Keeping this information in mind can help you make the most out of the present scenario. Another important point to remember is working with an experienced and certified financial planner or wealth management firm. They will have the expertise to guide you through these complex and uncertain times, and ensure that your funds are used in the most effective way possible.