What are the scenarios we are planning for ourselves? What is Plan B and Plan C, in case Plan A falls through? I suggest that you spend some time and write down (and I do mean write down!) your own scenarios and the potential plans if those scenarios play out.

While there are many aspects to consider, the 2 key things I believe one needs to think about are:

        1. Your job 

        2. Your health

        1. Your job: At the simplest level, there are 3 possible scenarios

                a. Your job stays safe.

                b. You need to take a pay cut.

                c.  You lose your job.

        2. Your health

                a. You stay well.

                b. You are unfortunately infected and have to be hospitalised.

                c.  You become a victim of the virus. 

I apologise if that sounds rather morbid, but it is important that you, as an individual, have thought these through and planned for them.

Some ideas on how you can plan and prepare for the various scenarios:

 Financial actions related to your health outcomes:

    –   If you have financial dependents (children, parents, partner, others), then please get your life insurance policy in order, in case you  don’t have one. The rule of thumb typically is 10X of your annual salary.

    –   Top up your health insurance or get one in case you do not have one.

 Financial actions related to your job outcomes:

    –   Make sure that your Emergency Fund is in place and equivalent to 6-12 months of expenses. This should be invested in Liquid Funds. If you don’t have an Emergency Fund, create one immediately. Review all expenses and start investing as soon as possible.

    –   Postpone that planned holiday, that new car, that new gizmo – basically, any discretionary spend – till the Emergency Fund is fully in   place.

Other suggested actions related to your job:

    –   Do a systematic review of the industry/segment that your company operates in and do your own analysis of the impact of the economic slowdown/lockdown. Is your industry likely to be more or less impacted? There is enough material to help you form a view.

    –   Reach out to your employer to see how you can help or contribute to help your company survive and then thrive. Can you afford to defer a part of your salary for a few months? Can you do something extra, so that variable expenses can be reduced? Can you take on any additional responsibilities?  

Prepare for the worst and hope for the best. Be safe. Be prepared.