9 practical steps to prepare for and navigate the financial crisis due to coronavirus


The palms are worn out from cleaning and scrubbing. Hand cream was not on the shopping list. Clothes have to be folded; cooking never seems to end; and one must not crib but be grateful for our relative privilege. What happens when all this ends? Nope, all those predictions are wrong. No one can tell.

We are all spending a disproportionate amount of time trying to figure how the worldwill be after
this corona saga. Some romanticise work from home; some fear the deepest recession; some
imagine complete government control of our lives; and some like to see the end of flap validation
and return to local community based living. We just don’t know.

We love living in the tomorrow. The idea that there is a better place to go to, and that somehow it will all be different, and nicer. So we imagine we will holiday after retirement; get fit some day in the future; and begin saving and retire our debts in that bright tomorrow. Our resolutions for our post covid-19 world are quite similar. They help us cope, deny, forget and escape current realities.

So the world won’t change? Of course it will. Nothing in recent memory has impacted the entire
world like this. Every crisis has created something new, nice, big, awe inspiring, and enabling us to
leap ahead. Such is the power of human innovation. But that path isn’t linear. Not is it amenable to
being identified as it happens. We won’t even connect the dots while it all happens.

Then one day, we will use the powerful mix of hindsight and nostalgia and weave that story. A story
that will fit into events we choose to consider. We will all tell it to anyone who cares to listen. It will
be the big story of our lifetime. Except that we don’t know it now. However hard we try our hand at
figuring it out, we will fail.

Which is why it makes sense to drop all those predictions and worthless crystal gazing, and accept with utmost humility that the most beautiful thing about the future is that it is unknown. And then we get to the list of to do, for here and now, as we navigate these tough times.

First, don’t lose sight of the cash. Keep money handy, and spend very carefully. Do not deny the possibility of losing the job, or being furloughed briefly. Keep the expenses at the minimum as if it is an emergency. Conserve the bank balance. For as long as needed.

Second, prepare to become redundant or underpaid. When no one is producing goods or services, jobs are next on the line. Prepare mentally for a period of possible unemployment. Consider skills to acquire; plan to keep cool and collected; take help to remain socially and mentally supported. Do not despair or deny.

Third, shun debt like a disease. Do not borrow, even from friends and relatives. Do not use that credit card if you can. Pay it in full always if you do. Switch to the debit card until this crisis blows over. If you think you will default on existing loans, seek help and counsel. Earlier the better.

Four, make a mental list of assets you can liquidate if needed, even if it is at a loss and a lower
price. It could be your gold, the property you bought as investment, your equity or fund holdings, or
those works of art. Know what is the pecking order of access if you need money. Don’t worry you
can buy them all back when times are good. But you should know what you will give up. No, don’t
take loan against assets.

Five, be willing to trade off some long term for the short term. You kept that money aside for
retirement. You told yourself you won’t touch it. But if you are faced with loss of income and have to
access it, do that instead of borrowing, or selling something cheap, or allowing credit card ever to
accumulate. Be willing to trade some goals for the other.

Six, do not fall for traps and tricks that play on the crisis. Snake oil sellers will tell you that it is the
best time to buy property cheap. Or that shares are trading much lower. Or that you must buy like
one Mr. Buffet does, when there is blood on the street. Don’t trust these stories. This is not the time
to speculate or gamble.

Seven, keep your eyes and ears open to new opportunities to work and do something in addition to
what you are already doing. A crisis is a time to figure what is newly needed in the changed
environment and how you can plug your skills in. No one knew that people who wrote codes will be
sought after once the Y2K and tech meltdown crises ended; no one thought that delivery boys and
warehouse operators will thrive in the online retail boom. If you only focused on what you currently
do, you will miss the new that will emerge as the crisis dies down. Fight the fire and protect
yourself, but don’t miss the shoots that will emerge from the burnt forest floor.

Eight, keep questioning your purpose and your contribution. Not just during this crisis or after. Your
relevance to the world around you is tightly woven into what you bring to the table. Be sure you are
solving problems, saving resources, enhancing efficiency, and making a difference. In as many little
ways as you can. Don’t just sit there and gossip, get things done.

Nine, don’t assume that everyone will become a changed version of their previous selves once this
crisis is over. People forget and slip back. Events that are big today fade into memories. We return
to the old because we like the comfort of what was familiar. So don’t expect the whole world to
become a virtuous place and a new haven.

Read all the predictions for the future with a smile. Nod calmly at those who tell you that they saw it all coming. Discount extreme theories of optimism and pessimism. Keep focus on the present, preserve yourself and your household, and handle that money you have, very very carefully.