Financial insecurity is on the rise in India, thanks to mass layoffs, pay cuts, general volatility in the market, and a looming recession.
A lot of people without full-time jobs are facing financial pressure from which their more formally employed colleagues are protected. This is eating away at any semblance of peace or a sense of certainty for them.
Around 69 per cent of the households in India struggle with financial insecurity and vulnerability, according to a recent personal finance survey carried out by a media organisation.
In this context, it’s important to understand what financial insecurity is and what are the steps out of this?
What Is Financial Insecurity?
Financial insecurity or economic insecurity can be defined as the anxiety produced by the possible exposure to adverse economic events, and by the anticipation of the difficulty to recover from them, according to a research report, Measuring Economic Insecurity, by Bossert & D’Ambrosio.
According to a study by the United Nations, a full recovery from the Covid 19 pandemic will not be possible without addressing economic security and reducing inequality. Otherwise, people and families who already faced insecurity before the crisis are likely to be excluded from the benefits of recovery. Building resilience to future shocks provides an opportunity to reduce inequality and economic insecurity.
How To Get Out Of Financial Insecurity?
Try and get more familiar with your finances: The majority of our stress of uncertainty stems from a ‘fear of the unknown.’
Therefore, whenever you feel any pangs of anxiety, try to open your wallet, your bank statements, and your bill books. By becoming more aware of how you spend your money and why you do so, you would become better at money management and feel more in control of your spending habits.
Start journaling about your finances: Journaling about your money spending habits will make you more aware about your spending pattern.
Says Ashish Bhave, money and life freedom coach, CEO, WPH Services, a business success mindset coaching, training, and mentoring company: “Try to journal your money spending habits and pattern in the morning. You will not only feel better, but the writing exercise will make you more grounded and practical, too. It would also clear out a lot of negative energy, and allow more space for clearer thoughts about your finances.”
Discuss with another person: When you are really worried about some specific financial issue, it would always be good to talk about it with another person, a friend, or an acquaintance, who has a thorough understanding of finance, and who has a positive mindset about your problem. This is a good step in addressing any lingering financial problem.
Chart a plan: Having a plan is a necessity, as that could help you work towards a solution.
Bhave adds: “Overnight, your financial worries may not evaporate, but a solid plan, weighing your currency circumstances, savings, bank balance, opportunities, and debt could actually help you in the long run. If you have a financial advisor, you could create a plan with him. You could stick to the plan religiously, and change it as and when required.”
Accept your situation; do not compare: A mistake many people often do is compare their own financial situation with that of their neighbour or friend. But it is a dangerous habit, as it could lead to depression and anxiety. You need to first accept your own circumstances, and believe that your path is unique and different from another’s.
