Strategies to Recover from Financial Hardship and Restore Stability

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Financial setbacks are common. It could be anything, such as car damage, job loss, unexpected expenses or a period of instability. But staying in the same situation is not ideal. It is important to have a proactive mindset and snap back from economic turmoil. Getting back on your feet is possible with a strategic approach. In this blog, we will be discussing some ways how you can regain stability by rebuilding your savings.

Assess your financial situation
By this, we mean, calculate your current savings, expenses and outstanding debts. Now, check the impact of the setback based on these factors and see if there is a scope to make improvements. This would be the stepping stone in helping you derive an effective plan.
Create a budget based on current financial standing
Start by prioritising essential expenses, such as groceries, gas, internet, etc. and identify places wherein you can cut down. Reduce non-essential spending and find smart ways to save money without compromising. Then set achievable financial goals within this budget. Do not forget to include a portion towards rebuilding your savings.
Make a debt repayment plan
There are two ways of looking at debt repayments. You can either allocate a certain amount towards repayment from your budget. Or you can consolidate two or more debts into one. Decide an option that fits well within your budget and aligns with your financial goals. If you have more than one debt, prioritise repayment of high-interest loans. As you reduce debt, there will be more funds at hand, which you can use towards improving your savings.
Look for ways to increase income
For this, you can consider taking on a side job, freelancing or doing a business. It will help you in recovering faster. Think of the ways you can generate extra cash flow based on your skills. This additional income will help you in gaining stability.  
Work towards building your savings
To avoid getting yourself into the same spiral, you need to prioritise saving. You can start small. Set aside an amount you can dedicate to saving on a regular basis. Consider setting automatic transfers. You can do this easily with ActivMoney on your Kotak811 Savings Account. To avail this facility, your bank balance must be ₹30,000 and above. This way, you can rebuild your savings and increase the amount saved each month. It is great for building healthy saving habits.
Seek professional advice
If you are struggling to manage and control your savings, you can consider getting guidance from a professional. There are many financial advisors and credit counsellors that will offer solutions based on your personal situation. You can get a comprehensive plan made from them, with strategies to maintain a healthy balance of debt and savings.

Some tips to maximise your savings

Once you regain stability, you may consider the following strategies to boost your savings:

Choose a premium savings account. They offer better interest rates, which is ideal for building an emergency fund.
Use separate accounts for different goals. Let’s say you want to save for travel, create a separate account dedicated solely for this purpose. It not only organises your finances better but also lets you track the progress on your goals.
Consistency is the key. Make savings a part of your routine. Contribute from time to time based on your lifestyle and budget.

Conclusion

In times of financial crunch, having access to a reliable and flexible savings account can be a lifesaver. You can open a zero balance savings account with Kotak811. It will allow you to manage your finances without the worry of maintaining a minimum balance. It provides the convenience of digital banking, competitive interest rates, and additional benefits like cashback on debit card spends.

As your financial situation stabilises, you can explore other offerings, such as Kotak811 Super Saving Account, to further enhance your savings strategy. This account offers premium perks, including higher withdrawal limits, cashback benefits and more. It is a versatile option for everyday banking and long-term savings goals.

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This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empanelled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees, and contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.