top of page

7 personal finance rules can be broken during financial crunch

Personal finance rules act as a backup in the case of tough financial situations. Let’s understand which financial rules are allowed to break.

We follow personal financial rules our whole lives to get returns on our investments and assist us in tough times. Rules like budgeting, tracking our money, insurance, investments, and emergency funds. There are a few regulations that we follow religiously that can be broken in our tough times.

What are tough times? Tough times can be dedicated to you personally and worldwide as well. Situations are personally limited to you, such as the unfortunate demise of an active earning member of the family or sudden job loss. There were situations like covid pandemic and economic slowdown or recession when everyone was facing a financial crisis simultaneously.

Here we discuss seven personal financial rules that you are allowed to break:

Emergency funds You are supposed to have emergency funds for at least 6 months of your expenses. The rule of maintaining your emergency funds doesn’t work as you are facing financial downturns, as emergency funds are made solely for the purpose of maintaining financial stability when you are not able to keep them.

Timely bill payment Generally, you are supposed to pay your bills on time to maintain your credit score and authenticity. But, during the financial crunch, if you are not able to pay bills for your wants as you have to prioritise necessity over and above anything else. So, rules for keeping track of timely bill payments can be broken when your finances are unstable.

Credit card payment Credit is not supposed to be left unpaid, but in the case of a financial crunch, you can leave balances on your credit card and pay the minimum amount as you pay. You just have to pay as much as you can after paying for what is necessary for you and your family.

Saving 10% of your income In an ideal personal financial plan, you must save at least 10% of your gross income. But in the case of a worsening financial situation in the country or at your personal tough times, it’s okay to skip your savings because you are already using savings or invested amounts in your financial crunch.

Withdrawal from investments Withdrawal is supposed to stay invested till your financial goal is not achieved. It helps you to be ready for a particular dream. But, when you do not have another option to fulfil your necessity, you are totally allowed to break your investment.

Borrowing for personal expense It is okay to borrow if you don’t have money to survive during a time of financial crunch. It is quite common to run out of money and fight for survival when sudden layoffs happen, along with high inflation in the country.

Grabbing opportunities in low-trend markets The stock market downturn is an opportunity to invest in value stocks, as they are available at lower prices than the market was at its peak. But, when you are suffering from critical financial issues and are unable to pay regular bills, it is okay to miss out on some market opportunities.

Managing personal finance is all about prioritising the needs of you and your family during tough times. Once you master that, financial independence and peace will come hand in hand. Breaking all the personal finance rules that are essentially related to investing and saving can be broken if your needs are compromised.

Courtesy - Mint Genie

Link -

0 views0 comments


bottom of page