My experience of Covid and Personal Finance Lessons

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During the last week of April 2021, our whole family infected with Covid. It is a horrific time when the whole family infected with Covid. But luckily we all came out from that. During this period, I too learned certain lessons related to Covid and Personal Finance. Hence, thought to share with you all.

Covid and Personal Finance Lessons

My experience of Covid and Personal Finance Lessons

# Cash is KING!!

Yes, we all addicted to online money transfers or UPI-based fund transfers. However, during my hospitalization, I realized the importance of cash. We all three (me, wife, and daughter) went to the hospital in a hurry and admitted with few thousands of cash in my pocket. But later on, I realized that few expenses can’t be payable through UPI or net banking (like paying money to fruit sellers or some small expenses). As we all being patients, we faced a little bit of cash crunch even though money is available in our account. The sad part is that we can’t go out and withdraw the cash nor anyone was allowed to withdraw the cash and give us in the hospital.

My wife and daughter discharged two days earlier than I. When I booked the cab for them, the driver was not ready to accept the money in any online form. Instead, he insisted only in cash mode. For me, no option but I was forced to pay additional money to the staff of the hospital and get the cash from them to pay to the driver.

Hence, these small but during that period most important incidents, made me learn the importance of cash.

Even though we keep a certain amount of cash in our home, but the mistake I have done was that in a hurry, I not took the cash with me while hospitalized.

Moral-Old beliefs of cash still relevance (even though not fully) even though we moved to cashless

# Importance of Emergency Fund

First time, I was in a situation to touch my emergency fund to pay the advance amount during the hospitalization. I felt happy that I no need to worry. I set aside around 2 years of my monthly expenses as an emergency fund. Before Covid, my emergency fund used to be around 6 months of my monthly expenses. However, after last year’s lockdown and Covid, I increased my emergency fund drastically to two years of my monthly expenses.

Getting the bed during this horrific time is the toughest task. Hence, hospitals are in a demanding mode. Because of this many hospitals not accepting the cashless benefits of insurance. Even though it is against the rule, we have no option but to pay the bills and reimburse later from insurance companies.

In such a situation, an emergency fund is handy. Even though I have not utilized my emergency fund, but having an emergency fund during such a crisis will give you great relief.

Moral-Having emergency fund will give you a boost to fight with any uncertainties of your life.

# Park your Emergency Fund WISELY!!

Where you park your emergency fund is also important. Many experts suggest you park in Liquid Funds or other debt funds. But remember in the case of Liquid Funds, few funds offer you instant redemption of up to Rs.50,000 a day. If you need beyond that, then it will take T+1 day. I mean if you request for redemption before the cut-off time, then you will get the money the next day. If unluckily you placed your redemption request on Friday, then you will get money on immediate next working days (maybe on Monday). Hence, even though the name is LIQUID, they are not so liquid to manage your emergencies.

Instead of chasing returns on your emergency fund or thinking too much on taxation, it is wise strategy to follow as below.

  • Park around 1-2 months of your monthly expenses in your savings account.
  • Park the remaining amount in a Bank FD of your choice of a year.
  • While parking emergency fund as FD, make sure to split the each FDs equal to your monthly expenses (like suppose your monthly expenses are Rs.1 lakh, then make sure to split your each FD of Rs.1 lakh value). This will create more liquidity without any premature FD withdrawal penalty.
  • Make sure to book FDs using an internet banking facility. So that if you need money in midnight, you can liquidate the FDs instantly.

Moral-Keep your emergency fund SAFELY and where you have highest LIQUIDITY. Neveer listen to the financial industry. They are always ready to SELL something to you. Keep your emergency fund as per your comfort but not as per their comfort.

# I used credit card than emergency fund

Even though I have sufficient emergency funds, I have not utilized them. The reason is, we all three admitted to hospital on 1st of May. My credit card billing date is the 22nd of every month and I have to pay the bill on or before next month’s 10th. So, if I use a credit card to pay the bills in the first week of May 2021, I have enough time to pay the dues on or before the 10th of June 2021.

Hence, instead of utilizing my emergency fund, I have utilized my credit card to pay the bill. Once I was out of the hospital, I immediately submitted the necessary documents to the insurance company. Claims were settled and I have cash now to pay the dues of whatever I have utilized for our hospitalization.

Hence, during the crisis, instead of panic, it is better to use our commonsense and act. I used a credit card not because I don’t have money. But I used it mainly because I will get around 1 month of a window to utilize the money than using my emergency fund. As usual, I will pay all the dues before the due date. Hence, no worries.

Moral-Use commonsense without panic. You always find the ways.

# Cashless benefit of health insurance is not a RIGHT but a FACILITY

Many think that if we have health insurance, then the cashless benefit is our RIGHT. However, because of Covid, many hospitals not accepting cashless benefit options. They are demanding to pay our bills from our own pocket and then approach the insurance company for reimbursement.

You have the options like fight with hospitals, search for a hospital where the cashless benefit is available, or accept the demand of the hospital. In such a horrific situation, where getting a bed is not so easy, I felt paying is a far better option than arguing with them for cashless benefits.

Luckily in my case, my health insurance company settled the claim within few days. Hence, no need to worry. But the learning is that be ready to accept the reality of pay now and receive later than a cashless option.

Moral-Be ready for the BOUNCERS during emergencies.

# 100% Cashless is not possible

No matter how much coverage you have, there are certain expenses that will not be reimbursed by health insurance. Hence, it is always better that you mentally prepare yourself to pay around 25% to 30% of the cost of the hospitalization from your own pocket.

Luckily in my case, I got the reimbursement for almost around more than 90%. Hence, my liability was for just around less than 10%. But you have to be mentally ready to pay the amount which is not reimbursed by health insurance companies.

In such situation, your emergency fund will be handy.

Moral-Never rely 100% on health insurance for hospitalization cost.

# My Corona Kavach Policy turned useless

Considering the way Covid was spreading in Bangalore, I sensed somewhat uncomfortable relying on normal health insurance. Hence, purchased Corona Kavach for our whole family on 21st April for Rs.5 lakh. However, as there is a window of 14 days waiting period and we all three hospitalized within that period, I was unable to use Corona Kavach for my claim.

Instead, I have utilized my family floater health insurance (Super Top Up not came into the picture as the billed amount was less than Rs.5 lakh deductible).

Moral – Sometimes emergency may knock us before we plan for emergency!!

Conclusion- I first time sensed how lucky I am by being in this profession. Because, during this crisis, my doctor clients came for my help and in fact, one of my doctor clients took all the initiative and arranged the bed within few hours for all of us. Even during their busy schedule, they used to reply to me either through Whatsapp messages or calls. Thanks to this wonderful profession and the doctors who guided me and helped.

These are my sharings of Covid and Personal Finance Lessons. If you too have certain experiences, then you are welcome to share your Covid and Personal Finance Lessons here by commenting. It may help many to combat such emergencies of life.


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48 Responses

  1. Basunivesh ji can my brother expired due to covid and his wife who is a housemaker with 12 yrs old kid are in need of help.i think he is insured for around 75 lakhs and I need your professional advice for their faninacial stability.i learnt many fianancial things from your blog but I want to take professional advice as this is the only source of future income for sholud I contact you and what are the charges.kindly help them

  2. Hi Basu sir,

    Glad to know that you and your family are doing fine. Please take care of your family and your health.
    Hope you got your taste buds working again 🙂 (on a lighter note).
    I heard it will take more than a month back to get the sense of taste and smell back.

    Thanks for sharing your experience with us. This will help us to take care of both physical health and financial health.


    1. Dear Harsha,
      Yes, we are fine and retained our taste buds 🙂 But for me post Covid complications are still there. Yes, you are right, it may take at least a week or two weeks to completely recover. Be safe yourself and with your family.

  3. Dear Basavaraj,
    Thanks for your Covid journey, a lesson from your experience. Wishing good health at all times to come.

  4. Thanks for sharing your experience and helping others to know the lots of info. Glad to know you & your family safe and healthy. Sir, could you pls share the insurance name which u took and they gave 90% reimb . thanks in advance …

  5. Dear Basavraj, it definitely could have been an horrifying experience for you. But God is great and you all came through unscratched. You were luckey to have doctor friends for you who made arrangements of the bed. During this period, more precaution is required. What I have been doing is ironing all the notes taken out from the ATM and also whatever change I get from market, is put in a separate packet. Thorough washi g of vegetables and fruits with salt and baking powder and keeping them away at least for a day and also all wiping all the plastic packets with soap water and putting them away for a day has helped me. There are strictly no servants in house and no visitors. We don’t go out and mostly depend on online purchases. This has helped us a lot.

    1. Thanks for your advice. I am happy that someone else reaffirmed my belief.
      We are following all of these steps since mar-2020. And strictly followed no visitor policy and did not visit others house or any functions.
      Many people made fun of this and ridiculed that we are following these precautions.

      So far we are good and planning to continue atleast till every one of us are vaccinated (we are family of 6).
      Hope, kids will be vaccinated by start of 2022.

  6. Best wishes for your health recovery from covid. Please give formal complaint against the hospital for not accepting cashless insurance benifit. So that such unscrupulous demands can be punished.

  7. Dear Sir,
    Very glad to hear you and your family recovered fully and are safe. my best wishes to all of you. Very nicely elaborated article.
    Thank you

  8. Sir, Glad to know you & your family have successfully sailed over the health crisis situation & are healthy & safe. Let’s stay positive & carry the torch of hope that the world will soon see bright light.

    India is still a cash economy & this pandemic has created an opportunity to expand it & is being exploited to ones benefit. This is due to low levels of digital money adaptability & acceptability .
    In a way people feel empowered & confident to hold money in physical form , a classic example is bank employees or anyone who handles cash in transaction. It is love for money that drives this psychological & personal behavior.
    Living in Kenya for 7+ years you see even petty transactions , like cab / milk / vegetable / street food stalls etc, accept digital payment ( through mobile ) due to high level of mobile money payments . And it the same even in tier-2/3 towns / cities of Kenya . India has a long way to catch-up .

  9. Hello Sir,

    Glad to know that you and your family have recovered from Covid. Wishing you a healthy life.


  10. Hello Sir,

    Thanks a lot for sharing your experience about hospitalization and insights on plan/ prepare/ facing emergency situations.
    Good to know that you and family members recovered back. Take good rest.

  11. Good to hear that you and your family are out of Covid now. Continue to take healthy food which can help you to reduce weakness which would have caused with covid.

  12. Dear Basavaraj Tonagatti,
    Thanks for sharing valuable inputs on how to act in emergency situations

  13. Thanks a lot for sharing your Covid 19 related experience.The article is certainly helpful in making sound financial decisions in crisis.Going to share it on Facebook .

  14. Thanks a lot for sharing your experience with us. Learnt a lot. If you do not mind, please tell us the health insurance plan that you took.
    Thanks again.

  15. Sir, thanks for your post . How you and your family are all safe and fine.Can you please let us know what health insurance policy you had, which supported you during this time.Regrds, Ashis

  16. Good use of ‘professional’ skill and ‘common sense’ plus a bit of sponteneous learning through exposure! I am sure you experience and advice will benefit many. Get totally fit, all of you, soonest. Best of luck and prayers.

  17. Thanks for sharing your experience with us Sir.
    Good to hear that you and your family are fully recovered.
    God bless you and your family.

  18. Namaskar Basavaraj,

    Hope you and your family are doing well now and on path of complete recovery.

    Excellent, important and an eye opener article for many people. Stay safe and healthy.

  19. Thanks for sharing these lessons Basu.
    Glad to know you and family is safe and healthy now. Stay strong and take all precautions necessary post COVID.

  20. Great article. Very relevant points. Thank you for this.
    Good to know that you all have recovered. Stay safe.

  21. I am amazed with your Passion for financial literacy and even surprised in you getting this blog in these tough times. Its good to know of your recovery. I know people are talking of some sort of side effects of Covid medication. so please take more care in near short to medium term as well.

    1. Dear Subramaniam,
      I am doing this since 10 years and now its habit for me 🙂 Yes, we recovered fully and taking care of post covid issues. Thank you for your supportive and kind advice.

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