Short answer: COVID showed that financial wellness is mostly about resilience: having cash you can reach quickly, the right insurance, low and manageable debt, and paperwork your family can act on. Those lessons still apply in 2026. Build an emergency fund of three to six months’ expenses, keep health and term cover adequate, update nominations and a will, and avoid letting EMIs take too much of your income.
Last updated: 13 October 2026.
We first wrote this article in December 2021, in the middle of the pandemic, when salary cuts, the RBI’s loan moratorium and hospital bills were on everyone’s mind. Much has changed since. The moratorium is long over and most incomes have recovered. But the shock taught lessons that are worth keeping. This rewrite turns them into a practical checklist for today.
What COVID taught us about money
| What happened during COVID | The lesson | What to do in 2026 |
|---|---|---|
| Sudden job losses and pay cuts | Income can stop without warning | Keep three to six months of essential expenses liquid |
| Large hospital bills | Health cover from an employer alone can be thin | Hold a personal family floater health policy |
| Loan moratorium added interest | Deferring EMIs is not free; interest kept building | Keep EMIs affordable so you never need a pause |
| Families struggled to find documents | Paperwork matters when someone falls ill or dies | Update nominations, keep a will and a shared asset list |
| Investments fell sharply in March 2020 | Money for near-term needs should not be in volatile assets | Match each goal to the right type of investment |
1. Liquidity first: the emergency fund
The households that coped best had cash they could access within a day. Investments that look large on paper do not help if they are locked in or have fallen in value just when you need them.
Worked example: The Menon family spends ₹60,000 a month on essentials, including EMIs. A three-month fund is ₹1,80,000; a six-month fund is ₹3,60,000. They keep one month in their savings account and the rest in sweep-in FDs, which they can break quickly if needed.
Bank deposits are covered by DICGC deposit insurance up to ₹5 lakh per depositor per bank, including interest. Use our emergency fund calculator to set your own target.
2. Insurance: cover the big risks, not the small ones
- Health insurance: A personal or family floater policy that stays with you even if you change jobs. Employer cover is useful but ends when the job ends.
- Term life insurance: If anyone depends on your income, a pure term plan is usually the most cost-effective way to protect them. Our term insurance guide explains features and pitfalls.
- Loan protection: If you have a large home loan, consider whether your term cover is enough to repay it, rather than relying only on a single-premium loan insurance policy sold with the loan.
- Help at home: Government schemes can offer low-cost cover for domestic workers and lower-income families. See insurance for domestic help through government schemes.
Tax benefits for insurance premiums depend on your regime. The new tax regime, now the default, allows very few deductions. Under the Income-tax Act, 2025, which applies from 1 April 2026, the section numbers have changed, so check our income tax hub before claiming anything. Buy insurance for protection first, tax second. More basics are in the insurance hub.
3. Keep debt at a level you can carry in bad times
During the moratorium, many borrowers paused EMIs and later found that interest had kept building on the outstanding amount. The safer approach is to borrow only what you could keep paying even if your income dipped.
- Keep total EMIs comfortably below half of take-home pay; many lenders use this kind of ratio. Check yours with the FOIR calculator.
- Pay credit card bills in full. Revolving card debt is one of the costliest forms of credit.
- Avoid stacking small app loans. They are easy to take and hard to escape; see escape the payday loan trap.
- If you are struggling, contact your lender early to discuss restructuring rather than missing payments.
Worked example: Arif earns ₹70,000 a month and pays EMIs of ₹38,000, about 54% of his income. If his pay dropped by 20% to ₹56,000, EMIs would take 68%, leaving very little for essentials. Bringing EMIs down to around ₹25,000 by closing his costliest loan gives him a much safer margin.
4. Paperwork your family can use
- Add or update nominees on every bank account, FD, demat account, mutual fund folio, EPF account and insurance policy.
- Make a simple will and tell a trusted person where it is.
- Keep a shared list of assets, liabilities, insurance policies, and login hints (never share passwords in plain text).
- Make sure at least one other family member knows how to reach your bank and insurer.
- Understand what happens to your debts if something happens to you; read what happens to loans if the borrower dies.
5. Match investments to goals
Markets fell sharply in early 2020 and then recovered. Investors who needed that money within a year were hurt; long-term investors mostly were not. Keep money needed within one to three years in deposits or low-risk debt options. Use equity, such as SIPs in diversified funds, for goals five or more years away. Read common SIP mistakes before you start.
One more lesson from 2020: do not stop long-term SIPs in panic when markets fall, if your emergency fund and income allow you to continue. Those who kept investing through the fall bought units at lower prices. Stopping is sensible only when you genuinely need the cash flow for essentials.
6. Protect your credit score
A good credit record gives you options in a crisis, such as a lower-cost personal loan instead of an expensive app loan. Pay on time, keep card usage low, and check your report once a year, for example on cibil.com. Our guide to improving your CIBIL score explains the habits that matter.
A one-page financial wellness checklist
- Emergency fund of three to six months’ essentials, in liquid form.
- Personal health insurance for the family.
- Term life cover if anyone depends on you.
- Total EMIs at a comfortable share of income.
- Nominations updated everywhere; a will in place.
- Investments matched to time horizon.
- Credit report checked in the last 12 months.
If an expensive loan is straining your budget, compare lower-cost personal loan offers from RBI-regulated lenders.
For related reading, see money mistakes to avoid in a crisis and tips to overcome financial anxiety.
Frequently asked questions
What does financial wellness mean?
It means being able to meet today’s expenses, absorb a shock such as job loss or illness, and stay on track for future goals without constant money stress.
How big should my emergency fund be?
Three to six months of essential expenses, including EMIs, is a common guideline. Those with irregular income or dependants may want more.
Is the RBI loan moratorium still available?
No. The COVID-era moratorium ended in 2020. If you face difficulty today, speak to your lender about restructuring or rescheduling options.
Do I need personal health insurance if my employer covers me?
It is wise to have your own policy as well, because employer cover usually ends when you leave the job and may not be enough for a serious illness.
Why are nominations important?
Nominees can claim accounts and policies more easily, which helps your family access money quickly in an emergency.
Sources
Disclosure: FundsTiger (Gatimaan Finance Advisors Pvt. Ltd.) is a loan marketplace and lending service provider for RBI-regulated lenders. Aparampaar Finance Pvt. Ltd. (Omozing), one of those lenders, is a related party of FundsTiger. This article is general information, not financial advice. Read your loan agreement and KFS before you decide.