The festive season brings respite from what has been an extremely challenging year. We can take a breather and rejoice in the fact that we have overcome steep odds. The Covid-19 crisis has turned our world upside down.We are slowly returning to something resembling normalcy.

However, things remain difficult for countless people because of the economic fallout of the pandemic. Money management has never been as critical as it is now.

We’ve been taught some harsh lessons we’d do well to remember when better days come. In keeping with the festive spirit and the triumph of good over bad, here are the 10 demons you’d do well to exorcise from your financial life.

1. Going without health insurance

To borrow a 2020 metaphor, going without health insurance is like stepping into a crowded marketplace without a face mask —you may survive this adventure, but is the risk worth taking?

By now, you may personally know someone who had multiple family members hospitalised for Covid-19, their finances devastated by the ordeal.

Depending on savings, friends and family, or even crowd-funding websites isn’t ideal.Protect yourself: buy health insurance.

2. Having no life cover

This year provided us plenty of moments to reflect upon our mortality and think about how our families will sustain themselves should we are not around.

Relieve yourself of some of this stress. Get adequate term insurance coverage that’s at least 10 or 20 times your current annual income.

The time to be sitting on the fence about life coverage is past us.

3. No rainy day fund

At a time of economic hardship such as this, money in hand is worth gold. If you are solvent, you are likely to survive. And for you, losing income temporarily would be just a bump on the way, and not a calamity that puts an end to your life plans. Therefore, save up. Save at least three to six times your currently monthly income.

4. Not diversifying savings 

The pandemic had nothing to do with the crisis some banks experienced this year. Their depositors were left without access to their life savings. The result? Weddings had to be postponed. Medical treatments couldn’t be funded. This is a reminder that there’s no such thing as risk-free banking. Savings must be diversified with different banks to lower risks and maximise rewards.

5. Running after guaranteed returns

Interest rates have been trending downwards. Economists says we’ll not see double-digit rates soon. Among its repercussions is the impact on fixed income earners — especially senior citizens. Their retirement savings have been hurt, making sustenance a challenge. This is a reminder to not be hung up on guaranteed returns.

Taking no risk is also a great risk. If you’re young, equity investment may be good for you.

6. Chasing yesterday’s winners

Gold won in 2020. But those who tried to get into gold in 2020 may have lost. The message is clear. Long-term thinking helps. Short-term thinking leads to crushing losses.

A well-balanced portfolio with fixed income, equities, gold, real estate and small savings is your best bet against volatility. So invest to your plan, and buckle down for the long run.

7. Messy credit history

The economy shut down in April. Millions struggled with their debts. Then came the moratorium on loans. But the option to defer payments was given only to those regularly repaying their dues till February 2020. It seems only they will now benefit from the waiver of compounded interest, if it happens. . In a tough time, your late payments could snowball into an unmanageable crisis.

8. Credit card debt

Petty debt is easy to get into. Petty debt is also expensive. One must exercise caution using credit cards and other forms of unsecured credit to fund lifestyle. Credit is easily available when the times are good. During tough times, the high rate of interest can become an albatross around your neck. Therefore, pay off your expensive debts aggressively, within the interest-free cycle. It will help you when the going gets tough.

9. Not having a budget

The ongoing situation demands frugality. However, frugality can be maintained even after we come out of the pandemic. Having a monthly budget and sticking to it, ensuring forced savings, differentiating between needs and wants and goal-oriented thinking are useful habits to have at all times but especially during a tough period.

10. No continuity plan

With a deadly virus in the air, we're constantly reminded that life is delicate.But life must go on, too. Continuity of financial plans-whether you're there to see them through or not-is crucial to any family. Therefore, empower your dependents with knowledge of what needs to be done if you're incapacitated. If you’re of a ripe age, prepare a will. Settle unsettle debts. Tie up the loose ends in your finances.

The writer is CEO, BankBazaar.com