7 FINANCIAL LESSONS TO LEARN FROM COVID-19

I’m sure you’re familiar with Covid-19 and how it is ravaging the world all over, but let’s talk about some of the financial lessons we need to learn from the pandemic.

Financial lessons from covid-19

The economic changes caused by the Covid-19 pandemic is one which has not only visibly shaken the world, but has continued to teach us a few critical financial lessons.

The pandemic has impacted the world in many different ways, though the severity of this impact has been more pronounced for some than others.

No one saw this coming… No one at all.

I mean, who didn’t wake up on 1st January 2020, and listed a thousand and one goals they’d want to achieve for themselves?

Read also: 10 Financial Goals You Can Still Accomplish This Year

The Covid-19 pandemic has given every one of us a wake-up call as we ponder over our financial lives and spending habits.

Even those who are previously totally unconcerned when it comes to managing their finances have jolted back to the harsh economic reality on ground.

One way or another, everyone has been sorely affected by the pandemic. If you weren’t affected by the massive job losses taking place all around, then the decline in value of your investments has probably started to cause you worry.

It may be that you’re dealing with the health consequences of the virus, which has caused you to be separated from your loved ones.

If you’re a small business owner, the pandemic has either forced you to close business or keep your customers away totally.

Or perhaps, it’s merely the fact that you have been on lockdown ever since, and you’re now starting to lose your mind.

Whatever the case with you, you must know that tough times, like the one we currently find ourselves in, can be great teachers too.

And they do teach us many things. Especially the importance of being financially ready to be able to take on any formidable eventuality heads on.

Without further ado, here are seven financial lessons everyone should learn from the Covid-19 pandemic.

7 FINANCIAL LESSONS THE COVID-19 PANDEMIC HAS TAUGHT US

1. Emergency funds are necessary

Let me quickly say this: you should never see emergency funds as wasted assets.

If you weren’t previously a subscriber to the emergency funds idea, the Covid-19 pandemic must have shown you that there’s wisdom in having emergency funds saved up.

If you’re among those who experienced a pay cut, job loss or had urgent medical emergencies, then you probably now know the importance of having adequate emergency funds saved up.

Adequate emergency funds should conveniently foot your expenses for a period of 4 – 6 months till you get your footing again.

Hence, saving up for emergencies should be given a top priority in your financial goals going forward.

2. Having a single source of income is financial suicide

I have always maintained that having a single source of income is equivalent to putting one’s eggs in a basket.

And that is never a good idea.

Depending on a single source of income means you’re one foot away from poverty.

So also, trusting that your 9 – 5 job will always be available to you all the time is like hoping for a miracle that might or might never happen.

To put it mildly: it will end in tears.

Those who have stuck solidly with their normal jobs prior to the Covid-19 pandemic are probably learning their bitter lessons now; especially if they are among those who have been affected by the massive job losses recorded all over the world.

This is why you need an alternative source of income.

There’s no limit to the number of extra income you should create. Have as many as you possibly can!

There are multiple ways to earn money online without even leaving the comfort of your home or quitting your primary job.

So find one that resonates with your skill set and have a go at it.

Having an extra source of income will help you meet necessary expenses and give you extra cash to allocate towards emergencies and investments.

3. Health is wealth

You can’t enjoy wealth if you’re not in good health

Anonymous

One of the financial lessons everyone should learn from the Covid-19 pandemic, it’s how it has made us realize that our health continues to be our most valuable asset.

The lockdown being experienced world over, due to the Covid-19 pandemic, has given us the opportunity to put our physical and mental health into perspective by helping to reduce stress and workload.

No matter the riches you have accumulated, if you’re not healthy enough to enjoy it, then it’ll be useless to you.

Also, it is never good to rely on your employer-provided health insurance plan. This is because this plan may offer insufficient coverage and might even end when you lose your job.

4. Budgeting is of utmost importance

Many people would rather take on the Whomping Willow than prepare a budget for themselves.

Many, howbeit unwilling, are now forced to monitor how they spend every available dollar closely. This is, of course, necessary, owing to the financial stress that the pandemic has brought upon most families across the world.

With the number of job losses and other numerous financial insecurities that the Covid-19 pandemic has brought with it, a budget will help you properly manage your funds.

To generate data for your budget, choose any 30 day period, especially during this pandemic period and summarise all payments made on your credit cards and all other expenses within this period.

Doing this will help you put your spending habit into perspective and properly draw out a good budget to match your current financial situation. There are several budgeting tools online that can assist you with this.

5. You should never take a loan you cannot repay

Loans, when appropriately managed, can be a means to fulfilling critical financial goals like owning a home, a car, and other valuable assets.

If however, you’re in the habit of continually borrowing money with the hopes of settling them with your next paycheck, then you must have been brought up to date with the current reality of things especially if you are among those who lost their jobs.

The Covid-19 pandemic may have hit hard on your savings and finances, but you must consider your repayment capacity carefully before you take any loans.

This is because, an unpaid loan brings with it, immense psychological stress and may hurt your finances and right standing with financing facilities.

One should be very cautious when taking a loan during this pandemic period when a total loss of income could be on the cards.

6. Making money online is one of the most sustainable sources of income

If you aren’t yet making money online, then you’re missing out big time.

Did you notice how the Covid-19 pandemic shook the world economy all over? Millions of hardworking people have lost their jobs already due to the epidemic.

This alone should tell you something. It doesn’t do just to have a regular 9 – 5 job and then relax, with the hopes that all would be well. You’d be doing yourself a great disservice by living this way.

So what should you do? Go online and make money!

Yes, it’s as simple as that.

With the right digital skills, you are guaranteed to earn a sizeable income in no time.

Some of the best ways you can make money online to augment your finances include:

  • Blogging
  • Ecommerce
  • Affiliate marketing
  • Paid surveys
  • Cryptocurrencies
  • Freelancing

7. Nothing lasts forever. Learn to enjoy the moments as they come.

Lastly, one of the vital financial lessons we need to learn from Covid-19 is the realization that nothing lasts forever.

You see that sweet six-figure job you have? Those financial goals you are hoping to achieve? All the goodies of life?

They are all ephemeral. The story could change in just a twinkle of an eye.

The Covid-19 pandemic, no doubt, has been a sobering experience for every human all over the world.

If you’re lucky to have somehow escaped the brunt of the pandemic, then it’s probably time to reflect and ponder on the non-financial lesson therein.

Think about it. You’re probably now spending more time with family than you usually would have.

Also, the pandemic has given us the much-needed breather from our various tight schedules, to appreciate life and the people around us and also reflect on the choices we make regarding our finances.

So rather than dwelling too much on the negative, it is necessary we savor this moment and make the best out of it.

Tough times do not last, but tough people do.

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