Money lessons the pandemic has taught us

Laveta Brigham

What COVID-19 has taught us about money management The coronavirus crisis has upended our lives in ways we could never have imagined. But among the silver linings to be gleaned from the pandemic, apart from the obvious such as spending more time with immediate family, are the money management […]


The coronavirus crisis has upended our lives in ways we could never have imagined. But among the silver linings to be gleaned from the pandemic, apart from the obvious such as spending more time with immediate family, are the money management lessons COVID-19 has taught us. From the importance of building up an emergency fund to diversifying investments and developing a lucrative side hustle, click or scroll through the things we’ve learned.



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If there’s one thing this pandemic has taught us, it’s that no job is 100% secure, however safe it may seem. The crisis has also shown that revenue from different types of investments can drop suddenly and even dry up completely because of circumstances beyond our control. For these reasons, relying too much on a ‘stable’ income can leave you vulnerable financially.



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The pandemic has confirmed what those who are sensible with their money have known for a long time: an emergency fund to cushion you from the shock of a crisis is essential. These savvy financial operators have a rainy-day sum of money kept in a separate high-yield savings account that they can dip into when the need arises.



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Having an adequate amount of money to see you through a crisis is of course the whole point of a contingency fund, but even a relatively small sum of cash will help. The Federal Reserve recommends you set aside enough to cover three months’ essential outgoings, while some financial experts suggest you should aim to cover six months.



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Knowing exactly how much cash is coming in and going out is doubly important during a crisis when money might be tight. A simple spreadsheet will work, but downloading a budgeting app such as Mint, BudgetTracker, Wally or PocketGuard, or using an online money management tool like BudgetTracker could make the process even easier.



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Be that as it may, the stock market has more or less recovered since the sharp COVID-19 dip in March. The key takeaway from this is that stocks are long-term investments, not short-term money generators. It’s all about being patient and potentially holding onto shares when the chips are down because they could recover in value in the future.



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The pandemic has reminded us not to put all our investment eggs in one basket. In fact, the best hedge against stock market volatility is a diverse portfolio that spreads the risk. If the bulk of your investments are in airlines, for instance, COVID-19 will have no doubt slashed the value of your portfolio. If however you’d diversified with some pharmaceutical stocks, your losses would have been offset.



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The last thing you need in a crisis is a massive credit card debt hanging over your head, especially if the rate of interest is sky-high, as is all too often the case. Some providers have been offering credit limit increases, payment holidays and other coronavirus relief measures but few are freezing interest for hard-up customers and any assistance is temporary.



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As the pandemic has made crystal clear, settling other high-interest debt like loans should also be a priority. Again, while some lenders have been willing to help struggling customers by offering them payment holidays and waiving missed payment charges, the relief measures won’t last forever and sooner or later the debt will have to be paid off.



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If you can’t clear your credit card or other high-interest debt, shopping around for an interest-free or cheaper deal is the way forward. Hitting the price comparison engines and finding more affordable alternatives can save you a significant amount of money, which is music to anyone’s ears during these challenging times.



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Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


For others, the temptation to splurge online can be hard to resist when they’re stuck at home so much. As well as panic buying, so-called ‘comfort buying’, online retail therapy triggered by anxiety, has surged during the pandemic as people look for ways to ease their coronavirus-induced stress.



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It has taken a pandemic and mass homeworking for many people to realize that splashing out on a barista-made coffee and buying lunch every day is a big drain on their finances. They’ve cottoned on to the fact that they can save thousands a year by packing their lunch and skipping the shop-bought morning coffee.



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Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


Many office workers may not have been aware before the pandemic hit that they can claim tax relief on their job expenses when they work from home. Examples of allowed expenses include heating, water and broadband costs, and remote employees can even offset their tax bill by claiming on any work-related equipment they buy such as a laptop or office chair.



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Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


People have had more spare time to go online as a result of the pandemic and with remote learning booming, many have been using this time judiciously to boost their financial literacy. The internet is awash with sites offering free financial advice, not to mention money management tools and other useful resources, which have come into their own during the crisis.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


Having multiple revenue streams you can tap into is even better as this crisis is proving. That way, you’re insulated to the max from a financial meltdown. Think about your skills, work out what you’d be good at and be prepared to multitask and jump from one money-making side gig to the other.



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Insurance was invented for times like these and the pandemic has punctuated the need for comprehensive coverage to enable you to keep paying the bills if you fall ill or lose your job – after all, government assistance only goes so far. Income protection insurance, though costly, is therefore one of the best ways you can protect your finances from the worst that can happen.



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Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


COVID-19 has resulted in countless cancelations of flights, hotel bookings and other travel plans, and while regulations state airlines, hotels and travel companies must issue refunds, many people have struggled to get their money back. This makes traveling without insurance that covers against cancelations all the more foolish.



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Life insurance sales have been surging due to the pandemic, particularly in the US where people are reportedly panic buying policies. Taking out life cover isn’t something anyone enjoys doing but ensuring you provide for your loved ones in the event of you passing away is a responsible thing to do, especially if they rely on you financially.



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Staying with morbid financial lessons, COVID-19 has stressed the importance of getting your affairs in order. As with taking out a life insurance policy, drawing up a last will and testament is something many people would rather avoid doing as nobody likes being reminded of their mortality. Nonetheless, failing to write a will can cause serious problems for the people you leave behind.



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Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


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