The world is no longer the same in the aftermath of the COVID-19 crisis. The economic crisis has led to massive layoffs and pay cuts in the entire nation, leading to financial problems for many. From devastating health hazards to the financial crisis, it has impacted our lives in several ways.
All this has taught us several important things, including some personal finance lessons that we should not ignore in the future.
Let’s look at those and try to implement them as much as possible in our lives.
Banks have played a crucial role in helping consumers navigate the covid crisis. From providing special relief packages to offering moratoriums on ongoing loans, banks have helped their customers in every possible way. Moreover, during the pandemic, there was a sharp increase in the number of digital banking users as there was a restriction on the availability of physical channels. This taught that there is no need to visit the bank branch as one can make the banking transactions online.
Importance of savings
Our parents taught us the importance of Savings in childhood, but as we grow, some ignore those lessons and try to enjoy the present without worrying about the future.
But, it was the savings that have helped survive many during this covid-19 crisis. Seeing the importance of savings should never be ignored and practiced every month. Whatever be your monthly earning, a fixed portion of it should always be saved for future use.
Importance of Health Insurance
One of the most important requirements during this covid crisis was a comprehensive insurance cover, especially Health Insurance. It doesn’t matter how much one has saved before; having comprehensive health cover can no longer be overlooked as a luxury because it’s a necessity. Here are a couple of things consumers should look for and have in their insurance portfolio.
- Health insurance
- Life insurance
- Term insurance
And while selecting these insurances, one should look and compare for the coverage amount, premium charges, type of coverages, and coverage duration.
During this pandemic, the behaviour noticed in individual spending habits was:
a) Sharp cut on spending
b) Save and stockpile
c) No shopping, no dining out
d) Investing whatever was possible
We also noticed a sharp cut in people’s spending habits during this pandemic. This was because people were packed in houses, and hence they could not go out for shopping, dining, and movie. But, all this has brought severe personal finance lesson which covid crisis has taught us – that is we can easily live without luxuries, and cutting down on it can help us save much money. The money saved can later be used for investment and bring us returns.
Personal loans and credit cards can be our saviours in a tough time
We often see people going for personal loans, but most of the time, we fail to categorize if the reason behind the loan is genuine or not. In the financial crisis, when people were dealing with layoffs and pay cuts, personal loans and credit cards were the only saviors. Availing personal loans and using money from the credit card helped people meet their medical needs and helped them survive. But when you focus on 2020 and 2021, you will see that the number of personal loan borrowers has increased.
The world will look very different than it did before the pandemic. For a secure and relaxed financial future, and should never ignore the personal finance lessons we learned during the pandemic.