7 Harsh Lessons Learned in Pandemic – And How to Apply Them
The world is slowly recovering from the catastrophe that has been named COVID19. It’s been more than 2 years since it’s stuck in the world. Now that we look back, we notice the pandemic has taught us all some harsh lessons – lessons about life, lessons about being prepared, lessons about making smart choices, and some lessons about finance as well.
In its categorical way, the pandemic has shown us new things about money that we didn’t know before. From income cutbacks to loss of employment and the decimation of retirement savings accounts, its effects are rippling across all of our financial spheres. People are left wondering what to do now?
Well, we know at least one thing. Don’t let these lessons down the drain. Learn from them. Your smartest move right now will be to confront these harsh realities of life head-on. You should take proactive steps to reduce your debt, lower your monthly bills and secure your future. Below are the 7 tough yet valuable life lessons to take from the pandemic.
1. Preparation is the Key
The most important lesson this pandemic has taught us is that preparation is the key. When you are prepared for something, you can face it in a much better way. You can then make smart choices with a cool head without going into panic mode. It’s been pretty obvious before, but we hardly paid attention, right?
Remember when the news about pandemic lockdowns broke and everyone started hoarding toilet papers. Very soon, all the supermarkets got jammed. We ran out of all the toilet paper and other everyday living essentials. Yeah, we should avoid that. It was totally avoidable had we been better prepared for what’s to come.
So, what can you do to prepare yourself financially for the future? Obviously, we don’t know when humanity fully recovers or if we will face a similar pandemic again. But, preparation is the key to better survival. Therefore, you need to start your preparation for any similar event in the future.
Start with building an emergency fund. It can be of cash or any other easily sellable asset that you can tide over. We suggest having rough guidelines of about 6 months of expenses per adult and 3 months of living expenses per kid under ten. Prepare a budget worksheet of your expenses. It will help you determine how much money you may need.
2. Learn the B-word – Budget
Even when financial margins were going tight in 2020, not many of us took concrete action to trim down our monthly bills. For example, when was the last time your checked house or car insurance prices? Of course, there are other things to think about when you wake up in the morning but, it doesn’t necessarily have to be so.
Budget your expenses. Take a close look at what you need and what is merely a luxury you can live without. You can really a little longer between going to the salon for hair coloring. No one will judge you, don’t worry. Similarly, you don’t need to order takeouts every night. Cut down your expenses according to what your budget asks.
Likewise, it comes to insurance, you should shop your options every once in a while. It can save you some serious bucks. For instance, various websites online let you compare car insurance prices of different companies in your area. Just enter your ZIP code and your age. It will show you options – along with discounts.
There are 3 steps to setting up your budget. The first step is identifying how to spend money. Second, evaluate these expenses to check how they fulfill your financial priorities. And the final step is to track your ongoing expenses to ensure that you stay within these budget guidelines. You can use Microsoft Excel or Google’s Spreadsheet to set up your budget.
3. No life Insurance? Go Get one!
Do you ever think about how your family will manage life after you or if you lose your job? How will they pay for the monthly bills or take care of their education throughout their career? More and more people realize this. The interest in life insurance policies has been on the rise throughout this pandemic.
According to one report, US citizens brought approximately 10 percent more life insurance policies in 2020 than they did the previous year. This has been one of the largest increases in 20 years. Many companies even report a double-digit increase in the number of life insurance policies they have sold.
Similarly, for many people, the fear of coronavirus infection and social distancing has stopped them from going to a medical practitioner for an in-person examination. It has led them to go for a no-exam life insurance policy like those offered by companies like Brighthouse, Lincoln TermAccel, and Bestow, among others.
Usually, your application on these platforms takes just a few minutes to process. Their rates are also reasonable, with some options as low as $16 a month. By spending just this little amount, you will have peace of mind knowing that your family will be well taken care of in case of an emergency.
4. Invest, Invest, Invest
In terms of finance, 2020 was a bad year for many of us. The pandemic took a heavy toll on the overall finances. However, some of the people survived the financial crunch. In fact, they made huge profits and actually grew their business. And the secret behind their growth was just one: investing. After all, making investments is one of the best lessons learned in Life.
Let us give you just two examples. At the start of 2020, one share of Amazon stock was trading at $1,900. Within 11 months, at the end of the year, it cost $3,250. Likewise, a share of Tesla costs $90 at the start of 2020. The same stock was trading at $705 near the end of the year. No, that doesn’t mean you cannot invest now.
While the best time for making stock investments was last year, the second-best time is right now. It doesn’t matter if you have a very little amount to spare for the investment. Just make an investment. Once enough people have been vaccinated all over the world, the world economy will open up, heralding a new boom.
There are several online apps you can use to invest. For instance, you must have heard about Robinhood. Yeah, the same Robinhood which was at the forefront of the GameStop. It’s beginner as well as professional friendly. And the reason it is so popular is that there are no commission fees. Plus, you can trade without limits.
5. Monitor Your Credit Score on a regular basis
One financial aspect which took a hit for most people is their credit score. Because of the economic slowdown and loss of jobs, many people were late on their credit card payments. Many others used up almost the entirety of their available credit. Still, others couldn’t make their mortgage or student loan repayments.
While those who were lucky enough to have a federal student loan or mortgage could ask for a delay, not everyone have that facility. All of this led to a lower credit score for many people. But unfortunately, many people don’t keep a record of their scores. As a result, it goes from bad to worse until it’s too late.
Remember, it’s your responsibility to double-check your score and ensure all of your paused student loan or mortgage payments are getting properly reflected on your credit report. If not, it’s only you who suffer the consequences. One excellent way to stay ahead and monitor your credits is through free online credit score websites and apps.
Credit Karma is one such service. It is ideal for knowing your scores and reports in one place. You don’t even need to provide them with a credit card to register. Similarly, Credit Sesame is another such service. It is best for getting personalized tips on the basis of your credit profile and objectives. You can also go for Credit.com if you want to get monthly updates about your profile.
6. Ask For Help — Even If You Don’t Want To
What happens when you find yourself in an unusually dire situation? We try to do something that we normally wouldn’t, right? We raise our hands and ask a professional for help. Sure, most of us would rather do something about the situation rather than ask others for help. But, these are not normal times. We are living through a pandemic, and everyone’s life is a little out of control at the moment.
So, the best strategy today is to ask for help, even if you don’t want to ask for help. For example, if you are struggling to make your monthly mortgage payments, talk to your lender. Tell them about your situation. It’s a good thing that evictions and foreclosures aren’t allowed at the moment. However, you can still face different kinds of penalties or get pushed for collections. Both are undesirable situations, considering the situation.
You will just have to provide them proof that you have been laid off or whatever and need financial assistance to ensure payments in the future. It won’t hurt you in any way to just ask them about what your relief options are and how can you tackle this situation without exacerbating your finances.
Moreover, the same idea can be utilized for all other regular payments. You can use the same strategy to get some relief from house rent to house utilities, cell phone chargers, and car payments. Remember, if you don’t ask a question, you won’t know the answers. So, keep asking questions to reduce your financial burden.
7. Make Career Contingency Plans
Even if your job survived through the pandemic, we recommend getting a career contingency plan. You never know when things go south. Besides, it never hurts to have a side hustle to bring in some extra cash for your savings. Millennials, in particular, suffered the worst, and they are vastly lagging behind other generations in building wealth and navigating the job market.
Today’s gig economy offers a great opportunity to work remotely. You can search through online job portals like Glassdoor, Salary.com, or Payscale. You can also try freelancing platforms like Fiverr, Upwork, and Freelancer.com. Reflect back on your experience and what jobs can you perform, and then explore online listings & job advertisements.
Just make sure your LinkedIn profile and resume are up to date. You can also Google your prospective employer in detail before sending them your tailored resume. Read what they need most and list out those skills most prominently which you think can benefit their current open positions.
Your online presence can be incredibly helpful in bringing you prospective clients and jobs. Start by sharing your thoughts on different aspects of your niche and particularly its leadership on various social media platforms. You can also go for virtual seminars, conferences, and meets that feature speakers from companies you are interested in getting a job in. That’s an excellent way to network without leaving the confines of your home.
Ultimately, everything boils down to only one piece of advice: pay attention. If you are paying attention to everything that’s happening around you, you can prepare in advance. If you pay attention to how much you are spending and how much you are earning, you can make a better budget. Similarly, if you are paying attention, you can make a career contingency plan, get insurance, invest in better prospects and regularly monitor your credit profile.
All of these pieces of advice work together to give you a much better grip on your money. Therefore, you won’t ever find yourself in a situation where you don’t have the finances to live a better life. While these are general life lessons, everyone should know, the pandemic really put a spotlight on their necessity. You can apply these important life lessons at any time, but hopefully, if we ever face such a situation again, we will be better prepared, at least.
That’s all for now, thank you for reading and staying with us. Have a great day, and don’t forget to share your thoughts in the comment section below. Adios!