The world is no longer the same in the aftermath of the COVID-19 crisis. From the devastating health hazards to the financial crisis covid has impacted our lives in several ways. The economic crisis has led to massive layoffs and pay cuts in the entire nation. All this has taught us several personal finance lessons which should not be ignored in the future. Let’s take a look.
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 this 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 us the lesson that there is no need to visit our bank branch as most of the banking things can be done online.
Importance of savings
Savings is something which is even taught by our parents in childhood, but some ignore this and live in 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 should be practised on a monthly basis. 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 the duration of coverage.
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
During this pandemic, we noticed there was a sharp cut in the spending habits of people. This was because people were packed in houses and hence they were not able to go out for shopping, dining, movie, etc. But, all this has brought a serious 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 a lot of money. The money saved can later be used for investment and can 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 availing the loan is genuine or not. But when you focus just on 2020 and 2021 you will see that the number of personal loan borrowers has increased. This is because in the financial crisis when people were dealing with layoffs and pay cuts, personal loans and credit cards were the only saviours for them. Availing personal loans and using money from the credit card not only helped people to meet their medical needs but also helped them survive.
The world is going to look very different than it did before the pandemic. For a secure and relaxed financial future, the personal finance lessons which we learned during the pandemic should never be ignored.