The pandemic of 2020 did certainly hit the global economy pretty hard, leading to companies shutting down, downsizing, cost cutting, job loss, salaries down spiraling and unbridled unemployment. However, it did also teach us a few things about money. In this article, we’ll see all the lessons one by one.
It’ll be wrong to say that 2020 was a downright whirlwind. It was so much more than that. Covid-19 did so much more damage to the economy and human life that it is widely known now that its effects shall last for 2-3 years more. Even now the number of cases is rising each day, and there is fear of an oil crisis. In India, the cases are rising as well, just like in the rest of the world. While all this won’t go away anytime soon, it has fortunately taught us several things about money.
In times like these, it is more than important to have an emergency fund. Of course, you can’t create such a fund overnight. This needs to be developed over the years. Now, it may have happened that you may have faced financial hardships last year due to the Covid-19. A lot of people faced that. Perhaps you could not have saved up for this time, but now that you know why it is important to have an emergency fund, you may want to save up for the next one, just in case. An emergency fund contains money enough to cover all expenses for 3-6 months.
Before the Covid-19 hit, lots of people paid little attention to having health insurance. Your employer may give you health insurance, but always have your own health insurance and for your family members. That’s because the one given by the company won’t be of much use if you are laid off.
One good thing is that the government of India has developed a very affordable health insurance policy called the Arogya Sanjeevani Health Insurance. You can find these at all insurance companies. The coverage here is from 1 lakh to 5 lakh.
If the Covid-19 taught us one thing, it is that jobs and economies are equally vulnerable in times of global disturbances. If you lose your job, you can’t have your expenses. Sure, you can take loans, but that’ll only pull you further into debt if you don’t have an income source. That’s why it's better to have a secondary income source.
It is smart to invest in them, but not if your goal is nearly. If that’s the case, it is better to take the funds to a safer savings avenue which is not too much dependent on the market.
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