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4 Money Lessons from the Coronavirus Pandemic to Take to Heart

Written by
Samantha Rose
Samantha Rose is a personal finance writer covering financial literacy for OppU. Her work focuses on providing hands-on resources for high school and college-age students in addition to their parents and educators.
Read time: 8 min
Updated on July 31, 2023
young man holding his glasses in his hand while reading 4 money lessons from the coronavirus pandemic to take to heart on his laptop
The lessons we’ve learned. How we can use them.

The coronavirus pandemic changed the world. It tipped countries into crisis. It derailed economies and sent the stock market reeling.

These changes came fast and haven’t stopped. They have been met with a response at every level — medical, economic, personal. They have required bravery, ingenuity, and resolve. And as the situation evolves, so too do the solutions. What worked yesterday may not work today. What works today may not work tomorrow. And we still don’t know what insights we’ll discover once it’s all over.

But some lessons have emerged.

Outside of its impact on health, the pandemic has caused deep and widespread financial hardship. It has touched practically every area of personal finance — income, savings, retirement, investments. It has taken a tough toll, but it has also inspired creative solutions.

Here are four money lessons that the pandemic has brought to light. Some can be applied right now. Others should be remembered for the future.

No. 1: A budget prioritizes essentials

Budgets are a standard recommendation from personal finance experts, but during the pandemic’s economic fallout, they’re more important than ever.

Use a budget to create a plan and make ends meet. Start by preparing a list of your expenses. If your income has been affected by the pandemic, look for costs to cut. This might require some hard decisions, but a budget can help you do it.

Separate your expenses into needs and wants. Needs are necessities, such as food and shelter. Wants are nonessentials. They make life more enjoyable, but if push comes to shove, you can do without them.

Be honest with yourself when deciding. It’s easy to become accustomed to a lifestyle, and things like movie subscriptions and new clothes can begin to feel like essentials. But keep them in the “want” category. “Needs” should be true necessities.

Once you create your list, add up all of your needs. These are the costs you will prioritize. If you have money left over, move on to the wants. Those that fit into your budget, you can keep. Those that don’t should be eliminated.

While “need” expenses can’t be eliminated, it’s possible to reduce their cost. For instance, you might typically spend $100 at the grocery store each week. Look for ways to bring that down. Opt for generic brands. Choose budget-friendly whole foods instead of prepared meals that are more expensive.

If you’re having trouble meeting basic needs, you still have options. Borrowers can pause payments on federal student loans without penalty and with a 0% interest rate until September 30. And many people have called for a nationwide emergency rent and eviction moratorium. Some states have taken matters into their own hands, telling landlords to halt evictions — including New York state, Seattle, and San Francisco.

No. 2: An emergency fund is Plan B

No one foresaw the exponential spread of our current global pandemic or its catastrophic impacts on healthcare and the economy. As unemployment rises, wages are reduced, and the economy screeches to a halt, many are suffering without a plan to fall back on.

Setting aside money in an emergency fund for an unexpected financial setback, such as a loss of income, can prepare you to recover more quickly.

Of course, now is a difficult time to do it, especially for those under increasing financial pressures. But it may be an encouraging reminder for the future. Once the U.S. returns to a sense of normalcy, people will piece their lives back together, and an emergency fund can protect them from the unforeseeable.

Financial advisors recommend saving three to six months’ worth of living expenses in an emergency fund. That’s ideal, but any amount helps. The amount also varies depending on a number of factors, such as job stability and expected duration of lost wages.

The less stable your job, the more you should set aside in savings. This includes freelancers and those in high-turnover industries, such as retail, food services, and entertainment.

Here’s how to build a healthy emergency fund in the near-term.

Consider where you will put your emergency fund.

There are two common options: open a traditional savings account or a high-yield savings account.

A traditional savings account is a basic type of bank account. It allows convenient money deposits, transfers, and withdrawals — often from an attached checking or credit card account. Most banks, credit unions, and other financial institutions offer a traditional savings account. The benefit is that most people already have a traditional savings account.

The advantage of a high-yield savings account is that it has a higher interest rate than a traditional savings account. This means an emergency fund started in a high-yield account will return a greater investment in the long run. But the catch is high-yield accounts may not be as easily accessible, or may require longer wait times for a withdrawal.

Revisit your current budget.

The best way to allocate money toward a savings account is to cut costs. Refer to our earlier tips on prioritizing needs and wants. Take a hard look at the categories that were eating your budget before the pandemic. Now is a necessary time to reprioritize. Cut out as many “wants” as possible. During shelter-in-place, it makes sense to cut expenses including transportation, dining out, a gym membership, and certain entertainment. Get creative.

Save your tax refund.

The new deadline for filing and paying taxes is July 15, 2020. If you haven’t received or spent your tax refund yet, plan to deposit a chunk of it into an emergency fund. How much will depend on the refund amount you’re anticipating. But whether it’s $50 or $500 — any amount helps.

Save your stimulus payment.

Amidst rising unemployment, the federal government approved economic relief payments to Americans. Eligible individuals can receive up to a $1,200 stimulus check. Still waiting on your payment? The IRS said it will continue to issue payments through the end of the year. Before you spend all of the aid, plan to save a portion in an emergency fund.

No. 3: The stock market is a roller coaster

Many investors are experiencing their first financial crisis. The Dow and S&P 500 have plummeted, but also shown significant gains.

The greatest takeaway is that the stock market is volatile, and not a guarantee.

According to the experts, there is little that investors can do other than maintain. You can’t time the stock market, and no one saw this coming.

There are generally two days that matter for investors — the day they invest in the stock market and the day they pull their assets. Consider everything in between as white noise. The stock market will go up and down like a roller coaster during this period. Looking long-term, the stock market will recover.

Although it doesn’t feel like it, the world is still operating and moving forward, as best as it can. Here’s how to navigate the current stock market and keep the pandemic’s influence in perspective.

Stay up to date on market commentary.

The best way to understand what is happening with the stock market is to stay informed.

Several brokerage firms are publishing weekly reports during the crisis. Search for the latest reports on market intelligence sites, such as Market Research. The website offers daily reports from top financial publishers all in one place.

Large news sites are publishing valuable coronavirus content. The Wall Street Journal is a great source for trusted information. It features timely business and economic articles, written by leading financial professionals.

Investor-friendly sites, such as MarketWatch, provide detailed information about market tracking and industry news.

Don’t discredit the value of professional advice. If you’re looking for a more personalized approach, now is a good time to find a financial planner. A financial professional follows the latest market happenings and has a wealth of experience to bring to the table.

Use stock charts.

The overwhelming volume of breaking headlines may be disrupting your peace. But a stock chart can keep everything in perspective.

A stock chart is essentially a price chart. It shows a stock’s price over a certain time frame. There are different types of charts, each highlighting different information. One piece of information to watch is the chart period, or the time frame used. Daily forecasts show short-term price movements. This is perfect for those interested in trading their stocks, once prices rise. A monthly or quarterly forecast is better for long-term investors waiting to predict the trends resulting from the coronavirus. They tune out the noise and focus on long-term investment strategies.

Access an online stock chart to track your investments. Nearly every stock-charting service offers a free and paid version. The main benefit to paying for a top-tier account is receiving advanced charting features, such as real-time quotes.

Popular options include:

No. 4: Community support will carry us through

In times of uncertainty, many people turn to community. But that’s hard to do when shelter-in-place orders have limited in-person contact.

One of the more meaningful lessons from the coronavirus pandemic is the importance of community. And communities have stepped up in a big way — for family, friends, neighbors, and local businesses.

Now more than ever, as people are self-isolating they are finding unexpected and creative ways to come together and support one another — from a distance.

A few of the ways people are showing up for their community include:

  • Supporting small, local businesses
  • Creating fundraisers for those in financial need
  • Donating housing or hotel rooms to unsheltered populations
  • Sharing free resources, classes, and lesson plans
  • Checking in on individuals sheltering alone on Zoom
  • Delivering groceries and supplies to the elderly
  • Spending more time at home with loved ones
  • Volunteering at essential nonprofits
  • Holding free virtual performance and concert entertainment

We’re in this together and it’s never been more clear. That’s why many have turned to the digital world to stay connected. In fact, digital connectedness has prompted the creation of the #togetherapart hashtag.

Take a lesson from this forced period of solitude, slowing down, and recuperation. No matter the trials we endure, we don’t have to go it alone. There is a community out there for us.

Bottom line

The coronavirus pandemic didn’t start as a financial crisis, but it has quickly evolved into one. During this difficult period, reflect on the lessons that have emerged to strengthen your finances and make it through.

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