3 money lessons to take from COVID-19

3 money lessons to take from COVID-19

Vanessa Stoykov

There are many things we are all having to relearn during this pandemic. While it was certainly challenging to begin with, it seems as time rolls on, and Australia seems to be successfully combating the spread of COVID19, more people are learning very positive lessons about life, business and money from this environment.

Here are three that I see as key lessons that have appeared very early on, as the world is gripped with lockdown.

Number 1: cash is king

Whether as a business or an individual, the big lesson is that it is crucial  to have cash at hand. The liquidity cash gives needs to weather storms for both everyday life and business. The bigger reserves you have, the more confident you can be about your future, and take the time to look for opportunities to pivot and regain ground once social distancing measures are over. At least six months of savings to cover expenses is a necessity in the new world order.

Number 2: Debt can take you down

When things are going well, as they have been in our economy for well over 20 years, it is easy to see debt, with low interest rates, as a key part of building wealth and getting what you want.

Many investment property holders have been left in a difficult position as a consequence of the pandemic, with their income slowing or stopping, but their debt still needing to be serviced. While not all debt is bad, the lesson from the pandemic is to keep light – the lighter the financial load you have to carry, the easier it is to survive.

Number 3: We can all live with less

While at first it was almost maddening to slow down and not go on holidays, work trips and shows/concerts and theatre, it has now become obvious that not only can we survive without spending and doing as much, we can also save money and spend on what’s necessary, not just what is nice to have.

While I am not suggesting a life with no experiences, it is clear that we can all look at consuming less – which helps both our financials, and the planet as a whole.

There is no denying this environment has held many challenges, there have also been some good and valuable lessons, which we should take with us into the future, to be better off in the long run.

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