PERSONAL FINANCE LESSONS FROM THE CORONA VIRUS PANDEMIC

The Corona Virus Disease (COVID-19) pandemic is getting worse day by day. What some people took for granted is starting to sink in as a dark reality. If you are one of those who thought that this was an issue for the Chinese alone, I guess that perspective has changed by now. Everyone across the world has been affected in some way or the other with worse effects expected sooner than later.

While this was initially seen as just a public health crisis, the tables have turned, and economies are facing it rough thus an economic crisis. Businesses are crumbling and so are the financial markets. You may want to look up how it has affected Wall Street. As a result, companies are crumbling, and many will not survive the tide. What does this imply to the individuals employed by these companies? Jobs are being lost and sources of income shattered. Despite this, prices of essential commodities are going up day and night mainly because of the restrictions in cross border trade. With these circumstances, it does not require you to be an expert to know that many people will find a hard time surviving through the crisis especially if you have been struggling with personal finances or did not have a stable emergency fund.

Given the circumstances, it is quite an important time for us to reflect on the key personal finance lessons that we pick from this situation. I have taken some time to ponder and these are some of the key take aways from the personal finance perspective.

1)     Endeavor to build an emergency fund for hard times: We have always emphasized the need to build an emergency fund throughout our financial literacy sessions. Some people have taken it seriously and done so while others have taken it for granted and focused on satisfaction of their immediate wants. The crisis will define who did the right thing. An emergency fund of three to six months or more is always advisable. How do you stand? How would you survive in the time of a total lock down like some countries have already done? This trying time should get you thinking. Start getting your finances in order and build an emergency fund. It is not yet late because we are not sure how the crisis will unfold especially for some of us on the African continent.

2)     Strive for multiple sources of income: With the pandemic getting worse every other day that passes, everyone is worried about the survival of business and those employed are worried about their jobs. They could be lost soon if the situation does not get better. How would you survive such a situation? Do you have supplementary income other than your day job? If you have been running a small business that depends on universities being open, how will you get through the next one month? It is time to think through the alternative sources of income that you could indulge in. if you have a skill that you could have monetized but haven’t, think through it.

3)     Multi-skill to seize opportunities: While everyone is struggling to get through the pandemic, I know several individuals that are all smiles because of the business opportunities that have come with the pandemic. Three of them make sanitizers and they is reaping big from the increased awareness and need to use hand sanitizers. The other is a graphics designer and he has been approached to constantly create graphical content aimed at sensitizing people through social media. As companies shift to encouraging working from home, digital marketing specialists are going to reap big. Are you positioned to take advantage of these opportunities? What skillsets do you bring on table in such a time?

4)     It’s time to watch your spending habits: As we talk about the importance of an emergency fund in such times, we cannot forget about the importance of practicing frugal money habits. Plan accordingly for the finances that you have and avoid panic and impulse purchases. You may live to regret poor spending habits by the time the crisis ends if you don’t watch them. Practice frugality because no one is sure how long the pandemic will be around.

5)     Life Insurance is not expensive as many perceive it. Everyone is anxious about the deadly COVID-19. The fact is many are people are dying and it makes matters worse if you are the bread winner and you catch the virus. The worries about the people that you will potentially leave behind can get you closer to your deathbed. However, insurance gives you a peace of mind and assurance that all is well. With the right policy, you may also be assured of retrenchment cover if you lose your job as a result of the pandemic. The cover can take you through the hard times as you source for the next job or earning opportunity.

Thank you for going through the lessons. I hope you take time to stop and reflect. It is never too late to learn a lesson and apply it. Let’s remain financially literate so that we can get through the hard times without hurting our finances. Finally, remember to practice the measures announced by the World Health Organisation and the Ministry of Health to keep safe from the virus. The measures are as good as you apply them. It starts with you.

Darious Nkwasibwe

Financial Literacy Enthusiast and Trainer

[email protected]

+256781819477