The current pandemic came like a surprise birthday gift, though an unpleasant one. As a surprise, many nations were not prepared for it, even individuals were not ready. The surprise went way deep to affect the economies of different nations and also affected the finances of individuals in each nation. It is therefore important to ask if these negative impacts could be avoided such that there will be no loss at all and if there was, it would be little.
Loss of revenue or finance is a very painful experience no one wants but the deed is done already, and we cannot dwell on the past but pick lessons from the past to make a bright present and a brighter future. Here are some personal finance lessons you can learn from the COVID-19
– PRECAUTIONARY DEMAND FOR MONEY– Economist defined three reasons why every individual should demand money. They are the transactional motives, Precautionary motive and the Speculative motive. The focus has been given to the transactional demand for money, which is quite reasonable as it means the demand for money for day to day running. A little focus has been given to speculative motive which includes investment in shares, bonds etc. However, the precautionary motive has been neglected by many people. There is a popular quote that says never use your ten fingers to eat. No one knows tomorrow, no one predicted the current pandemic and since No one knows what tomorrow can be, it is important to get prepared for tomorrow financially, in this case. it is very important to note that in budgeting for tomorrow, these three motives cannot be substituted for each other; the pandemic has proven this.
– ONLINE MARKETING IS THE NEW NORMAL
During this pandemic, a lot of business could not stand as their main source of revenue were through physical sales. The pandemic has taught us otherwise. Even schools are seen operating from home with some requesting for school fees. Restaurants make home delivery or take-outs; WhatsApp status is now trending with sales. Sole proprietors and Small and medium enterprises that didn’t incorporate online sales and marketing were hit hard during this pandemic as they had a drop in revenue
- INVEST WISELY– for the speculative demand for money mentioned earlier, investment is great however, the pandemic taught us a lesson which is the diversification of funds. Shares of some companies went down during this pandemic but the revenue or turnover of some companies like Netflix, YouTube and many others increased. If you have enough funds to diversify, never put all your eggs in one basket, invest in other sectors of the economy like the agricultural sector etc. Also, investment in government bonds rather than in shares seems to be more secured
- Entrepreneurship – the pandemic claimed a lot of jobs and source of livelihoods, the pandemic also succeeded in reducing the salary of many workers even as the cost of living is increasing steadily. One important lesson is never to rely on just one source of income. Entrepreneurship has been encouraged right from time and those who took up the advice then were less affected by the pandemic when compared with those without an extra source of income.
- Health is Wealth- Another lesson this pandemic has taught us is to protect our health jealously. The most valuable asset you can ever have is your health. Rest well, take precautionary measures and eat healthy foods to boost your immune system.