In 2020, Covid-19 virus began rolling its way through the world. Living our lives, careers, plans, ambitions, and society in shambles. It changed everyday life for all those who survived. In 2021, a second wave hit with even more ferocity than before. America became affected by what felt like an unrelenting force and we saw numerous Covid-19 effects on personal finance. The force had no end to its withering touch over everything within reach.
Its defects are grim casting doubt and uncertainties for the human life some of which include:
1. Retirement Doubts
Many non-retired adults meant to retire in 2021 are already experiencing Covid effects on personal finance. This is because of the covid-19 Pandemic wreaking havoc on personal finance. COVID-19 affected the Sandwich Generation’s retirement plans. 50% of the employed population doubt if they will retire this year. Worse-off, they can no longer afford at least one vacation per year. Some cannot even save a dime each month because of underemployment and escalated bills. The American budget wreaked by the Pandemic and moving from this isn’t guaranteed.
2. Rise in Unemployment
As soon as the Pandemic started, unemployment rates rose as companies began cutting their losses. In two weeks, the informal sector got hit the hardest with an 8.6% jobless rate from 6.7%. Statistics show that the second wave is not letting up. This means we could see even more severe consequences for businesses than what happened last year. It will make for sharper spikes in jobs lost across America’s workforce. Americans’ finances will scale down further. Affording basic needs such as food and clothing may become a real challenge.
3. Inclination towards important spending
Since the full gravity of the Pandemic sunk in, consumer spending took a sharp turn towards stockpiling essentials. People backed away from categories such as public transport and restaurants.
Americans expected the shift to continue with more significant uncertainty. They loomed over consumers’ economic well-being following the Covid-19 vaccine’s release. Things changed.
With decreasing case numbers reported for 2021 and a good number of the population having received vaccines, consumers were spending again on discretionary items that they had previously avoided. This resulted in increased revenues across all industries, including food industry giants.
4. The Rise of Saving and Investing
The economic crisis is a wake-up call for many Americans. Today, more people want to save and invest in the future for unexpected calamities. The pandemic has shown the importance of these things for Americans. Not only them, but we should also all be making an emergency fund equivalent to 6 months’ worth of our salary.
5. The need for multiple incomes
Attached to both unemployment and economic crisis experienced during the pandemic, it dawned to most Americans that you may need more than one source of income. Increasing your income can help you stabilize your finances. Today, our jobs aren’t as stable as once were, so we have to branch out. Turn a hobby into a business, learn a new skill and monetize it, take a part-time job. In short, get another source of income. Active or passive.
Covid-19 has been so devastating to the economy and the people. We cannot allow ourselves to go through this again and ensure to achieve your financial goals. The workforce, mainly those in their late twenties and early thirties should plan better, save more and prepare for eventualities because we have all experienced Covid-19 effects on personal finance.