How The Pandemic Affected Our Personal Finances
This is an article ‘How The Pandemic Affected Our Personal Finances’ by Marc Primo
The COVID-19 pandemic has disrupted the world economy in ways we’ve never seen before. With more variants of concern still airborne, people from all walks of life found their finances being significantly affected, particularly 34% of those already in debt who believe that they might not be able to recover from its effects. Fiscal stress, lack of assurance, health challenges, and even mounting cases of crime all contribute to a decline in most people’s financial capabilities. Ensuring that we can rebound from the continuing effects of the pandemic should start now before everything becomes irreversible.
For Americans, focusing on retirement savings remains to be the number one goal. Seventy-nine percent of the population say that their finances have a good chance of recovery by next year. To determine if there are indeed opportunities for healing in the coming year, with the country being closer to herd immunity and the global economy slowly easing back to normalcy, let’s first look at how the pandemic affected our finances since the onset of the pandemic in January 2020.
If you ask anyone on the street today about their top source of stress, around half would probably tell you that money matters take the cake. Right now, 43% of U.S. citizens say they have to deal with money woes daily, while 34% are being affected healthwise due to strains in their finances.
In one study, Millennials have drawn the short end of the straw with rising debts and monthly expenses taking a toll on their wallets, exacerbated by left and right furloughing or unemployment. The Deloitte Millennial Survey reports that the generation’s financial anxiety meter went up 77% last year when the pandemic was at its peak -- and that’s easy to imagine. The outbreak has caused so much of a significant global economic downturn that governments are still struggling to regain a positive gross domestic product despite signs of rebounding all over the world.
While working from home does present the opportunity to save more money, purchasing power among Millennials and Generation Z-ers has reached its lowest. Also, according to the survey, 45% are growing worried about the welfare of their families. According to health experts, this sense of helplessness is the biggest hurdle among today’s young individuals.
The effects of COVID-19 on personal finance
Almost a quarter of Americans are worse off than before the pandemic. Twenty-nine percent of the self-employed believe that their struggles will continue, compared to those who have full-time jobs.
Individuals with graduate degrees say that their finances are better off this year, while a third of those with bachelor’s degrees believe the same. However, most of these hopefuls are those who are debt-free. Forty-two percent of Millennial Americans say they are looking at a bleaker financial outlook next year despite government relief efforts, stimulus checks, and leniency to pay their monthly bills. Still, 30% remain hopeful towards 2022.
In other words, what the country is currently looking at is a high level of stress that further contributes to lower financial outcomes for individuals who feel like the economy continues at a snail’s pace towards recovery.
Accepting the challenges
Fortunately for many, resiliency is strong despite all the stress and instability that 2020 has brought. Almost half of the country remains grateful and happy, believing that freedom from debt after the pandemic is still possible.
As 70% of Americans say they remain in control of their money matters, specific adjustments and habits are necessary to weather the current health and economic crisis. If the Kübler-Ross model places acceptance as the last stage of grief, going on route to financial recovery requires acceptance to be the first step.
Anxiety is born out of not knowing what the future entails. Lifestyle changes are essential in accepting the current crisis, and adjusting your purchasing activities will help prepare you for the worst and reduce panic attacks gradually.
Try to identify your anxiety triggers and regain control of how you feel about your spending. For example, accepting that regular food deliveries can be safer than going out to the supermarket despite being more expensive can help you tweak your financial checklist. Since you get to save from gas or other transport expenses, you can find a way to divert budgets towards more essentials during these difficult times.
Avoid unnecessary risks
Whether rich or poor, worrying about financial matters during the pandemic won’t spare anyone, and taking control over your money can certainly help alleviate depression and confusion.
Of course, mitigating anxiety means you’ll have to avoid taking unnecessary risks and purchases. Unless you have ample disposable income, don’t place all your bets on unsecured loans or erratic investments like the stock market. That’s because no one knows when everyone can recover economically just yet.
Instead, go online and search for communities that help each other earn from unorthodox and essential entrepreneurship.
Solving the crisis as communities
Remember that you’re not the only one struggling, and in the most challenging times, leaning on other people and offering help can lead you to more resources and opportunities to keep yourself or your business afloat.
Learn how to utilize the power of digital technology to make communication, collaboration, and money management work for you, then share your success stories with others to help them. This way, you become part of a collective who understands each other in saving money and can brainstorm about best practices in financial management.
Keeping your mental health in check
Lastly, try to take care of your mental and physical health during these difficult times, as self-care can help you plan your financial strategies. Try to listen to what your mind and body are telling you and learn how to relax when money stress is at its peak.
Taking care of your mental health doesn’t mean you have to enroll in yoga classes or purchase meditation exercises online. The objective is to keep a sound mind which you can achieve by simply breathing correctly, eating healthy food, and exercising whenever you can. These health benefits will surely come in handy when you sit down and deal with your finances.