On this episode of How To Money, Matt and Joel look back at 2020 to see what money lessons the Covid pandemic and lockdowns taught us. So many aspects of life were given new scrutiny during the height of the pandemic: Companies realized that employees having more flexibility about when or where they worked didn’t bring their businesses to a crashing halt; families adjusted their home spaces; plenty of people made big money moves like purchasing a home, moving to a cheaper city or part of town, getting rid of second cars, or moving into an entirely new career. What lessons should we keep with us as we move closer to pre-pandemic life?
The guys often say everyone’s very first money priority should be at least $2,467 in the bank for emergencies, and when possible, a fully funded emergency fund of three to six months worth of expenses. Covid certainly brought home the importance of having cash on hand when millions of Americans were laid off or furloughed. Diversifying our income, too, was a big lesson; no industry is bulletproof, and if it’s possible to find multiple streams of income instead of relying on one source, you’re more likely to make it through the hard times. Many Americans were alarmed by the initial dips in the stock market, but downturns should be expected in the life of any investor. If you had to make significant changes to your portfolio because of the pandemic, it’s possible you weren’t investing right in the first place. A written investment plan that can get you through the good and the tough times – without needing much attention from us – is what we should all be shooting for.
But perhaps the biggest lesson we should take with us is that we have more control over our spending, saving, and earning behaviors than we thought. Even though unemployment was rampant, Americans paid off a lot of credit card debt and saved more money than ever before. Covid forced some drastic changes on us, keeping us from taking trips, eating high-dollar restaurant meals, using expensive gym memberships, and so on – could any of those shifts become permanent, so the savings last too? Are there other, similar changes we can make that, pre-pandemic, we thought were impossible? It’s never been a better time to find out. Hear more about how Covid has changed our money habits, and what we can keep up for the future, on this episode of How To Money.
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