COVID-19 impact: 5 money lessons you must learn from coronavirus crisis

The first four months of 2020 have been tough for all of us and the next few are unlikely to be different. The health crisis has had an adverse effect on economies, with stock markets crashing and companies forced to either cut pay, or even worse, lay off employees. Yet, every adversity is also an opportunity. And, the ongoing coronavirus crisis is no different. It teaches you some important financial lessons which can help in the longer run. 

Here are five money lessons you should learn from coronavirus crisis –

Build an emergency fund

Savings are often underrated. People either spend or invest, leaving a very little amount in their bank accounts. The current situation underlines the importance of a contingency fund or emergency fund. These savings can help you repay EMIs and bills even during the crisis or job loss. You should look to maintain at least six months of salary in your bank account. 

Decide goals before investing

The investment experts keep emphasising the fact that you need to invest as per your goals. Yet, most investors are ignorant about it. Anyone who invested just for the sake of it is likely to panic in the current scenario with markets crashing over the last month. 

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Don't invest in equity for short-term goals

An extension of the previous point. People who invested in equities have lost a lot of money. However, this could have been avoided if you would have aimed for a longer period. People must invest in equities only if their goal is more than 5-6 years away. For short-term goals, use debt funds and bank deposits.

Buy health insurance 

People should not depend only on the health cover provided by the employers. COVID-19 also teaches us the importance of buying the right health insurance which can help you take care of expenses in these tough times You should buy a separate health insurance policy which offers adequate coverage to you and your family.

Build alternate source of income

We often take life for granted and enter comfort zone as soon as things are normal. But, times like these teach the importance of working harder and building an alternate source of income. This can be done through part-time jobs, freelancing, online content creation, renting out property etc.