The COVID-19 pandemic, as the World Health Organization calls it now, is a tough wake-up call on how things can quickly change. The rapid escalation of this threat has not only caused damaging effects on people’s health but also on our finances.
Just last week, it was a distant problem. Today, not anymore.
It’s evident as countries shut down their borders, stock markets came plummeting, and everyday life is further disrupted and grappled with fear and anxiety.
Certainly, as different governments issue temporary lockdowns, we can’t help but think about the financial implication of this coronavirus. I tell you; it’s going to be HUGE! But I won’t know for sure who is going to bear the brunt.
Events will be canceled, select shops will be closed, working hours will be cut short, and business negotiations will be called off. Big businesses may weather this storm, but how about small businesses? Will they survive should this pandemic last for months or even a year?
I’m not here to sow panic and add to your financial woes. It’s difficult for me to write this blog, as I, too, will be greatly affected by this recent turn of events.
I definitely include my clients’ small businesses in my prayers, hoping they can pull through until the end of the COVID-19 global health issue. If they close, I’ll be out of work and I’ll be out of income for a while. God, forbid!
If this happens to anyone who is unprepared for this possibility, that would be a nightmare!
This is where having an emergency fund comes in handy. Those who have built their emergency savings have a higher chance to endure it all. If you’ll be out of a job for a while, an emergency fund could be your lifeline.
Unfortunately, a distressing number of people have insufficient emergency funds. Many people these days simply throw caution to the wind when it comes to saving for the rainy days.
“The number-one financial regret among Americans tends to be the failure to save for emergencies and for retirement,” said Mark Hamrick, senior economic analyst at Bankrate. “This is a time when both of those objectives are quite relevant.”
When we think about emergency situations, it’s easy for us to imagine using it only for car repairs, ER visits, and layoffs. We don’t usually think about global health crises like COVID-19 and city-wide shutdowns. It only goes to show that financial distresses can take on many forms. Hence, we must always be prepared.
In Southeast Asia, potential pandemics and increasing natural disasters make it even more important for people to build an emergency fund that can cushion income loss and unexpected expenses.
If you don’t have an emergency fund stock up, don’t panic. You budget your finances to the best of your ability so you can stretch it long enough to ride out this storm. Scale back on your spending and make the most of everything you have at home to save money. SSS and GSIS members can even seek financial assistance from these government branches should the going gets tough.
I understand how hard it is for many families to save. But recent events are just another reminder of how vital it is to have an emergency fund.
Ideally, you need to build three to six months of expenses in your savings account. If you’re the only breadwinner in the family, you should build bigger than that. Start small. Build a foundation today, you’ll never know when the next economic recession will hit because of the COVID-19 outbreak.
To learn more about how to build an emergency fund, read this article I wrote: Emergency Fund: The Ultimate Guide to Saving for it Now!
If this goes on for long, soon enough people may go broke and small businesses may go bankrupt. That is something we don’t want to see or experience, but should be something we have to be truly prepared for.