What is the impact of the coronavirus on personal finance? This guide explains how the coming recession could affect you and your family.
Before 2020, there was only one way a health issue could threaten your personal finances: falling sick.
Today, you don’t have to get seriously ill for your personal finances to be affected. The COVID-19 crisis is not only throwing the world into uncertain economic times but also ruining people’s personal finances.
If you’re wondering, “what is the impact of the Coronavirus on people’s finances,” you’ve come to the right place.
Continue reading for a deeper insight.
COVID-19 and the Economy
To understand how the coronavirus is ruining the finances of millions of Americans, you have to start by understanding how it’s affecting the country’s economy.
Unless you live under a rock, you know that most parts of the country are under lockdown. People are working from home. Businesses that don’t offer essential services are closing down, albeit temporarily.
If you’re an employee of a business that has halted operations, you’re very lucky if you’re earning your full salary. Millions of working-class Americans have been put on unpaid leave and others have lost jobs.
Being jobless means you’ve got no primary income. Without any income, you’ve to dig into your savings to settle utility bills and feed yourself and your loved ones. Clearly, this isn’t the kind of rainy day you were saving for.
But what if you’re like the 58 percent of Americans who have less than $1,000 in savings? You will blaze through whatever little amount you have saved up in a matter of days.
If you’ve not been severely affected by the crisis, now is the time to be cautious about your personal finances. Stay home as much as you can and spend as little as possible. You can take some inspiration from Prabir Purohit, a financial executive who’s using this time to focus on family.
Business Owners Feeling the Pressure
It’s not just employees who are feeling the financial heat of COVID-19.
If you own a business, especially a small one, there’s a good chance you’re experiencing a revenue slump, unless you sell an essential product or service.
Even though there are steps you can take, such as laying off some of your workers, to protect your business, as the crisis persists, you’ll start feeling financial pain. When your business isn’t making money or turning a good profit, you won’t be able to pay yourself adequately.
Being a COVID-19 Patient
We are all taking steps to protect ourselves from contracting coronavirus. However, not everyone will evade the virus. With daily infections reaching thousands across the country, no one is safe.
If you, unfortunately, get diagnosed with COVID-19, your personal finances are going to bear the brunt of the disease, especially if you don’t have adequate health insurance. Emerging reports are showing COVID-19 can cost over $30,000, so things won’t be rosy for your finances if you have to pay such an amount out of pocket.
What Is the Impact of COVID-19 on Personal Finance? Now You Know!
If you were asking, “What is the impact of COVID-19 on personal finances?” you now have a clear picture of what’s happening. Millions of people in the United States and beyond are suddenly facing financial uncertainty because of a virus that’s not only taking lives but also shutting down the economy.
All the best and keep reading our blog for more informative tips and insights.