More about lessons learned … or not

Like nothing in the memory of most Americans, Covid has changed their lives. The illness and all the related affects are bad enough, but then there is the confinement, the loneliness even depression as a result.

Many Americans have lost their income, had work hours or pay reduced, their benefits reduced. Some small businesses will not survive. Even some large corporations will feel the negative affects for years which may translate into losses for their shareholders. States which have seen a decline in revenue will be forced to cut services, raise taxes and borrow more creating a compounding affect on their citizens. Even federal programs such as Social Security have reduced income.

So, what are the lessons for average Americans?

  • Living for today is risky
  • The standard advice to have a 3-6 month emergency fund is sound advice
  • There are many ways to save for the future without limiting the present
  • Spending is a variable to be managed and we need to view it that way
  • Minimizing debt at all times is important and especially during times of financial stress
  • Income and spending are equal parts of the standard of living equation.

One comment

  1. I can send you a picture of the poster child of what not to do, my son-in-law, who works in a casino.
    Pandemic hits and he gets furloughed. Collects the extra unemployment money. After several months, his casino is sold and he is laid off and now the extra unemployment money is runs out. Finds a new job at another casino in October. Second round of covid hits and closes that casino.
    How much money did he save sitting at home all this time when he was making more money to stay home than to work? None. Spent all his money building a fancy computer, playing online games, and gambling online. Nobody has any idea when the casinos or the hospitality industries will fully reopen. He didn’t save any of the money for next week let alone for 6 months. Not too smart. It is not like he doesn’t know what will happen living through round one during the summer. But his family got by and he doesn’t change a thing for round two. The government will provide.

    Like

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