1. Having an emergency fund

Most people who lost their jobs or their monthly income was impacted because of Covid-19, have realized the importance of having an emergency fund.  These would be anywhere ranging from 3 months of living expenses to 12 months of living expenses depending on the number of earning members and type of source of income.


2. We can save more than we think

We realized that we can save more than before due to a tremendous drop in online and offline expenses. As avenues for spending money were limited to grocery shopping and on essentials, luxury items purchases were kept at bay. The shopping was confined to needs and wants only, resulting in a higher savings rate.


3. Goal-based investment

Hence the most important lesson we all learned that do not invest without a goal in mind. People who exited the stock market in the month of March 2020, have lost a significant amount of money and people who started their investment journey during Covid-19 have made huge profits. However, the new investor needs to realize that the stock market doesn’t go in one direction, and a correction is due sometime in the future. No one can predict that with precision, and hence invest the surpluses with a goal in mind for the exit. The money which you require for your short term needs must be kept in liquid assets. 


4. Investing in learning new skills

As most people had time in their hands, they spent it on learning new skills. People have attended webinars, paid for new courses, listened to podcasts, have taken exams for getting certifications to enhance their knowledge. Even the world-famous investor Warren Buffet mentioned once in an interview with Forbes  ” Nobody can take away what you’ve got in yourself, and everybody has potential they haven’t used yet.”  Many people have started their investment journey in direct equities, without understanding their risk appetite. One must use this opportunity to get rid of junk stocks otherwise a big loss awaits around the corner, without appropriate knowledge.

5. Portfolio diversification

Those who are heavily invested in equities and real estate had faced a lot of liquidity issues during the onset of the Covid-19 crises. Though the equity market has recovered and is hitting fresh highs every day, there is a lot of uncertainty involved. Gold which was supposed to be a dead investment has given historical returns. Portfolio diversification across various asset classes gives a lot of comfort during such stressful times. Investments go through their own cycle – highs and lows, we must be focussed on staying afloat and do not get carried away when the tide has turned.


6. Budget and track expenses

Budgeting and tracking one’s expenses has gained importance, as people had time in hand and have experienced a higher savings rate, they realized that budgeting would help them to keep their finances on track and be better prepared for such uncertainties in the future. People have also gone away with unnecessary expenses that they weren’t mindful of earlier such as unused subscriptions, excessive eating out and parties, entertainments, etc.

Do you agree, would like to know what money lesson you learned during the Covid-19 pandemic