Financial Lessons from the COVID Pandemic

I’m not a financial advisor, and I can’t even claim to know much about finances. At the same time, I am interested in being a wise financial steward, and I think that the COVID pandemic has taught us several invaluable financial lessons. As you consider how to steward your resources well, may I suggest the following lessons?

Beware of Debt

We have lived in a culture of abundance for so long, that we don’t take the Bible’s warnings about debt seriously. But we should. COVID reminded us that anyone could lose their job, but the bills will still come due. Living without debt will certainly take hard work, and it might involve losing out on what appear to be exceptional opportunities. But these are minor hardships in light of the peace and stability that come from living without debt.

Small business owners, in particular, should beware of debt. Often, debt seems like a way to invest in the business, bringing even greater return in the future. But as COVID (and previous financial collapses, like the Great Depression) remind us, those who go in debt to speculate on future profit are the hardest hit in financial meltdowns.

Recognize the Instability of Many Careers

If you didn’t realize it already, you are more expendable than you think. Companies are already happy to lay off employees as they pursue new strategies. In times of economic distress, you might be laid off regardless of how much your company wants to keep you. How can you start other streams of income that aren’t totally dependent on your employer?

Play Conservatively

Don’t assume that the financial prosperity that we have enjoyed is always a given. It can evaporate in a moment. The post-WWII era is a unique period, one of the longest stretches of political stability consistent financial growth in world history. There is no guarantee that it will stay this way (and, if history is any indicator, it won’t stay this way). This means that – simply looking at it pragmatically – it’s wise to play conservatively. Have a back-up plan. Pursue multiple streams of income. Be prepared for emergencies (financial or otherwise). Be anti-fragile.

Have a Back-Up Fund

This is true for both individuals and businesses. If possible, have a back-up fund for use in emergencies. Don’t invest everything or live from paycheck to paycheck. Could you survive for a month (or more) without any income? Or would you be forced to close your business or sell your house? I’m not suggesting that you should put your trust in money, or store up riches on earth. I’m simply suggesting that having a back-up fund appears wise in case we deal with financial instability.

All of these are suggestions. For those who are already in difficult financial situations, I’m not saying they are easy to implement. It may take hard work, and for some, these recommendations may be untenable. Still, I think these lessons are obvious. COVID has made them obvious. Not everyone recognizes them, but I think we all should.