While the Covid-19 outbreak caught the globe by storm, one of the most significant lessons learned was the need to properly plan and manage finances to ensure a secure future for both businesses and individuals.
The pandemic got many businesses and individuals unprepared which caused the laying off of employees and taking unprecedented measures affecting the most vulnerable in the society, however, all is not lost as there are lessons we can pick from the pandemic when it comes to finances.
For instance, it has come clear that having a plan is of utmost importance. Income, expenses, savings, investments, and credit need to be aligned to the family’s short-term and long-term needs, wants, and life goals. Having a clear plan that covers unprecedented times is of importance to actively implement when needed.
The Other thing is having life and health insurance at all times for when tough times come in. The pandemic has shown that it is essential to secure oneself and the family. However, with over 70% of the Kenyan workforce working in the informal sector, the majority are either not eligible or cannot be able to afford the premiums set by the government to maintain health insurance provision. The government needs to conduct strategic advocacy campaigns targeted at educating Kenyans on the importance of insurance.
The financial lesson that can also be learned is diversifying investment across different asset classes. This will help keep finances flowing when an incident such as the Covid-19 occurs, these investments can cover, real estate, business, FMCG, etc.
Avoiding the debt trap is also something to note, depts not only harm financial planning but also have a negative impact when a crisis arises, this becomes a liability making it hard to survive during the needed times. One should pay debts when able.
Something that the majority of individuals need to learn is that it does not take much for one to be happy, and they need to work on having healthy spending habits. Healthy spending habits not only ensure financial prosperity but also contributes to mental and emotional well-being.
To summarize, financial discipline and prudence are essential to navigate the ups and downs of life. This epidemic will pass in a flash, but if we can absorb, assimilate, and apply the lessons learned from it, we will be prepared for the next time hardship comes.