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.