8 Financial Lessons Learned During The Pandemic

“The meaning of intelligence is the ability to change.”

Albert Einstein

According to studies, it takes 21 to 66 days on average to change your habits in regular times. As a result of the pandemic, which continues, we needed to change our lifestyles. To stay healthy, we made significant concessions. Lockdowns required masks, social distancing, and grocery shortages. As a result, it led to an economic downturn with massive unemployment. This became our new norm.

We formed new habits and learned many lessons with financial implications to cope with COVID-19. Optimism is in the air as potential vaccines may provide a path to resuming our lives. Still, the pandemic has left an indelible mark on all of us in a variety of ways.

If we can point to a silver lining from the pandemic, several surveys have consistently pointed to the following trends that show people are:

  • saving more money.
  • spending less.
  • reevaluating their priorities.

If these are permanent changes, they are good financial habits and favorable outcomes for Americans—improved financial literacy yields long-term benefits.

Saving More

The US Personal Savings rate–the percentage of people’s disposal income after taxes and spending–exhibited substantial rises during the pandemic. From 7.2% at the end of 2019, this savings rate peaked at 33.6% in April 2020, before settling down to a still-high 14.3% level in September.

A Harris Poll and CIT Bank reflected a strong disposition towards saving more money during the pandemic. This study showed 53% of consumers (including unemployed) saved more than they typically do in the last 3 months.

As a result of the pandemic, many consumers plan to continue to save more and spend less on nonessential items (egNerdWallet, The Harris Poll). Whether this a permanent shift in priorities or a hopeful aspiration remains to be seen post-pandemic.

Less Spending

According to a recent Bank of America survey, roughly two-thirds of Americans say their spending habits have changed since the start of the pandemic. Respondents pointed to reduced costs from commuting, dining out, paused gym memberships, and vacation travel.

While these costs decreased as many people stayed home, working or otherwise, other spending increased. Most notably, we spent more on online shopping, especially for groceries, higher pet expenses as families adopted more pets, and online education courses. Grocery spending was up 54% from panic buying in March compared to February.

People also formed some bad habits–overeating, too much alcohol, and a lot more binge-watching as “too many subscriptions” with new streaming services were readily available.

Reevaluating Priorities

More people participated in the market, putting more of their money into stocks after the sharp decline in March. TD Ameritrade reports that they had more visits to its website by people wanting to learn how to do day trading. Robinhood, a fintech company with an advanced trading platform, has reported that it scaled up to 13 million accounts by early October.

Day trading can be dangerous for new and inexperienced investors in volatile markets. My preference is for people to learn how to invest for the long term.

The need for saving money for emergencies became a far greater priority.

Frugality, an admired trait for some people, became more accepted. Two in three Americans report in a Slickdeals survey that the pandemic has turned them into frugal persons. Being called frugal is a compliment to many. Let’s value our collective experiences and pack them into financial lessons we learned during the pandemic.

Financial Lessons Learned During The Pandemic



1. An Emergency Fund Is Vital

The mantra of having an emergency fund to pay for your living essentials became more apparent during these times. The amount to save for this fund is less obvious. As a rule of thumb, common recommendations start with saving of $1,000 or having a goal of establishing a fund to pay for 3-to-6 months of living expenses.  Dave Ramsey calls for 3-6 months funds. Suze Orman has recommended having 8 months of savings for your living expenses.

I admire these leaders in the money management space but for this event at least that may not be enough. For many, the pandemic caused high medical and other costs AND high unemployment. Savings of 6-8 months may just a starting point and a national average.

Set Aside More Savings If You Are In A High-Cost Area

Remember that there is a significant portion of our country who live in high-cost cities like NYC and San Francisco. Lose your job there and you are still paying high-cost rent. That’s the problem with the rule of thumb. You may get the tip bitten off.

The Lesson

When determining how much to save, consider your economics and family situation.  Many learned this year that a more significant amount of savings is needed when something as unpredictable as coronavirus rolls in, dramatically hurting our economy. To better protect yourself, coverage of a year of your basic living needs will allow you to sleep better at night. Sleeping well is a better rule of thumb.

Aim high, so you don’t feel low. Reduce some of your spendings on non-essentials so you can have an abundance of financial flexibility when times are difficult.

Invest Your Emergency Funds In A Liquid And Accessible Account

Your emergency money should be in a separate account where it is safe and accessible for liquidity purposes. Such a place may be a high yield saving account or a money market deposit account, both of which are FDIC-insured.  Check whether rules limit your ability to withdraw money. While you won’t earn much in the way of income now in our low yield environment, liquidity to cash-equivalents is virtually king. Here are some other places you invest your emergency fund.

2. Investing In Stocks For The Long Term

Triggered by the reality of COVID 19, the S&P 500 index sharply declined 33.9% from February 19 peak to its bottom on March 23. This decline ended the long bull market from the 2009 recovery. Many investors, fearful of this breathtaking decline, sold their stocks into the market weakness. Even the normally optimistic investment guru Warren Buffett, was selling more stocks than actively buying in March, according to his 13F filing.

Sure, it was difficult not to be tempted to sell stocks, especially if you lost a job or lacked liquidity. I felt enormous pressure to stay the course and not sell as stocks went to the bottom.

The market’s bottom is only clear in hindsight.  I held on to my stock positions with some difficulty by having faith in my experience and listening to market experts I respect. Was I worried at all? Only a liar would say no. Having a long-term horizon that is shorter than those in their 20s and 30s means I am closer to retirement now than I was in the Great Recession. However, I sold my stocks closer to the 2009 bottom, a costly lesson I keep close to me now.

The Lesson: Don’t Sell Stocks Out Of Panic

Here’s the lesson: in my newbie years as an investor, many times, I actively sold a lot of my stocks and went over to the sidelines. There, I would watch good stocks recover over time.

Don’t sell stocks out of panic. Markets come back in time. Indeed, the S&P 500 index is up nearly 57% since its bottom, registering an 8.6% gain year-to-date. Few predicted the March collapse or the rapid stock market recovery in 2020. How did it happen? It took a little bit of luck, recovering corporate earnings, stimulus money, and, most of all, aggressive action by the Powell-led Fed all contributed to stimulating the economy and the markets.

Don’t Be Greedy

Keep a long-term perspective while maintaining diversification in your portfolio. Determine whether you have too much or too little risk for your tolerance and lifestyle. I trim stocks that have done well. I do this sell a bit as certain stocks have grown 20-25% or are too large compared to my total stock portfolio.

There is nothing wrong with selling part of your stock position into cash. Instead, it is opportunistic and financially disciplined. It helps you to avoid being greedy.  As the old Wall Street saying goes, “Bulls make money, bears make money, pigs get slaughtered.”

3. Working Remotely Became A Bigger Benefit

Before the pandemic, remote working was trending upwards in many organizations as an extension of telecommuting. However, many companies, indeed, whole industries (eg. investment banks, brokerage firms), that did not believe in the virtues of remote working were forced to consider this as a viable option.

Many companies have successfully switched to long term remote work. For many employees who kept their jobs during the pandemic, this is a meaningful perk in company benefit plans in the future.

This is a grave lesson for employees who were furloughed or laid off because of jobs that weren’t as amenable to remote work or lacked skills to do so.  Remote working jobs will remain in demand. Employees will want to equip themselves for such jobs by learning skills to allow them to do so.

As many employers took this route, allowing their people to work remotely, many credit the impact of COVID-19 for their accomplishments.

Achievement highlights show:

  • 15%-40% in increased productivity;
  • 10%-15% less turnover;
  • 40% reduction in absenteeism; and,
  • 20%+ potential cost reduction in real estate and resource usage.

Sources: Forbes, Global Workplace Analytics; BCG Analytics.

The Downside of Working Remotely

Remote working is not without its downsides. Not everyone liked working remotely, missing the interaction, collaboration, and socialization of the work environment. New employees, in particular,  may find it challenging to learn their way around the company when working remotely.

To counter that feeling of being lost, employees may need to assert themselves with their colleagues and managers with active participation. Take more initiative as you gain more confidence at the new firm. It is also the responsibility of companies and more experienced employees to establish ways to build a virtual bridge and integrate new employees. Mentoring programs may be the best way to do this with frequent check-ins.

When in need of guidance, new and young employees should be encouraged to ask potential mentors who are readily available.  As the new people on the block, frequent zoom communications should allow them to ask what skills they should add, and offer to help others.

Related Post: Remote Working As The New Normal: Advantages And Disadvantages

The Lesson

Remote working is a trend likely to stay. It provides cost benefits to both employers and employees. The opportunity to work from home is increasing. If this is a desirable benefit for you, make it a priority in your training and how you choose your job.

4. Telemedicine Became More Essential

The telemedicine industry was growing before the pandemic. However, as the government called for widespread lockdowns,  telemedicine’s need became essential for the medical field to adapt quickly. Physicians wanted to remain engaged with their patients during COVID though not every medical office was set up to implement the practice.

Big Technology Needs

Many physicians, who may have scorned the movement to provide remote medical care, took steps to implement telemedicine. To a great extent, the complexities–technology, regulatory, legal, and patient acceptance-are greater for physicians to do so.

A certain level of advanced technology is needed to provide real-time audio-video two-way communications.  Physicians want to be able to smoothly connect from their offices with their patients living in diverse locations. Many were in different places than their homes, as COVID may have hampered people’s ability to travel home from vacations or visiting family. Conversations are not enough when there are serious or chronic ailments requiring remote monitoring or MRIs.

For Example

I needed a particular recording device for monitoring my heart after an ablation procedure. To gauge its success, my cardiologist sent a special monitor to record my heart rhythms for about 10 days which I then sent back for his analysis. Fortunately, tracking reflected good results. Was it ideal? No, but it was better than waiting for the pandemic to disappear.

I didn’t need medical images or other care. However, telemedicine is not suitable for patients in need of urgent care requiring in-person attention.


Legal And Regulatory Compliance

Besides technology, the healthcare field requires compliance with a range of strict HIPAA privacy, insurance, and other guidelines while COVID poses threats for in-person diagnosis and treatment.

States granted temporary licensing waivers as emergency needs persisted and telemedicine became widespread during COVID. Existing telemedicine providers, like the publicly traded Teladoc, a major telemedicine provider, has had a jumpstart in treating non-emergency medical problems. It is already in compliance with relevant state, national, and international laws and regulations, including HIPAA.

The Lesson

As patience acceptance grows and there is strict compliance, telemedicine is likely to continue to grow for a garden variety of non-emergency ailments. However, the practice of distance medicine can not fully replace the “hands-on” attention for emergency needs even with the use of robotics and other technologies. Telemedicine is valuable as an interim measure or for regular visits.

5. Online Learning

Back in March, as the spread of the coronavirus caused lockdowns, schools across the country adopted remote learning measures in a hurry. For the most part, people–students, parents, teachers, and administrators–adapted as well as possible. This Fall, schools, colleges, and universities modified classed into an in-person, hybrid, and fully online model. As COVID cases increased in schools, colleges, and universities, there was a greater shift to online teaching.

The jury is out as to the success of remote learning in K-12 grades, colleges, and universities. The younger your child is, the more essential in-person learning is for instruction, emotion, and socialization benefits in order for them to thrive in our society.

Public education is the best way to raise responsible citizens, forge a common culture among our diverse population. That was constitutionally accepted after the Brown vs Board of Education.1954   Until then, public education was unequal for blacks who were discriminated against by having to go out of their neighborhoods to separate schools.

Lack Of Broadband Internet For Some

With hybrid or fully online education in place for most communities in the US since March 2020, we have learned of the disparity of broadband Internet technology. Those who reside in rural or poor neighborhoods do not have the same high-speed Internet facilities as urban areas. There has to be a level playing field for education. We must build the high-speed data transmission facilities needed for teaching.

As a replacement for in-person learning, there is a recognition that remote learning is not an equal replacement. Even Sal Khan, the founder of Khan Academy, admitted that distance learning is a less than perfect substitute for in-person schooling.

The Lesson

Distance learning is not a replacement for the classroom. Improvements should be made so remote learning works as an option for many people who have subscribed to online classes before the pandemic. As an educator myself, I am hyper-sensitive to the challenges of my students who may be sharing laptops with another family member or simply enjoy being in a class with their peers.

6. The Benefits Of Lifelong Learning

My mother always told my brother and me, “So long as you are able to learn something and can read a book, you will never be lost or bored.” It sounds corny, but my mom was right. We were never allowed to say we were bored when we couldn’t find something to do. We didn’t grow up with the Wide World of the Web (www or the  Internet) like the Gen Z digital natives. Somehow, I was able to entertain myself pretty well.

My love of reading and learning came in real handy as we were in lockdown at home. The way we read and learn may be different but once an appreciation, always one now. Sure, I was distracted by the news, little binge-watching, and too many visits to certain apps on my phone (Candy Crush, if you are wondering).

Expand Your Skills

Many people turned to pick up new or expand skills to improve their work profile or pleasure during the pandemic. People learned new languages, AI, machine learning, robotics,  how to excel on DIY projects, do exercises, experiment with cooking, and Zumba dances remotely with streaming classes of all sorts.

In a recent Gartner analysis, only 16% of new hires possess the skills needed for their current and future jobs. They found existing roles may require up to 10 new skills by 2021. That’s a lot of learning to do. Companies can accelerate training for their employees.

The Lesson

Learning skills can make your job more secure, help you earn more, and position you as a more attractive candidate to other organizations.  Take the initiative to look into where you do some of this training on your own. Learn and update your knowledge in your field so you can be a more valuable employee now and in the future.  Expanding your knowledge in areas of interest adds new dimensions to you as an employee and to your life.

Related Post: The Benefits of Lifelong Learning With No Downsides

7. More Family Time To Talk

Family time with two teens at home can be quite emotional. It doesn’t help that we also have a new puppy in our home. Hormones are raging like a “tempest in a teapot.” That said, I have had some of my best conversations with both kids or individually, learning about their interests, academics, and their good friends.

My daughter, Alex is a planner. She is organized, loves criminal forensics, enjoys working, and is very interested in diverse topics. As an avid reader of this blog and others, she is interested in learning how to handle money better and learn how to earn interest. My son, Tyler, is interested in cash usually borrows from Alex without paying her back.

The Lesson

Jokes aside, we have increased our discussions with our finances, stock market, and skill-building during this time. I have learned from their viewpoints. They are both young adults who remind me every day how hard this pandemic has been on them. It is hard not going to school with their friends, playing sports, and socializing like typical teens.

8. We Owe A Debt A Gratitude


Be Thankful For Your Job

Being grateful for what you have and to others provides good feelings all around. You are fortunate if you kept your job unscathed by reduced hours. By May 2020, 20.5 million were unemployed, an increase of 14 million people since February. This is a higher level than in the Great Recession.

Yes, there were higher unemployment checks and stimulus money at the start. That helped many a temporary relief. But it is stressful to be dependent on government aid held up by political maneuvers.

Health Care Workers And Many Others

During the pandemic, it was hard not to be touched by essential and non-essential workers who were in harm’s way when doing their jobs. Those efforts continue while the pandemic is still rising in the number of cases, hospitalizations, and death. So many people are working tirelessly behind the scenes in stressful jobs. Healthcare works became visible but what about security guards, food servers, janitors, transportation workers, and many more?

We may have passed these people in the past without thinking about them. I am grateful for their help and for being there for us. Thank them more often.

Family And Friends

COVID exposed a lot of vulnerabilities in our society. Our elderly population, black communities, and those with pre-existing conditions paid a higher price, many the ultimate and others who are chronically suffering from having the coronavirus.

Cancer patients had difficulties getting the essential treatments they needed. We lost two cousins and a dear friend. They may still be with us, if not for.. Not a typo but I just can’t finish that thought that is in common with so many people.

Related Post: Gratitude Can Help Your Finances


Final Thoughts

The tragic coronavirus pandemic has affected us all. We were forced to change our lives dramatically to cope with the dangers of the virus. Some trends are emerging that have provided some favorable outcomes. We addressed 8 financial lessons learned during the pandemic. Each financial lesson offers benefits that may help us earn and save more, spend less, invest for the long term, and help us enjoy our lives more.

Thank you for reading! Stay healthy! If you found some value in this post, can we ask you to share it with someone? Consider joining by subscribing to The Cents of Money and getting some freebies and our weekly newsletter.




4 thoughts on “8 Financial Lessons Learned During The Pandemic”

  1. A great summary, thanks for sharing!
    I especially appreciate the comments about emergency reserves. I know Dave Ramsey has been saying a $1k starter emergency fund is sufficient while getting out of debt, but he hasn’t changed that number in 30 years. Inflation is doing its thing, and so I agree: $1k is enough even for a starter emergency fund. Better to take your cost of living into account and choose a number that will let you sleep at night.

    • Hi Jay,

      How much to save is a personal decision based on your living expenses, lifestyle, and comfort level. I agree with you that more savings is better. It is certainly harder to save when you lose your job. Savings should come ahead of that. Hope you had a good holiday!

  2. CODI was black swan type event. But it did expose the fault lines in our society. Maybe people were living month-to-month is true. But many companies had taken cost cutting to an extreme and had fragile supply lines. This all came out as everyone learned lessons.

    • Very true. I am afraid that more layoffs may be on the way, making it more difficult for many people. Hope you had a good holiday!


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