The COVID-19 pandemic has changed much about what people thought they knew about the world. While for some, it merely confirmed what others already knew. One hard truth for many people is the difficulty of keeping their finances stable during such trying times.
Finances in Hard Times
Due to the months of damage to people, homes, businesses, and families, the financial hardships are apparent. Quarantines and lockdowns have forced many to work from home, and others face unemployment or reduced hours at their jobs.
Reduced hours mean a lower income, and such losses during a crisis like the pandemic are not easy to handle. Businesses have had to adapt, and those that could not went out of business. Businesses closing meant even more people were unemployed, causing a ripple effect on the economy as suppliers and infrastructural supporters also lose business.
The Credit Problem
To make up for lost income, some businesses and people have resorted to using credit to stay afloat. That means increased debt that must be paid eventually. Short-term problems thus become a long-term financial hardship. The poorest people are significantly affected by the pandemic’s difficulties. Not only are their finances precarious to start, the slightest disruption, such as a few lost hours of employment, spell disaster.
The Long Term
Fallen incomes mean unpaid bills, more debt, and possibly even eviction. Plenty of benefits and lifelines have been put in place to help those suffering the pandemic’s financial hardships. However, those benefits are mainly short-term, and the long-term economic effects of the pandemic yet to be fully understood.
While the poor and lower-income workers have been particularly affected by the pandemic, small business owners and their employees have also suffered. Fewer businesses have operated at maximum capacity with the needed hours to support their staff, and the resultant backlash has rippled through the economy. To compensate for these reduced hours, some are accumulating more debt. Overall, those not of the elite classes have suffered severe economic hardship, and that hardship has brought to light issues and problems that must be addressed.
Fewer people are working, and fewer businesses in operation mean less economic stimulation across the board, which means fewer people are working. Overall, COVID-19 has affected all aspects of the economy in at least some form. How long the damage will last has yet to be seen.