There is no doubt whatsoever that the impact of the COVID-19 crisis on the economy has been incredibly significant. The impact on the economy is something that has been seen on both a national and international level but one of the things that many of the figures that you might see when it comes to the economic impact of COVID-19 is the specific impact that it has had on many people’s personal finances. With that in mind, here are just some of the ways that COVID-19 has impacted the personal finances of many people.
Falls in employment
One of the most immediate things that was noticed when the COVID-19 crisis began was that there was an incredibly sharp and abrupt fall in employment, earnings, and income as early as April. As time as gone on, there have been minor signs of recovery but many of them were not particularly significant. Many people who were unable to work from home were simply left without employment and many freelance and self-employed people experienced a significant drop in their monthly income as a direct result of the COVID-19 crisis.
Poorest households impacted the most
Another common factor when it came to the financial impact of the COVID-19 crisis on individuals and homes was that the poorest households were often those impacted the most severely by it. Those who, before the crisis, were in the lowest household earnings bracket experienced as much as a 15% fall in their median household earnings as a direct result of COVID-19. While taking income as well as earnings into account, the poorest households had not fallen far behind many other people on average, there is no doubt that the most significant impact of COVID-19 was felt by those households who were already experiencing financial difficulty.
The potential for increased debt
During the COVID-19 crisis, there have been many people who were simply unable to pay various household bills. From mortgage holidays to simply being unable to pay certain household bills, this has been a useful way for many people to weather the storm. However, this presents the issue that, for many people, this is essentially just kicking the can down the road. These unpaid bills will amount to debt that they will simply have to deal with further down the line. Something that, given the impact on many people’s earnings, could result in some serious problems.
The reality is that many of us simply do not know how the COVID-19 crisis will continue to impact the finances of millions of people, or for how long those effects are going to last. However, this does not mean that there are no resources available to those who are struggling financially during this difficult time. From debt charities to a great deal of advice on how to live on a reduced income that is available online, there are always things that you can do to make sure that the impact of COVID-19 on your finances is minimized as much as possible.
If you need a loan during these troubling times, we’re here to help.