The pandemic has left no stone unturned - and that includes the world of family finances. Today, we’re covering some of the key facts about how Covid-19 has impacted household money management, and we hope it helps you to better understand your current financial situation.
Covid-19 introduced a whole wealth of difficulties for money management, and we’ve already discussed how women were hit hardest..
Women & Covid-19:
- Globally, women’s job losses due to Covid-19 are 1.8x greater than men’s.
- In McKinsey and Lean’s 2020 ‘Women in the Workplace’ report found that 8% of mothers had thought about going from full- to part-time work, compared to 2% of fathers
- 1 in 4 pregnant people and new mothers have felt singled out for redundancy or furlough during the pandemic
How did the pandemic impact family finances?
Childcare & flexible working hours
The last year of lockdowns, redundancies, furloughs, and more, has left a lot of people in debt, or with less savings than they had hoped to have built by this point.
For families, there have been many additional pressure points. Younger children needed to be entertained and occupied every day, while parents were also juggling working-from-home. On top of this, many adult children returned to their family homes in search of some normalcy and comfort in ‘uncertain times’, bringing with them further household expenses.
As schools moved online, parents & caregivers have had to find flexibility in their working hours. Childcare - especially throughout 2020, was a far less feasible option, and with the pandemic putting the older generation at particular risk, many parents also took on additional caregiving responsibilities. This has been even more difficult for parents in lower-paid roles, as working-from-home was often less of an option.
Increased stress & long-term worries
Financial stress can quickly create a downwards spiral which is difficult to break out of. Money worries can make you avoid thinking about the issues, which allow them to keep growing, and over time, a minor problem becomes a major hurdle.
Earlier this year, PwC found 63% of employees had greater financial stress because of the pandemic, and that this stress was contributing to increased credit card use, borrowing money from retirement funds, and generally, a lower household income. When ‘money’ is found to be a bigger stress than a global pandemic, we can clearly see that there is a problem in the way we approach our finances.
This is why financial education and confidence are so important. If you understand the problems you’re facing, you are immediately far more prepared to handle them - or at the very least, you’re able to reach out for help. Take a moment to think about how greater financial literacy could help lift any current financial worries?
3 tips to reduce financial stress:
- Identify your top money stressors & realistic steps to tackle them
- Start building a long-term plan and use this as motivation
- Talk to someone you trust - friends, family or a financial advisor
But there are still positives to be found...
Although we all wish it could have come through better circumstances, the pandemic did see one huge shift in our finances: we’re all talking about our money far more than we used to.
MarketPlace published a recent article about how ‘the pandemic has changed how some parents talk to their kids about money’, and the stories included all talk about how Covid-19 forced parents to reconsider how they were handling their household finances. When they sat down to sort through all the additional stress that this pandemic has brought, they were often motivated and inspired to talk to their partner, their friends, or even their children about money.
And now for some SmartPurse news...
If everything you’ve just read shows us one thing, it’s that financial education for both parents & children is an essential need. And we want to help you by providing independent, jargon-free education on specific topics for family finances.
In the meantime, you can help us to tailor our education to your needs in just two minutes...
Thanks for lending a hand!
- If you are a UK parent/caregiver, please fill out our new ‘Children & Money’ survey - we promise it won’t take long at all!
- If you’re not a UK parent/caregiver, you can still help by sharing the survey with your friends and family.
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