How COVID is Changing Personal Finance - Is this YOU?

We’re on a path to a predictable and unfortunate outcome — millions of working Australians unable to meet their basic needs

in retirement.” COVID-19 is the most adept predator humanity has ever faced. Why? Because protecting oneself during the pandemic requires the sort of radical self-reflection that many people eagerly avoid.

And that’s especially true of personal finances.

Photo: Unsplash Source | Medium

Nobody wants to admit when they’re losing the financial game, just like no one wants to admit they’re choices could manifest

the spread of disease.

It’s this lack of transparency that COVID-19 feeds on, the results of which are already impacting personal finance. Job losses have

resulted in consumers taking on debt to pay their bills, and young are choosing risky investments in tangible assets and real

estate over diversified portfolios of stocks and bonds.

But, knowing these changes are happening isn’t enough. Getting back on track financially always begins with addressing

underlying problems, not just the physical symptoms.

Consumers are taking fewer actions to protect their identities

Pandemic fatigue is real. And between the economic downturn, massive job losses, and public health concerns, many consumers are choosing not to focus on protecting their identity.

A recent survey by LendingTree found 50 percent of respondents are not concerned about identity theft, and they are

increasingly less likely to take action to prevent it from occurring.

Similarly, 84% agreed that data breaches are becoming more common, which dropped from 91% in 2019.

According to a report by the Financial Health Network, only 29 percent of Australian households say they are “financially

healthy”, meaning their present financial planning ensures future success.

Globally, the numbers are not much better. Even though nearly half of the families in Japan and the United Kingdom report

being “financially healthy,” over 90 percent of respondents in Bangladesh, Kenya, and Columbia report experiencing some

financial insecurity, according to a 10-country financial health survey authored by Gallup.

For retirees and older Australians living on fixed-income, data breaches can be a death knell to their financial security because

most retirement plans have moved away from self-managed super funds to the pension.

“Taken together, rising costs and the challenge of accumulating and investing savings are making retirement an unsolvable

puzzle for most Australians.

“We’re on a path to a predictable and unfortunate outcome — millions of working Australians unable to meet their basic needs in retirement.”

Concern about credit is reaching a dangerous low

The same Tree survey also found that Australians are less concerned about checking their credit scores than they were last

year, with just 33 percent reporting they checked within the last year.

Most troubling, the report says, is that just 20% of those aged 75 and older reviewed their credit report in the last year, placing

them at an increased risk of fraud.

Respondents were also less likely to use other means of protecting credit scores such as reviewing bank statements and

changing banking passwords.

“So, it’s really important that you take the time to protect your credit, to protect your vital information, and to protect your finances. Because nobody’s going to do it for you.”

Focusing on eliminating debt and building an emergency fund

Many of the money problems people are facing during the pandemic were created by bad financial habits.

This is why many have taken the opportunity to shift their financial priorities toward building good financial habits for the

future during the pandemic.

Those include paying down debt, paying monthly bills, and building an emergency fund, according to a survey conducted by

DepositAccount.