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Six money lessons from Covid-19

Many of us are hanging out for the day that Covid-19 is nothing but a memory of a strange time when the world stocked up on toilet paper and flour and hunkered down at home.

But while we’re keen to shake off the lockdown as soon as possible, some of the personal finance lessons learnt from the coronavirus outbreak will be worth remembering in the years to come.

Here are six money lessons that we can take with us into the new future.

Always understand the risks you’re taking

The recent market downturn has been a timely reminder that investment returns don’t always go up. But for many New Zealanders – whether property investors, KiwiSaver members or the increasing number who’ve been dabbling in direct share investment in recent years –  it was a rude shock when they discovered that they weren’t able to handle risk quite as well as they thought they could. The problem was that once the pandemic struck, it was a bit late to do anything about it.

This outbreak, and the market response, may teach people that even if markets have year after year of amazing returns, there’s always the potential for that to change. Risk is completely fine – and provides most of the long-term returns from all types of investing. But you need to understand the risk you’re taking and know you can handle it emotionally as well as financially.

Have an emergency fund

We’re always told to have an emergency fund – anything from a couple of months’ worth of income to a year’s worth of expenses, squirrelled away in a bank account before we start investing in anything else. And recent times have shown us how important that ‘safety net’ can be – for the crises you can’t see coming as well as the ones you can.

We can survive with fewer indulgences than we think

After the initial surge of panic buying, the lockdown has proved to many of us that we can make it through at least four weeks with nothing more than spending on the basic essentials.

While this doesn’t mean it should become our ‘new normal’ (we all know life’s better with a few indulgences here and there), it may be something to keep in mind the next time you look at your budget.


Covid-19 has hit some parts of New Zealand much more than others. For investors, it can be a lesson in diversification. If you have invested in a wide range of sectors and industries, as well as different asset classes, you’re likely to have felt less pain than someone who put all their money into Air New Zealand shares or buying apartments to Airbnb, for example.

You never know when you’ll need help

The idea of taking money from the Government was totally foreign to many New Zealanders until this year, when many businesses claimed the wage subsidy to help lessen the Covid-19 blow. For many, it was a good reminder that you can never know the circumstances that lead to people needing assistance.

Shopping local makes a difference

It can be easy to fall into the habit of stocking up at Asos or Amazon. But the Covid-19 outbreak has reminded many of us that New Zealand is a nation of small businesses, which rely on us to keep going. According to recent Colmar Brunton’s research, an increasing number of New Zealanders have pledged to do their post-lockdown spending with shops and restaurants that are local to them. If that’s a lesson that sticks, it should help our economic recovery.

Need to talk?

Whether you’re facing a financial decision or just want some reassurance you’re on the right track already, please get in contact with us. We can arrange an appointment via phone or videoconferencing at your earliest convenience.


Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.

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