I live in Korea and I have been heavily impacted by the coronavirus. No, I’m not sick, and even if I do 100% of my care will be free. I’ve always heard of emergency funds, and so forth. I’ve also always heard of preppers who spend lots of money stockpiling supplies to survive things like the coronavirus. Until recently Korea had the 2nd largest outbreak of the virus. Here are some of the many economic impacts it has had.
- Many businesses are shut down, especially bars and restaurants.
- Many schools are shut down (especially private schools)
- Many large companies have shut down major parts of their operations
Some real impacts on my life
My income has been slashed due to a massive drop in workload. This effect was essentially immediate. My income for the next few months is going be a fraction of what it normally is. And this is a direct result of the virus. There is nothing I can do to combat that.
My girlfriend is a teacher for a private school. Her school has shut down, the question on her income is up in the air at the moment. Her school isn’t receiving tution fees from the students since they are no longer in operation, but we still got bills to pay. So does her school.
Now luckily for us, I literally completed funding my emergency fund in January after saving up for it, I’m laughing because chances are starting in April I’m going start taking money out of it to survive. This is with me drastically reducing what I spend. Some changes I’ve made
- Not driving anywhere so no parking/gas expenses
- Not going out for drinks or dinner
- No trips
- Not buying anything we don’t need, those new pair of shoes? Yea they can wait
Although we have spent some money, I recently got back into playing online poker I deposited $50 to keep my mind busy, I’ve also bought two new video games to take up time. My girlfriend ordered some art supplies and is painting a bunch. However those extra expenses are small compared to what we are saving.
Some other examples I’ve seen
A friend of mine owns a bar, its pretty successful. Recently he did some renovations in preparing for the upcoming spring/summer. His bar is now closed. He had to close it to save money because so many people were staying home it was costing him more money then he was earning to stay open. However, he still has bills he has to pay. He has a mortgage on his home, he has rent on his bill, car payment, and all your other standard bills. He’s done the math and if by Mid-April he’s not able to open back up he may never have the money to open back up again
The big spender friend
I have a friend who has lived paycheck to paycheck and never saving. His company has shut down and put him on unpaid leave. He’s not earning an income, has next to nothing in savings, and still has living expenses. He’s had to go to a bank to get a loan to pay rent. FYI if this virus last long enough (it’d have to be about 6-7 months) I may also have to go get a loan to pay rent, but at least I don’t have to do that yet.
You can still go to the store and buy all the food, water, etc what you need. The supply chains are still fully functional and shelves are pretty much stocked. No one is going hungry, but pretty soon people will be going broke. The Korean Govt has said they plan on giving out grants to small businesses, one major fear is that after the virus passes many small businesses (which are an important part of the economy here) will go out of business as soon as they open.
And this just really highlights the importance of an emergency fund.
And FYI my SO and I did some math, with the cut back on our expenses we should be able to survive up to 10-12 months with no income. You’d be amazed at how little money you spend watching netflix all day.
SO seriously folks, get your emergency fund going. I’m seeing people all around me freaking out over lack of financial capacity. And 2 weeks ago everything was normal.