Jose Cruz
Financial Analyst
Personal Finances in Times of COVID
If 2020 has taught us anything, it's that the economic landscape can change in an instant. During this year, various stock exchanges around the world plummeted, including the Mexican Stock Exchange, which reached levels not seen since 2011, essentially "erasing" the growth it had seen since then. Just between April and May, nearly 10,000 companies closed in Mexico. Official data also indicates that more than 1,180,000 formal jobs were lost due to the pandemic. This is not to mention the impact on the informal sector, which represents a significant force in our country's economy.
Our day-to-day lives have also been modified. On the other side of the coin, e-commerce is experiencing a significant boom. Companies engaged in activities such as video games, online courses, and sports products have benefited from the new dynamics. Distance education and remote work have shown us that we can continue even in such challenging contexts as the current one. In Mexico City, various businesses and recreational spaces are reopening. It has been mentioned in various media outlets that the worst is over and that an economic recovery period lies ahead. At this point, it is important to stop and question: is it true that the worst is over?
At macroeconomic levels, some indicators suggest that indeed there will be a recovery, albeit slow. Political and economic decisions should aim to benefit the general population. However, we must not lose sight of individuals. For many of us, the worst is yet to come. Some families unfortunately lost their breadwinners, individuals at risk may find it difficult to seek employment soon, and others have seen their main source of income disappear, either because they were laid off or because their business went bankrupt. Many have depleted their savings to overcome this illness or to cover funeral expenses for their relatives. In short, a myriad of complex situations, combined with a lack of financial literacy and foresight, will make the coming months extremely challenging for these individuals.
While it's true that we are all weathering the same storm, each of us is experiencing it from different boats. Some are in a boat prepared for adversity, others are barely in a sailboat, and some have nothing more than a plank to cling to. Therefore, it is essential that as members of this society, we can have a perspective based on empathy, support those in need, buy from local businesses, provide assistance to people at risk, create job opportunities, and employ those who are seeking work. Entrepreneurs should temporarily prioritize sustainability of their businesses and the well-being of those who depend on them over seeking profits. As individuals, it is important to open our hearts, seek help if needed, and provide assistance in any way we can to those in need. Only together can we emerge from this crisis faster and in better conditions.