It's just over a month since the first case of Covid-19 was confirmed in Ireland. The challenges faced by this country and its citizens since have been unprecedented. Like other crises which have hit this country, this emergency will pass in time. When it does pass, it is important that we learn from it. Given so many of us have lost money since the crisis hit, what are the financial lessons which can be learned from this - and other pandemics?
Always have an emergency fund
You should always set aside some savings to tide you over at times of emergency, unforeseen problems, or when income is unexpectedly low.
"If there's one financial lesson you should learn from the coronavirus crisis, it's that it's always important to save money - and to know that things could go wrong at a moment's notice," said Tony Foley, emeritus associate professor of economics at Dublin City University (DCU). "So don't expend yourself and don't assume that everything will always be rosy."
The easiest way to build up an emergency fund is to do so through a long-term savings account which you cannot access easily. The bigger the emergency fund you can build up, the better. Some financial advisers recommend building up a fund equivalent to about three months' of your salary; others advise setting aside a year's salary.
For those who have lost their jobs as a result of the coronavirus, the time to build up an emergency fund is not now, as you're very unlikely to have the money to do so and it is now that you need a nest egg. However, once this crisis passes and you get back on your feet, make it a priority to build an emergency fund.
For those who are still working, it would be wise to save more of your earnings and to ensure that you can access those savings quickly if you need to - in case you too lose your job.
Protect the breadwinner
To help prevent the spread of the coronavirus, the Irish Government has advised people to work from home if they can. Follow this advice. Breadwinners - the main earners in a family - are crucial to the economic well-being of a family.
Although most of those who contract the coronavirus survive it, it has also made many people very ill - and the number of deaths due to coronavirus is more than 58,000.
The importance of the breadwinner is one of the lessons that can be learned from the Spanish flu - one of the deadliest outbreaks of influenza ever recorded. That flu arrived in Ireland in May 1918 and lasted until the middle of April 1919.
About 800,000 people in Ireland were infected with the Spanish flu and around 23,000 of them died, although this is believed to be a conservative estimate.
Those between the ages of 25 and 35 were badly hit by the Spanish flu. Many young families were left without their breadwinner as a result.
"Lots of people lost their homes - as families would lose their income if the breadwinner died," said Dr Ida Milne, a disease historian and author of Stacking the Coffins, a book which shows the devastating impact which the Spanish flu pandemic had on Ireland. "If you were a teacher back then, a house often came with the job, so a family would lose their home if the breadwinner was a teacher who then died."
A steady job will stand to you
Having a permanent full-time job - as opposed to casual, freelance or contract work - will usually stand to you during times of crisis. You are less likely to lose your job if you have a permanent and pensionable one. And even if you do, you are likely to get better financial and other support from your employer than you would as a casual worker, or a worker on short-term contracts or freelance work (often known as 'gig economy' workers). You are also more likely to have a job to return to once the crisis passes.
There are exceptions to the rule: since the Covid-19 crisis erupted in Ireland, there has been a big increase in demand for certain contractors - particularly those experienced in IT and technology, finance, insurance and change management, according to recruitment agency Walters People Ireland.
All the same, many contractors and casual workers will lose out in this crisis - particularly those who don't have the experience or expertise currently in demand. This was also a feature of the Spanish flu pandemic.
"The Spanish flu affected people in the gig economy very badly," said Milne. "People in the lowest [social] classes who wouldn't have had savings, who often lived in the tenements and who might be dependent on casual labour were hit very hard. Hawkers [people who travel about selling goods] were also badly hit. The rich, on the other hand, had a bit of a cushion."
Hits to the economy will affect you
The hardest cross to bear with pandemics and epidemics is death and serious illness. However, it is clear that such crises also take their toll on economies - and in doing so, impact upon our quality of life and how easy it is for us to make ends meet. The more prolonged and severe the crisis, the greater the toll.
The Black Death bubonic plague, for example, which struck Europe and Asia in the mid-1300s, had a devastating impact on lives and the economy at the time. "The Black Death weakened Europe's economy for 30 years or so - as so many agricultural workers died," said Milne.
By contrast, the smallpox outbreak in Dublin between 1902 and 1903 had no impact on the national economy, according to Dr Ciarán Wallace of Trinity College Dublin's department of history.
"This outbreak was the disaster that did not happen," said Wallace, who has researched and written about the smallpox crisis. "Considering how highly infectious smallpox is, and the death rate it can produce, Ireland was very lucky that there was a known vaccine and that the administrative structures were in place to respond with impressive speed. As the outbreak was contained while it was still in the streets around Dublin's docks and in the north inner city, there was no effect on the national economy."
There were 360 confirmed cases of smallpox in Dublin during that outbreak, with 33 deaths recorded, according to Wallace.
"The numbers affected were relatively small - not enough for a national-level response - and the great majority were from the city's poorer streets, where casual employment was the norm," said Wallace. "So once a breadwinner was clear of the disease, they simply returned to the daily search for work on the docks, or in street trading, or as a cleaner in some office or shop."
The Spanish flu, on the other hand, had a much harsher impact on Irish people and the economy. That flu silenced entire communities and towns. "When the Spanish flu came, businesses shut down and some of them never reopened," said Milne. "Either families would be wiped out by it, or they stayed at home to avoid getting it."
Fallback plans are important
One of the lessons which can be learned from the Spanish flu is the importance of having a fallback plan for production supplies in a crisis, according to Milne.
"When the Spanish flu hit, farmers went ill - so the women from the towns picked the potatoes," said Milne.
"Similarly, many creamery workers had to go out and milk cows - as the farmers were too sick to do so. So those who have a family business today should be training other people up in case they get sick and can't continue."
Community and charity matter
The Covid-19 crisis has seen communities come together to support each other. This mirrors previous crises here in Ireland. "There were an awful lot of neighbours helping neighbours at that time of the Spanish flu," said Milne.
Charities, too, are often drawn on in times of crisis. "In a period of great poverty and limited social welfare, it is very likely that families affected by the smallpox outbreak in Dublin [in 1902 to 1903] called on the services of local charities for the basic essentials," said Wallace.
Your health should be your priority
Although most of us have lost money in the ongoing crisis, this should not be your priority.
"If you lost your job, at least be thankful that you are at home and therefore less likely to catch the infection," said Milne. "Just as the Spanish flu passed, this coronavirus too will pass."
Better social welfare than the past
This country’s social welfare system is much better than the systems in place during the previous pandemic which hit Ireland: the Spanish flu.
The Government has made a number of payments available to help those affected by the coronavirus, including the Covid-19 pandemic unemployment payment. “Today, we have the protection of Government support. There was no such financial support from the State in 1918 [when the Spanish flu hit Ireland],” said disease historian Dr Ida Milne.
There is, however, a limit to the extent to which the State will be able to support Irish people. “The Government has stepped in to support lost income,” said Tony Foley of DCU.
“However, this financial support will only be possible for a short period of time — maybe for up to six months — because, ultimately, this money has to come from somewhere. Every country in the world is going to be trying to borrow money [to deal with this crisis]. If this crisis continued on for another year, we’d have to rethink everything. Taxes would likely go up for those that are continuing to work.”
More of us have pensions and life cover
During the Spanish flu, many Irish people had no pension or life assurance. This is very different today: more than half of Irish workers have a private pension, the state pension is paid to people from the age of 66 (who qualify for it), and there is an invalidity pension from the State for those who cannot work due to a long-term illness or disability.
There is a widow or widower’s state pension, and many civil service workers pay into a spouse and children’s pension scheme — which offers financial protection to families as it provides a pension for the spouse and dependent children of a member who dies in service or after qualifying for a pension.
Economy strong before covid-19
The Irish economy was in very good shape when the coronavirus hit so this, too, should stand to us. However, the recent economic boom — which saw record employment in Ireland — may also have encouraged a certain amount of complacency among people, and made them more inclined to spend, rather than save, money. Record rents didn’t help either. “Some people don’t have the money to save today — any more than they did in 1918 — due to the high rents being paid by many today,” said Milne.
It's hard to spend
With so many shops and restaurants closed, it is largely only groceries and medicine that we can spend our money on. So for anyone down income, this may be some comfort. Banks and utility companies are also taking a flexible approach to bills, so if you fall behind on bills or loans, you should be given some breathing space.
Sunday Indo Business