Question

How has COVID 19 had an impact on financial planning?

Answer 1

Covid-19 has impacted the financial planning through-

A. There has been a lot of uncertainty due to covid-19 and various events cannot be preplanned in advance so it is impacting the financial planning.

B. There is emergence of a large number of macro risks because the central banks are changing their monetary policy quickly in order to counter the covid-19 so it is leading to a lot of financial planning fluctuation

C. there has been an expectation of an impending recession and hence there will be a better allocation to the emergency fund in order to survive and sustain through these adverse economic cycle

D. There would be a large focus upon changing of the income structure due to cutting off the expense caused by the company which will be leading to changes in the financial planning of different individual due to lower income.

E. changing in the financial planning due to assets losing their value when turning bad because of credit crunch in the economy as well as a high level of liquidity risk into the economy

F. increased geo-political tensions and lesser geo political movements has also exposed to a large number of of financial planning problems.

G.Cash flows and discounting rate in such scenarios when there is a lot of changing macro factors as well as micro factors cannot be accurately estimated in advance and hence it is counting a lot of problems related to the financial planning.

so it can be summarised that the covid-19 has a vast impact on the overall financial planning process because there is a large number of uncertainty and fear psychosis.