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As you will realise every time you switch on the TV or look at your phone, the world is in the midst of one of the most challenging periods in human history. Covid 19 has devastated whole industries and crippled economies. Though there has already been unprecedented financial aid provided by the world’s governments, the economy is still in serious trouble. This means that everybody other than the super-rich are likely to be in a severely difficult financial situation. With so many job losses on the cards, many people may now be forced into a situation that means they need to use their savings as a means of paying for the impact of Covid 19. To help you make the best financial situations in this difficult time, Asteria have put together a list of positives and negatives to consider when thinking about spending your savings during the pandemic.


No Borrowing

The most obvious advantage of using your savings to pay for the cost of Covid 19 related emergencies is that you do not need to borrow from loan providers or credit card companies. Though it will no doubt feel far from pleasant when you use a chunk of money you had been saving for something like a holiday or a new car to pay for the cost of a lost job or an expected medical emergency, it is generally a far better alternative than getting in to debt when you don’t really need to.

Less Impact on Your Credit Rating

Though credit checking agencies do monitor saving accounts, using your own money to pay for emergency purchases during Covid 19 will have far less of an impact on your score than taking out a credit card or personal loan in order to cover costs. Though savings are not always the main factor in credit ratings they are something that is considered, so be mindful of this before you start using what you have built up.

Forces You to Spend Carefully

As you have no doubt taken some time in building up your savings, when you do come to spending them, this forces you to think carefully before you part with your money. Unlike credit cards or loans, or even your salary payments, your savings can feel more valuable due to the effort you have invested in making sure you put away a little bit each month.

Savings Can Be Built Up in the Future

Though it may feel profoundly depressing to have to use your savings for every day essentials and covering the cost of Covid emergencies, if you are in a position to do this, you are in a far better financial position than many people in the world. Nobody really knows what the future holds at the moment but generally speaking, savings can always be built up again and will always be preferable alternative to borrowing when you do not really need to.


Loss of Financial Safety Blanket

Having savings, no matter how little, can create a sense of financial security or a financial safety blanket, if you like. When you use up all of your savings, this sense of security evaporates, and you are left with a sense of loss. Using credit cards or personal loans could be an option for you if you feel this way, providing you know that you can make regular repayments if you need to. If nothing else, this can be a way of delaying using your savings straight away.

You Will Need to Sacrifice Future Purchases

Most people save for things like once in a lifetime holidays, college funds for the kids or later life treats like classic cars and relocation after retirement. If you use your savings to pay for Covid emergencies, these things may no longer be options for you in the future. Unfortunately, this may be an unavoidable part of life for those who have lost their jobs or suffered massive profit losses due to measures such as lockdown and social distancing.

Risk of Overspending

When you get into the mindset of spending your savings, it can be quite easy to splash out on things you do not really need. This is especially true if you make purchases during periods of panic, anxiety, or extreme worry. Before spending, make sure you are calm and rational enough to make an informed decision. It is easy to act recklessly when you are faced with an unfamiliar, emergency situation such as Covid 19, but this is not a good idea. Treat your savings in the same way you would treat your salary in an emergency. By this, we mean only spend what you really need and try to keep back as much as possible so you can avoid going into unnecessary debt.

Poor Decision Making and Panic Purchases

Using savings to pay for purchases in emergency does make a lot of sense but the way in which you spend your money is also important. Having savings at a time like this puts you in a position of considerable privilege compared to many people, however, that does not mean it is time to start spending with impunity. Unfortunately, some unscrupulous marketing firms still use scare tactics and clever wording to rush potential buyers into a decision. If you are using your savings to survive at the moment, always be mindful of this and never succumb to pressure tactics. Make your decision to spend when you feel ready and only when you are comfortable.


For many, using savings to cover the cost of Covid 19 is unfortunately inevitable, however, credit cards and personal loans may be a viable alternative for some. If you want to retain a sense of financial security, it may also be worth considering a combination of the two options. Using some of your savings and a small to medium sized loan could be an acceptable compromise if you feel as if you do not want to use everything you have built up in one go.

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