And how we can use those lessons to be smarter moving forward.

The text messages, DMs, and emails rapidly arrived, all of them expressing a similar concern: My finances are in trouble. In seemingly just a few weeks’ time, our world was turned upside down. A public health emergency raced around the globe, wreaking havoc on nations, cities and neighborhoods. The United States has not been immune: Markets tanked, jobs vanished and, most importantly, lives have been lost.

During these times, many have found themselves sitting at home, wondering what could have been done differently and how to let that knowledge better their future decision-making. Financially, this crisis has certainly provided its fair share of lessons learned, ones that we would’ve rather not learned the hard way. The point shouldn’t be to dwell on regretful mistakes but to move forward wiser and more determined than ever before.  So what lessons have we learned so far?

1. Overconfidence leads to poor financial decision-making

It’s astounding the difference a few weeks can make. Not too long ago, the market was reaching new heights while unemployment was hitting rock-bottom lows. Everything seemed good. And many were making financial decisions as if nothing could ever change — spending more, accumulating debt, selecting riskier investments and saving less. But everything did change, and it exposed the fragile financial house that had been built. Overconfidence leads to poor financial decision-making and being too aggressive in some areas while ignoring others. We must be wiser.

2. Everyone needs an emergency fund

Financial experts have stressed the importance of emergency funds for some time. Why? Because a financial emergency is not a matter of “if” but “when.” Having an adequate emergency fund can get you through times when income is low or nonexistent. Those who had money set aside for an emergency are better able to weather this current storm. How much should you save? I recommend three to six months worth of living expenses, depending on how many are reliant on your income. A financial emergency will happen, and we must be prepared.

3. Developing multiple streams of income is more important than we realized

In my book Find More Money, I walk readers through how to get a side gig and generate income outside of their full-time job. There are many reasons why people get side gigs: to pay down debt, save for the future or even to be able to give away more. What the crisis has taught us is that multiple streams of income can not only help us reach our financial goals when times are good, but they can also help us make it through times when the economy tanks and layoffs are common. The additional income streams provide a chance to generate some income even if a job is lost. Moving forward, developing another stream of income is worth considering.

4. Debt stinks

For many of us, credit card balances and car loans reflect a lifestyle that we can’t actually afford. We try to “keep up with the Joneses,” but statistically speaking, they probably can’t afford their lifestyle either. So, we’re chasing a façade. And what do we find at the end of the chase? A massive burden. And even though you hate the burden, you still must pay your bills. During tight financial times, the burden feels even heavier. We have less money to pay the bills, and the accumulation of late fees and interest make the debt even greater. Debt really does stink.

5. Saving for retirement is not for the faint of heart

Earlier I mentioned the danger of overconfidence. During bull markets, it is overconfidence that leads to bad financial decision-making. During bear markets, it is fear. When the market dips, your emotions will beg you to abandon your investment strategy and sell it all. But this is a big mistake. We know what leads to successful retirement investing: discipline and a long-term mindset. We must let our brain override our emotions.

6. Financial margin is key

Emergency funds, debt-free living and retirement savings are all worth pursuing. However, in order to chase after these things, we need financial margin. Living paycheck-to-paycheck won’t get us there. We must learn to maintain our existing standard of living while our income increases. We can’t let the number on our paycheck determine the amount we spend.

7. Generosity changes lives

Where there is great darkness, light shines even brighter. We’ve seen the impact that even seemingly small acts of generosity can have on our neighbors and community. What we do with the resources we have matters. It matters for them, and it matters for us. Although we frequently regret past purchases, we rarely regret past generosity. Generosity should be a financial priority for us all.

We’ve been knocked down and are hurting, but we can’t be content lying on the mat. We must get up, ready to fight another day, equipped with the lessons we’ve learned.

WRITTEN BY: ART RAINER – ENTREPRENEUR