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The steps necessary to rebuild savings during the Coronavirus pandemic

Nicola Smith Jackson joins Yahoo Finance’s The First Trade with Alexis Christoforous, Brian Sozzi and Janna Herron to discuss ways people can rebuild their wealth after the impact of Covid-19.

Video Transcript

BRIAN SOZZI: The savings accounts for thousands of Americans are completely wiped out because of the impact of COVID-19, but there are ways they can bounce back. Let's break all this down with Nicola Smith Jackson, market strategist and wealth assets manager. We also have Cashay editor Janna Herron here with us as well. Good to see you both.

Nicola, let me start with you here. How badly are Americans suffering right now?

NICOLA SMITH JACKSON: Well, we're really not in good shape at all. The coronavirus pandemic thrusted us into not only a health crisis but also an avalanche effect on the economy. And, simply, Americans were not prepared financially due to the huge gap in employment as well as financial literacy.

You know, I don't know. I can tell you right now that with America being a leader in the world economy, everyone is watching us right now, and many Americans ran out of money really quickly at the onset of the pandemic due to our spending habits. 1 out of 3 Americans don't have a budget, and over 60% have no emergency savings. So they couldn't last as long as we even thought, especially with the jobs-- even though we see jobs increasing.

However, still many millions of Americans are still without employment, and it's affecting even the micro to mid-cap businesses as well.

JANNA HERRON: Nicola, thanks so much for being here. Yeah, you're right. So many people don't have those budgets. They don't have those emergency savings, but we're even six months into this pandemic. So even if you had that six months of emergency savings, you may have already run through it. Do you have any other-- did you want to adjust that six months' savings now given the pandemic?

NICOLA SMITH JACKSON: Absolutely, and this is coming to the due fact of not enough income generation. Many Americans are living off of one income. And again, that financial illiteracy, us not understanding that multiple streams of income have always been a necessity, not as we thought of as a luxury.

And so I believe that more education needs to be into the American mainstream. This financial literacy is not in schools. However, that means that we have a lot of adults who even went through school or even college without these basic needs of financial literacy, that you need more streams of income.

ALEXIS CHRISTOFOROUS: You know, when you look at these numbers, does it make it clearer that the government should get involved, that we need another stimulus package?

NICOLA SMITH JACKSON: Well, the thing is money without instruction still leave us in that slippery slope. We're giving them money but without instructions of how we can now become sustainable. Things that we've done in the past to fix our financial woes are simply not working. We're realizing that people are needing to have more solutions even when we talk about home-based businesses. Many people are still wanting to refer back to the old way of doing things, not realizing that we are in a new norm, that entrepreneurship on a micro level needs to be addressed. It also needs to have funding around that type of education, and this could even create more jobs. And not only to mention more parents at home with children who are still-- many of them homeschooling.

JANNA HERRON: Nicola, you talked about parents right then there, and I'm helping my son to learn remotely. And you see some parents actually stepping out of the workforce because they need to help their children at home. What is your advice for them?

NICOLA SMITH JACKSON: Well, the advice is back to let's look at-- we know that there are many industries that have had a adverse effect, but there are some industries that have emerged like the gig economy, and there are some industries that many people are unaware of that were keeping it, you know, back burner. And obviously all of those are not home based, but there are some industries that we should look at these models that have thrived during the downturn of the economy, and that has not been addressed.

Everyone is not doing bad, and that's what we need to look at. And we need to look at who is doing well or who has thrived in this downturn and start to bring that forefront.