The world is suffering greatly under Covid-19 and South Africa is no exception. SA is still struggling to come right under level one with warnings that a second wave might be on the horizon. Millions in South Africa are suffering huge financial losses already, with more millions trying to change the way they manage their expenses.
They are spending less on luxuries whilst at the same time trying to re-negotiate bond payments, car insurance premiums, and eke out a living working from home. The biggest financial concerns for South Africans now are job security, temporary and permanent lay-offs, and salary cuts.
The economy was already on its knees in March 2020, and Covid-19 was just the final nail in the coffin, downgrading South Africa’s long term international credit rating as junk status. As we rush towards the end of the year, see what the impact has been on this country. What is certain though is that a further lockdown is going to inflect major, perhaps even fatal damage to the economy.
Did you know that 85% of South Africans are in need of financial help?
With staggering income inequality, Covid-19 has put millions more out of jobs, but South Africa is taking steps to try and help. People are grabbing financial help in any way they can. In light of the second wave, it is really time to offer some simple but effective financial tips to put into effect in this money-tight time.
Coronavirus has caused not only a major health crisis in this country but massive financial stress for many young and older professionals in South Africa. The ‘new normal’ has meant a changed mindset around money.
Adapt your budget
This is the perfect time to work on your budget. It is time to prioritise expenses and to try and pay off or reduce debt as much as you possibly can. You can always start with a flexible budget and adapt it as the need arises.
Ask for your money back
Certain services can be examined more carefully, for instance, your gym membership. You might be entitled to cancel it or even suspend the subscription. Try online working-out sessions where you can keep fit at home.
If you paid for travel that was cancelled during Coronavirus, ask for a refund – maybe delay or postpone your travel plans and get a discount.
If you are going to work from home, you can save money that you would normally travel to work with, such as the fuel for the train, taxi, or Uber. If you don’t use your car to travel to work anymore, you can try and investigate lower premiums by contacting your insurance provider. Here Investec offers some advice on how to save even further.
If you discover that you can’t commit to paying existing debt, don’t skip your payments. Rather call-up your financial provider and explore other ways of paying. For instance, you might have chosen a payment holiday from your bank which helped or lowered your interest rates on your mortgages or vehicle repayments.
But you can also look at other options like restructuring your loans and debts – this can offer you much-needed relief which can free up some income for you.
Be strict on your credit card now
A credit card can act as a buffer in tough financial times. But you also need to protect your credit history. Try and use your credit card only when absolutely necessary and only for things you need and not want.
Whilst confined to home you might be using a lot of e-commerce platforms such as Takelot or Yuppie Chef or Loot. Now’s a good time to check if you have loyalty points where you can get specials and discounts.
Explore a side hustle
During lockdown in South Africa, it is not easy to create an alternate source of income; or to even start a side-hustle. But is possible. Here is a list of ways to make money online, perhaps it can help you release some of your hidden entrepreneurial skills. This might be a perfect lifeline for you in desperate times.
Try and avoid cashing out your investments and saving
If you are desperate, you might want to cash out your market-linked investments and there will be some fixed deposit cash savings products where you will be allowed to withdraw the funds before they reach their maturity date – there will probably be penalty fees though.
Before you do that, what about something like a payday loan? They allow you to borrow short-term cash in emergency situations and you simply apply online. It is always advised you, research lenders, for the cheapest rates and fees.
Sure, the current Covid-19 crisis has brought clarity to many South African lives on the really important things that matter. Millions have been forced to reconsider their financial priorities. Covid-19 has forced many to seek expert advice on exactly what to do with their money and also what not to do with their money.
As South Africa awaits further news from the president in a few days about the next Covid-19 steps, now is the time to take a deep breath and start serious financial planning. It can literally make all the difference whether, at the end of this dark tunnel, you see the light.
There is no shame in asking for help, because sticking together, planning, and helping each other are other great ways of overcoming this successfully.