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The overarching issue many South Africans experienced as the lockdown hit was the lack or reduced income and persistent debt payments. Gig workers and others who are unable to work during the coronavirus pandemic have had their pockets hit hard.
Whether you still have a portion or your full income, the decisions you make about your finances in this time are more important than they have ever been.
While we may be reallocating our finances to convenience purchases to create comfort for ourselves in this emotionally and mentally challenging period, here’s what to keep in mind when handling your finances:
Start or keep budgeting
First things first, you need to take stock of your income and expenses. Otherwise, you will be going through the month financially blindfolded and when you open your eyes nothing will be left.
READ MORE: Women share the worst financial mistakes they made in their 20s so you don't have to
Shafeeqah Isaacs, head of financial education at DirectAxis, says budgeting is always important and can help you make informed decisions about whether you should be looking to reduce your spending, try to save or invest a little more money each month.
“In the current situation, this is particularly important as people may not be getting increases, bonuses or commission payments. Others may not be able to earn an income at all or it may be considerably reduced. Drawing up a budget will enable you to better manage your financial situation and adjust your spending according to the circumstances in which you find yourself,” says Shafeeqah.
This exercise might feel a little bit like being back in accounting class filling in cash flow statements but maybe that is what it should resemble. As W24 previously reported, it helps if you physically write down your budget and not just keep a vague idea of it in your head.
READ MORE: 6 ways to make your money go further
Monitor you debt
If you can, pay your debts on time – otherwise contact your financial service provider. According to DirectAxis, skipping your monthly payments will negatively affect your credit score and will put you in breach of your contract with the lender.
Shafeeqah says, “In uncertain financial times, having a good credit score can be important as it gives [you] the flexibility to apply and qualify for various financial products and could also mean you receive better interest rates.”
READ MORE: Six things you should know (like it costs R90 000 a year to raise a child) before you have kids
Be prepared for medical emergencies
None of us are immune to Covid-19, meaning we all have to take precautions to stay healthy. The SA government coronavirus portal notes that 82 percent of Covid-19 cases are mild with patients only experiencing a slight fever, fatigue and a cough.
And that only about 6% of patients need intensive care. As you continue to figure out how to manage this risk, it is important to ensure that your medical cover is kept up to date.
How have you improved your financial planning during this lockdown? Let us know here.
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