Along with most aspects of life, you need to adjust your finances during this unprecedented time. Akash Dowra, Head of Client Insights at Discovery Bank, shares some tips and advice.
As an employee in a stable work environment, you are likely among those who are better off than those affected by the economic implications of the global COVID-19 pandemic.
While financial considerations have had to take a back seat to more pressing health issues right now, there are some measures of maintaining financial stability during this time.
- Use the time to analyse your budget
“Take any extra time you have now to draw up a budget. Reduce spending by working out the absolute necessities. As a collective, South Africans can contribute to flattening the curve by reducing spending that isn’t entirely necessary. This is in line with restrictions on what you can buy right now,” says Dowra.
- Make sure you’re adequately prepared
“Insurance, in all forms, is now more important than ever. Cover your family for unlikely events, like a burst geyser (which has happened to me this week), as well as long-term cover. Our Vitality Money clients receive incentives for ensuring they have these measures in place because it encourages behaviour that is better for them and the country in the long- and short-term,” he says.
- Save as much as you can
If you are able to, now’s the time to set up an emergency savings fund. “There is global uncertainty about the extent and reach of the pandemic on all aspects of life. But there are positives. Interest rates have dropped. You are not spending on transport costs, and possibly receiving discounts on services while working from home. Save the extras if you can afford to. It will help create a financial buffer for later on,” says Dowra.
- There is some certainty for your comfort
Dowra says there are opportunities to maximise good returns in the market right now. “Go to those suppliers and service providers whose role it is to take care of your finances. Your financial advisers, bankers and so on will direct you to the best returns available. For example, fixed deposits rates and returns on lazy balances (these are positive balances on cash in transaction accounts which don’t accumulate much interest) can be improved.”
- Keep a level head
“In times of crisis, there’s a tendency towards rash and hasty decision-making. Now’s not the time to disinvest pension funds and pause savings, which will impact you later on. Keep tabs on your finances, perhaps with your banking app, and be assured that there are options out there to help maintain stability as this unfolds. This is a stressful time and you shouldn’t be worrying about finances unnecessarily,” says Dowra.
- If you have a problem, there are solutions
“Service providers, the government, business rescue and the unemployment insurance fund are there to assist with solutions if you find yourself in difficulty. Speak to a qualified person who can direct you toward these solutions,” he adds.
- Give back
“Now more than ever, if you are able to assist someone in need, on a business or individual level, you should. Continue to pay those you supported previously like informal helpers and local businesses. Discovery Bank has given clients the opportunity to donate Discovery Miles or cash using the Discovery Bank app directly to the Solidarity Response Fund, which will assist those in need of medical care, business rescue and more,” says Dowra.