Minimising the long-term impact of Covid-19 on our household finances is critical at this time.
Photo: File
Minimising the long-term impact of Covid-19 on our household finances is critical at this time. Photo: File

How to sanitise your finances

By John Manyike Time of article published Mar 31, 2020

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DURBAN - Living under lockdown is a new experience for South Africa and other countries across the world struggling to contain Covid-19. 

As we adapt to this new reality, it is important to actively manage some of the financial stresses that the lockdown presents.

The financial impact of the lockdown will be with us long after it is lifted. Minimising the long-term impact of Covid-19 on our household finances is critical at this time.

Food, stress and health

At the most basic level the lockdown, and all the unknowns that it presents, has added unprecedented stress to South Africans already battling an economic recession. Stress and anxiety often drive up the consumption of comfort food and binge or boredom eating. The time is now for #foodportionmanagement.

Excessive food consumption is not only unhealthy, undermining your immune system, but it also results in higher grocery bills. Managing your food consumption responsibly over the next three weeks is key.

Remember too that whenever you do need to go to the food stores, you are required to observe the social distancing protocols that have been put in place to lessen the risk of the virus spreading too rapidly for hospitals to cope.

Data and electricity costs

Working from home requires more data and electricity. Entire families at home 24/7 will translate to a spike in television watching, live streaming and social media activity for entertainment as well as online learning.

While some network providers have announced they will be slashing data prices significantly, it’s still worth checking out which package will be most suitable for you and your family based on usage patterns.

With everyone being at home, your data usage is likely to increase and will be felt on the pocket depending on the type of package you are on. To help control costs if you don’t have uncapped data, consider rationing daily allowances for the children. This will not only save costs; it will also ensure they don’t spend an excessive amount of time in front of electronic devices.

Providers also have specific times in which data usage is cheaper, but this may vary from one provider to another, so it’s worth getting in touch with your service provider to check what your package offers.

Take basic steps to ensure you limit data usage costs:

1. stream from a single device

2. download content during non-peak time

3. limit streaming high definition content where possible

4. if you’re on a cell phone contract, monitor your voice and data consumption to avoid sky-high bills

Increased financial responsibilities

Many families in South Africa are already sandwiched between supporting their children and helping to care for elderly parents or relatives in need. The lockdown will almost certainly expand this wide network of dependents.

There may be many more mouths to feed during this difficult period. The first step to managing a budget that is stretched is to have a frank and honest discussion with your family and explain what is possible and what isn’t. Make sure they understand that you will only be able to cater for essential items such as food and other necessities.

When you draw up a budget and have to include other family members in your expenses, prioritise the most important costs first. For example, if you usually cater for a family member’s transport costs, let them know that as they won’t be travelling much during the lockdown, you will make an allocation only for food and electricity.

It’s hard to predict if the viruss will be brought under control within the lockdown period or if it will need to be extended. What’s evident is that unless we are prudent with our finances right now, this period will have prolonged financial implications for most households.

Use credit wisely and responsibly

While it is never advisable to buy food on credit, it may be unavoidable over the lockdown period.  However, proceed with the utmost caution and only borrow what you will be able to repay.

South Africans should consider approaching their banks and other institutions in the regulated financial services sector to help support them through this crisis. Credible institutions are coming up with creative ways to take the pressure off some of their most vulnerable customers.

Time for bold decisions – not drastic action

If your budgeting shows that you are going to be short of money be prepared to cut costs. Live on more affordable food. Eliminate big-ticket purchases that you don’t really need.

He adds that lockdown is not a time for job-hopping, since we don’t know what the long-term implications of lockdown will be. Now is not the time to be leaving a secure employer for another that may not be around in six months’ time.

Taking safety measures to protect your financial health and being as strict about this as you are with your physical health, can help you get through this challenging time with your finances reasonably intact.

John Manyike is the Head of Financial Education at Old Mutual


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