Coronavirus: How to minimise its impact on your wallet
The coronavirus (Covid-19) has impacted various facets of life since it reached South Africa, and household finances will not be spared – but it’s important not to overreact and make panic purchases or hasty financial decisions.
“The urge to stock up on groceries is natural given the uncertainty and anxiety the pandemic has caused.,” says John Manyike, Head of Financial Education at Old Mutual. “But you need to resist that urge, because over-spending could break your wallet. Retailers are unlikely to run out stock because of the virus, and much of what you pile into your trolley, such as perishable products could go to waste especially with load-shedding still lingering and your financial wellbeing could be severely compromised if you haven’t planned or budgeted properly.”
Be mindful too, he says, of the impact of the early and prolonged closure of schools on your pocket. This step by the government, aimed at slowing down the spread of the virus, means children will be home for longer periods. This may result in increased spending to help keep them fed, entertained and occupied. It will also have a ripple effect on the rate at which household items get used up. Snacks, cleaning products and electricity generally last longer during school terms.
Manyike’s good advice to consumers includes:
Avoid taking out loans to buy in bulk. The nature of this pandemic is terrifying; however you shouldn’t be making financially crippling decisions that may lead to unnecessary debt. Load shedding is still among us, what will happen to all the perishables you may have bought if you have limited electricity supply? The best approach is to monitor the situation closely daily without making long-term decisions.
Download educational games on phones and laptops. Line up educational games and activities you can engage in as a family and to keep the children’s minds stimulated. Network providers are also starting to lower data costs as part of their response to the Covid 19. This will go a long way in making this exercise affordable.
Be Proactive and approach your credit providers. If your household income is affected due to the vulnerability of your industry. Particularly if you anticipate that you will struggle to service your debts, don’t wait for debt collectors to knock on your doors. Make arrangements in advance.
Cultivate a culture of responsible consumption. Money, food, water and electricity must be used sparingly during these uncertain times as we do not know how long it will take to contain the virus. Other countries in the world were forced to completely shut down to limit local transmissions of the virus, therefore responsible consumption cannot be overemphasised. Avoid any form of wastage.
Check your insurance and medical aid. Make sure you know what medical and insurance cover you have in place, and whether it applies during a global pandemic. If you have travel insurance, make sure you understand all the terms and conditions it stipulates, if you don’t, contact your insurer immediately.
Take a long-term view when it comes to investing. Don’t get tempted to disinvest because of panic. Markets are generally volatile during uncertain times, but this is temporary.
Be vigilant. If you display any of the flu-like symptoms and suspect you might have Covid-19, please call your doctor or call the public hotline number on 0800-029-999 immediately.
“This is the first time most South Africans have had to deal with the reality of a life-threatening pandemic, and everyone is justifiably shaken. However, it’s important to avoid rushing into decisions, especially as it relates to finances. It’s hard to predict how long the virus will be among us, and for this reason we should not guard against making rash and irresponsible financial decisions,’ concludes Manyike.