How to budget smart during the Covid-19 pandemic

Lifestyle - Covid-19 has turned the world over. Many people have been laid off with no pay, some with reduced pay. Breadwinners have become non-existent in households due to unemployment.

Government have been trying to assist and rightfully so, from the poorest working itself up to the poor. So where does this leave you and I? To fend for ourselves? To get assistance from family? Or to make use of some of the relief programmes offered by the private sector.

Your commitments at the end of every month have not reduced despite your salary or work-days been reduced, or at worst lost. These have to still be met.

This article attempts to offer some tips on basic financial housekeeping to get you through Covid-19.

On a positive note, Covid-19 offers an opportunity to get to know and hopefully understand your expenses. A clearer view of your expenses might help you adjust your spending habits as you might have found out by now there are many things you are doing without and could continue to do without.

Start by creating a newly adjusted budget that factors your Covid19 situation. Those unnecessary trips to the supermarkets and convenience stores that you were forced to accept, fuel costs, eating out, trips to salons and spas, entertainment, gym fees, cell-phone costs and movies are items you can cut down on moving forward.

Non-essential shops being closed restricts your movements thereby forcing a change to your spending habits, a nice problem to have. You need to factor in buying more groceries than you normally would for the week or month while the entire family is home-based and probably going to eat more but cost less as they will not be eating out.

Covid19 also gives you added time to study your bank statement in detail by scrutinising your debit orders, debits that you may not be aware of and auto-renewing subscriptions you may have. Assess whether there are any non-essential expenses you will be able to cut back on. Quite an exercise but one that will help you understand that you cannot spend more than you earn!

Talk to your creditors when you cannot pay or cannot afford repayments. I can assure you they may already have relief programmes in place since they also want to survive as a business and do not want to lose you as a client.

Here are some tips:

*Prioritise your bills:

Bond payments for homes, your car instalment, school, and university fees and lastly credit card repayments are obligations you have to meet - today or tomorrow when it becomes unaffordable with large amounts of interest. A good starting point would be to contact your creditors to make a payment arrangement and seek some level of relief. Not contacting them and simply not paying will not resolve your problem, in fact it will actually complicate it further. Communicate with them to see if they can adjust your repayment plan to what you can afford.

Save where you can:

Spending habits change during this time, you will probably be cutting back in areas, like entertainment for the kids, clothes shopping or visiting the hair stylist. Take the amount that you would normally spend on these activities and place it in a savings account or increase your bond or car repayments. This will not only provide you with a buffer during these uncertain times but can also help to build up emergency savings.

Get Techno Savvy:

Essential financial services will be open such as Bank branches and ATMs however it is best to limit your exposure to the Coronavirus. Instead of visiting a physical branch or an ATM, you could access banking services via any of Bank's digital banking solutions i.e. cell phone banking, internet banking and banking apps.

Beware of cybercrime:

It is trying times for all including criminals whom as you may have noticed are trying every trick in the book to access your monies. Homebased work-stations in the changed environment lacks security that is normally available at your employer, and they are aware of this. It is easier to hack into your network than before. As most of us will be using digital and online services, make certain your antivirus software is up to date. Fake websites and requests to make changes to your banking accounts and profiles become the order of the day. Requesting personal information and mobile authorisations from you can be used to access your personal bank accounts. Never provide your personal information, PIN, or password telephonically or by email. Also try not to use public computers to do your online banking as these computers store your history. To remain on top of your game in these trying times requires vigilance.

It is important to note this pandemic will pass and not to panic during these tough times. Panicking always leads to rash financial decisions, which could have a drastic impact on your finances in the future. Here are some more tips:

Bond and car repayments:

If you have been affected and your account was previously up to date, and you need help to get through the next few months with a reduced instalment, it is advisable to approach your service provider as they may already have relief programmes in place to assist you.

School Fees:

The Basic Education Department has said parents are still required to pay school fees during the national lockdown. Parents are worried as this could see them in a tight financial situation as some businesses remain closed. The department’s spokesperson Elijah Mahlangu said they would communicate options for a relief plan should the need arise in the near future. By writing to the chairperson of your child's school governing body advising of your present financial situation to seek relief for the lockdown period or longer, depending on your financial standing, is something one should strongly consider. The body may excuse the payment in full or could get into an arrangement with you to pay the fees over a period of time, as you may afford. As a school, they will also need to function and would rather have a commitment from a parent to pay any outstanding amounts rather than not getting the amount at all.

Do I pay the rent for the home I rent in during the lockdown?

There is a letter doing its rounds on WhatsApp which says you do not need to pay your rent during the lockdown period signed by the President on his letterhead – this is FAKE! For your own sake, please ignore this! Cape Town-based attorney Marlon Shevelew, who specialises in property law, says the lockdown will make it impossible for either the landlord/rental agent or the tenant to stick to the terms of the rental the agreement they signed. Therefore, almost everything gets put on hold - moving in, moving out, exit inspections, cleaning units pending vacating it, even evictions. The Disaster Act regulations prohibit people from moving into or out of residential dwellings during the lockdown, Shevelew says.

So, can a landlord demand full rental from a tenant even if they have lost most or even all their income because of the Covid-19 pandemic Shevelew said that would not excuse tenants from meeting their rental commitments in terms of their leases.

What should one do? There is nothing wrong with approaching your landlord and explaining your situation to them. Even they are experiencing this pandemic and the lockdown. Communication is key in that it allows both parties to reach an agreement on how the obligation is going to be met. There is no getting out of paying your rent, unless your landlord is one who understands the situation with empathy and makes a special concession.