Belabouring the benefits of sticking to a budget now seems condescending. After all, according to a recent survey, 78% of South Africans believe that the pandemic will have an effect on their personal and household income.
The economy is struggling, job security is anything but secure and any semblance of structure is now null and void.
That said, Susan Steward from Budget Insurance points out that in times of uncertainty and crisis, having a budget in place can actually assist inreducing anxiety and help South Africans feel more in control.
“The pandemic will truly test our ability to make every rand and cent go exponentially further,” says Steward. “However, with some careful planning and commitment, we can not only survive these unprecedented times, but get into a savvy money management habit that’ll keep us financially fit beyond Covid-19.”
Budget Insurance offers these practical budgeting tips for Covid-19 and beyond:
The first step:
Draw up a list of your fixed expenditures and other monthly deductions and tally these up against your income. If your income has been affected by the coronavirus, you need to plan how you are going to reduce your expenses. For example, if your income has been reduced by 20%, you need to trim 20% off your expenditure.
Don’t make any sudden moves:
When we are in a fear based mode, it’s best not to make any grand, long-term decisions. Some areas are easier to trim down than others so concentrate on them first. Remember, even the smallest adjustments can make a meaningful difference over the long term.
Focus on the essentials:
Once you have trimmed-down on your non-essential expenses – take a look at your fixed or essential expenditure. Paying your bond or rent and keeping the lights on should take precedence. Is there a way you can negotiate on the payment terms until things settle down? Most providers are offering their customers some form of relief and flexibility, including Budget Insurance. In addition, Budget Insurance has launched Budget Lite, which provides three levels of non-comprehensive cover for cars. A smart way of staying insured without paying as much.
Nice to haves:
During lockdown, the money you set aside each month for nice to haves like clothes, eating out, travel and entertainment should be channelled into paying off your essential expenditure.
Earn and use your freebies:
Chances are that you’ve been racking up quite a bit of moola or points on your rewards cards. Now’s the time to use them.
Start or expand a side-hustle:
Think of the things you’re good at doing or creating and consider how you can monetise them, online.
Turn your clutter into cash:
Lockdown gives you the perfect opportunity to declutter. You could earn a healthy amount of money from the things that are just taking up space. Advertise them now for delivery post lockdown.
“Ultimately, smart decisions now will go a long way to avoid a crisis turning into a complete disaster,” concludes Steward.