Relook your budget
This is first step to look after your financial health. To do this you need to check that your budget contains 3 key elements:
Then see what has changed since lockdown, whether there has been a change in your income or expenses.
See where you can save money
Since lockdown started, you have probably already saved on a number of expenses like petrol, parking, take-away coffees and eating out. Now’s the time to relook all your memberships and subscriptions and cancel the ones you do not use.
Being at home 24/7 comes with added expenses like paying more for using more electricity and water. See how you can minimise these expenses. As the days start to get colder, dress warmly and use blankets instead of putting on a heater. Watch your water consumption by keeping your showers short and only washing full loads of (dirty) clothing.
Do not forget about your food bill. Organise your kitchen and create meals around expiry dates to avoid wasting food. Only buy what you will use before your next shopping trip. Frozen vegetables last a lot longer than fresh ones.
Write a list of all the things you can live without
Living through lockdown has shown us that we can live without things we never imagined possible. What luxuries have you discovered you can do without? They fall in the “wants” category and do not count as needs. We can live without wants.
I Owe Money That I May Not Be Able to Repay During this Time. What Do I Do?
Covering rent or a larger expense during this shutdown period is going to be difficult for many. Understandably, the best thing to do is to communicate with your lender, landlord, or bank who you may owe money to. The sooner you do this, the better, as they will likely discuss options with you regarding repayments or a payment plan.
Debt counselling is also an option to pursue if you would like further information on how to create a money-management plan and manage the repayments to those who you owe.
I Need to Borrow Money
If you do not have any savings and are facing an emergency cash shortfall, borrowing may feel like your only option. Try to use borrowing as a last resort and if you need to borrow, make sure you choose the right type of credit or loan for your situation. Avoid loan sharks and unscrupulous lenders, otherwise, you could find yourself paying more than you need to.
If you’re able to borrow some money from family or friends who can lend you the extra cash, this could be a cheap way of getting extra money without resorting to Payday lenders or other types of high-cost credit. They are also likely to be more flexible about how you pay the money back.
Whichever way you borrow money, ensure that you have an agreement in place though, as this will help minimise misunderstandings and clarify repayment terms.
Can this Be an Opportunity for Me to Make Money?
While the outbreak of the virus is universally negative and may deter many from earning potential, it also is an opportunity to save.
If you are still receiving your salary but unable to work, try to utilise it as effectively as possible. Implement the budget tips we mentioned above by cutting all non-essential costs, keep spending on food and groceries to a minimum, and exercise restraint.
With travel costs and extra-curricular activities now at a minimum with affected businesses being in lockdown, use it as an opportunity to save those funds.
If you have the means, there may be additional work income during this period. If you have internet access, look for remote work opportunities, such as data capturing, administration assistance or online teaching. These side hustles can help provide you with extra work and cash during this period.
Tip: With the repo rate dropped by a full 1% it means you will save money on your home and vehicle loans. Use these monthly savings to:
Remember to practice being frugal and monitoring your expenses during this period and utilise the resources you have available to make the best decision for the coming months. Do not overbuy or let fear dictate your financial decisions.
Now is a time like never before to take action over your financial wellbeing and credit health.