How To Manage Your Finances During The Coronavirus Crisis


Hey ladies, how are you holding up? Who would have thought that 2020 will be so heavy following the introduction of the Coronavirus Crisis?

Things got pretty real for me when I saw via social media food and essentials being completely wiped out from our grocery stores shelves. Seeing the panic like that was shocking.  And what's even more problematic is that there are still more potential downside risks posed by the outbreak given its unknown magnitude and duration. Our government has already closed down schools, and is blocking foreign visitors and banning gatherings of more than 100 people. Still, there is hope that warmer weather across much of the continent will help suppress the virus. And the World Health Organization announced Wednesday that it is launching a multicounty clinical trial to test four drugs as potential COVID-19 therapies. A drug called chloroquine, widely prescribed anti-malaria pill that was first approved in the US in 1949 has shown encouraging signs that it may work to fight the virus.

Economists and financial experts are saying that while it’s not yet a doomsday scenario (SARB cut interest rates by one percentage point, from 6.25% to 5.25), the South African economy is in for a rough ride and may shrink as a result of the Covid-19 pandemic. In addition we were already in a financial crisis because of debt, government incompetence and corruption. And let's not forget the annoyingly disruptive load-shedding by Eskom and the chance that Moody’s could downgrade SA later this month.

Taking control of your spending can help you weather both the concrete challenges and the stress of the unknown. But there are things you can do now to both help yourself and help others.

1. Stock up smarter. Before you go to the grocery store, take stock of what you already have. It’s so easy to forget about what is shoved in the back of the cabinet or freezer. You might be surprised about what you find. This can save you money, prevent you from leaving the house, and still provide you with the nourishment that you need. Plus, you’ll be able to finally use up the staples you stocked up on but never used. Also, try to keep your non-essential spending to a minimum and prioritize the essentials only. Remember to use hand sanitizers the stores provide when you enter and leave the stores. And stand three feet away from the next customer while standing in the queue.

2. Shift money as needed. Depending on your situation, you might find yourself with some unexpected expenses—like a babysitter because schools are closed. This is exactly what emergency funds are for—so if you have one, don’t hesitate to use it.
On the flip side, if you have a reprieve on certain expenses (like spending less on petrol because you’re working from home), tuck that money into your emergency fund (or start one now!) so you’ve got a sense of security.



3. Don't add to your debt. Going into debt should always be a last resort, so use your credit card wisely. If you absolutely need to charge a few things in a pinch, consider making a plan for paying off that debt when your finances allow. We don’t really know how long it will be before it’s safe to resume our normal lives, so make sure you have as much money socked away as possible.

4. Save on entertainment and stay connected to friends. Find creative ways to have fun when your plans have to change. The money you save on going out can bolster your budget or emergency savings—and keeping in touch with the people you love makes weathering any storm less stressful.

5. Be aware of potential scam attempts. Scammers look for opportunities to take advantage of the vulnerable, especially during times of emergencies or natural disasters. Be cautious of emails, texts, or social media posts that may be selling fake products or information about emerging coronavirus cases.

6. Do not touch your investments. Don’t even think about withdrawing your money. Efficient Group economist Dawie Roodt offers a word of caution: Don't get emotional and call your brokers to sell all your stocks and shares. Just ride it out, it is all we can do to survive this bad period.

Try to keep in mind that the current period, while distressing, is temporary; the world tends to weather disruptions and return to normal again at some point. I hope these tips will help you find your footing during these confusing times. 

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