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Managing your finances during the lockdown: Securing your stable income

Written by Anni-Mari van Wyk

On Apr 24, 2020

Our lives may be disrupted, but that doesn’t mean our finances should be too. Being told to sit on your hands and wait while uncertainty swirls around you can just add to your stress levels. Firstly, it is very important that during this time, you take note of how fortunate you are to be having a stable income and for you to keep that income; you have to work on managing it responsibly.

Taking some practical steps to manage your consistent/stable income can give you a better handle on your finances right now.

Here are some tips I have put together to help you best manage your money during a time of crisis like what the world is faced with.

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1. Manage your savings. 

If you have savings tucked away, you might want to just sit tight and keep any savings you have available in case you encounter unexpected changes to your financial situation—and consider continuing whatever saving-up you’re already doing, if you can, to support your longer-term needs.

If you haven’t started saving; remember to start small. Every Rand counts. All you have to do is just start!

2. Control your debt and expenses 

Credit cards – If you have credit-card balances, see if you qualify for a card with lower interest (or a no-interest introductory rate) and transfer your balances from higher-interest cards. Also, remember to only use your credit cards ONLY when you need. The aim is to have minimum to no debt.

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Manage your mortgage (home-loan/finance) -Have a mortgage? Refinancing at a lower rate can not only reduce your payments now, but help you spend less on interest in the long term. Try reducing your mortgage as much as your cash flow allows you to.

DO NOT pause or stop on mortgage payments due to the lockdown. The more you pay, the more your debts get reduced.

Pay your bills –Remember to pay all outstanding short-term expenses on time. This includes your rent, kids school fees, your helper (even when they are not coming in for work during the lockdown; they still need income to survive). You should also look for more ways you could reduce your other expenses such as phone plans etc.  

3. Manage your budget 

Taking control of your spending can help you weather both the concrete challenges and the stress of the unknown. For you to maintain your cash flow sustainably, you need to be able to properly plan and stick to your budget. How?

Shop smart

–         Reduce waste and grocery bills, centre your list on what you NEED not what you want. (refer to my needs vs wants article to understand the difference between the two and how to prioritise each)

–         Consider picking up just a few things you’d need if you had a winter bug, like cold medicine and cough drops. If you take a prescription medication regularly, give your doctor a ring to ask if you need an extra supply—and be sure to call your medical aid holder to make sure they’ll cover it

You might be surprised at how much you already have in your house to keep you comfortable while saying in. Do an inventory of what’s right under your nose before you run out to buy more.

4. Add into your emergency fund 

If you don’t have an emergency fund in place yet, it is best to start thinking about getting one while you still have a stable income flowing in.

An emergency fund is set up to help you cope/deal with unexpected emergencies where your income can’t help.

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5. Save on entertainment 

Find creative ways to have fun when your plans have to change. The money you save on going out can drastically boost your budget or emergency savings—and keeping in touch with the people you love makes weathering the storm less stressful.

Create more virtual connections with your loved ones using mobile Apps such as the house-party for fun or use something like the Netflix Party extension for Chrome for a virtual movie night with friends from afar.

Focusing on your budget right now can help you feel more in control of your finances in the midst of uncertainty

Try to keep in mind that the current storm we are all going through, while distressing, is temporary; the world tends to weather disruptions and return to normal again at some point. I certainly do hope that these tips will come in handy and help you get in control with what you can, while you can.

Drop me an email if you need some assistance with processes in your business to help you during this time.

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