South Africans across the country are adjusting to a new way of life, staying at home and doing their bit to help stop the spread of COVID-19. And while flattening the curve is a priority during the national lockdown, many people are understandably concerned about their finances. With businesses temporarily closed, income streams are disrupted and not necessarily guaranteed. So, in these uncertain times, LAW FOR ALL wants to step in and help ease your mind with tips to help you keep “control” and manage your money in the time of COVID-19.
Of course, no one wants to run into financial difficulties, increased debt or legal action, so it’s best to be proactive when it comes to your financial responsibilities. So start implementing some savvy saving and penny-pinching measures immediately.
Here are some thought-worthy ideas and tips to manage your personal finances:
1.Reassess your budget.
Use some of this lockdown time to draw up a new budget with a strong focus on saving. If you do not receive a monthly bank statement, email your bank or check your banking app to find out how to obtain one. Go through all your transactions and expenses to give you an idea of where you can cut back. Mark the spending trends that are luxuries or nice-to-haves. Keep in mind that you won’t necessarily be spending as much money on fuel, eating out, and entertainment during the lockdown. Reallocate the funds to bump up your savings or help pay off your debt. That way, you will have a financial buffer and some form of emergency fund available in times of need.
2. Get savvy with your salary.
With the economy under tremendous stress, most businesses are re-evaluating how they are going about doing business. Companies are also considering how they will pay staff during and after the national lockdown. If your employer has no choice but to reduce your salary significantly, kick into action immediately and look into how you can make the previous month’s full salary stretch a little further. Start saving now, because you may have to prepare for a salary cut or even retrenchment.
3. Check if you are eligible for a “payment holiday.”
If you are looking for some form of debt relief during this lockdown period, check in with your bank immediately! Yes, for a short but crucial time, the banks are offerings customers, students and businesses temporary debt repayment relief. This means that you could feel less of a financial burden regarding car finance, home loans, credit cards and short-term loans, amongst others. Of course, don’t rest on your laurels and assume you automatically qualify for relief. Instead, take action and check with your bank so that you can stay in charge and effectively manage your money in the time of COVID-19.
4. Continue paying your creditors.
If you can continue paying creditors or honour debt agreement payments, go ahead and do so. Keep the bigger picture in mind. Even if you qualify for some sort of relief, you will incur interest on those accounts and face complications later on. If you simply can’t pay your debt, communicate with your creditors and other relevant service providers to be transparent about your financial situation.
5. Renegotiate your rent payments.
A large chunk of most people’s income goes towards monthly rent. But, in cases of no guaranteed salaries and disrupted wages, it advisable to speak to your landlord about possible temporary relief. This can be anything from a reduced rental amount and increasing the rental period to make up for the outstanding funds. Of course, you should never just stop paying rent, assuming the landlord will understand your circumstances. Not only could you find yourself in some legal trouble that will add to any financial strain, but you could also end up being evicted.
6. Talk about child maintenance payments.
Many South Africans pay monthly maintenance orders to help provide food, education and medical support (to name a few) for their children. If you are feeling the financial pressure, this payment is not something you should forfeit. Not only can defaulters now be blacklisted, but they could also face time behind bars.
Now, more than ever, parents need to work together and investigate whether or not monthly payments can be temporarily reduced. Keep in mind; some expenses may not be a priority at the moment as our day-to-day living is significantly altered. The well-being of the kids should always be the top priority, and essential consideration when you manage your personal finances during the COVID-19 pandemic.
7. Don’t let desperate times call for drastic measures.
When the cash flow is running low, it’s understandable for many to reach out and ask for help. If you are considering asking friends or family for some money to tide you over, it’s best to put it in writing that stipulates the terms and conditions of paying the amount back. Yes, there are instances where people feel as though their only option is a “loan shark” or mashonisa. In most cases, these are illegal and unregistered creditors. And because they operate unregulated, they can charge incredibly high interest rates (30%-50%). What’s more, they often resort to violence and intimidation to get any unpaid amounts back. Instead of going down this dangerous path, look into whether you qualify for the new COVID-19 temporary employee relief scheme.
8. Request a ticket refund and postpone or cancel your holidays.
The world is pretty much at a standstill at the moment, and travel bans have been implemented around the globe. Luckily, the money you spend on a bus, plane or train ticket isn’t necessarily lost or wasted. Many of the major airlines and operators are offering travellers free cancellations or changes. If you have paid a deposit to book accommodation, you should be able to get some cash back (minus a reasonable cancellation fee of course). The Consumer Protection Act protects you from businesses that try to pull the “blanket non-refundable deposits” card. This is illegal.
9. Reach out to your caring friend during (and after) the lockdown.
LAW FOR ALL is keeping the law working for you and remains fully operational during the national lockdown. Be sure to get in touch with our award-winning legal team for caring legal help that will help you stay in control and effectively manage your money in the time of COVID-19. Our legal professionals are on stand-by with sound legal advice or to negotiate on your behalf. Remember, for COVID-19 updates visit Government’s official portal.