Keeping yourself and your finances healthy
01 Apr 2020
We live in uncertain times. It just seems like regardless of our level of preparedness, there are always external factors that seem to derail our attempts to plan. Whether its load shedding or the latest scourge of COVID-19, things keep changing. However, we cannot allow this to stop us from being wise with our financial planning because regardless of how bleak the future may look right now, going in without a plan is not advisable as it could result in one making poor financial decisions.
As consumers we are financially under pressure based on a number of factors including the issues mentioned above. As a country, we have seen slow economic growth over the years which have meant that we have less money to spend. It is at times like these where it's very important for us to stick to our financial plan in order to avoid acquiring more debt.
We have recently seen in the news and social media the rapid rise in Coronavirus infection numbers this poses the possibility of a total shut down. The news has sent consumers on a panic spending spree to stock pile groceries and other supplies. In as much as the panic is understandable, it may have negative consequences to your finances after this phase has passed, especially if consumers are using credit to do the stockpile buying and not an emergency fund. Keeping a reasonable reserve of food and other supplies makes sense for all kinds of emergencies, but it is important for your financial plan and your community for you not to hoard things you do not need.
Here are some useful tips on how to stick to your financial plan during a pandemic from cnbc.com:
Leave your savings and investment alone - in every previous health scare, the markets reacted negatively, and over the course of three to six months after the initial shock, markets returned to normalcy, and in most cases the markets produced a positive return. Keep the long term picture in mind and speak to your Financial Adviser.
Create or increase your emergency fund - work on building an emergency fund of six months' worth of expenses. It should only be used for real emergencies such as a job loss, and it is set up to help you protect your life insurance, retirement savings and other investments
Support others - if you are able to, use your money to help friends, family and your broader community who are less fortunate. Support your local small businesses which may be impacted by the lack of feet in their premises due to movement restrictions.
Financial planning is a long term process which should ultimately become part of your lifestyle, so do not be hard on yourself when plans are sometimes derailed due to factors out of your control. What counts is your ability to swiftly get back on track and maintain your financial stability.