Keeping your bank balance healthy during COVID-19
26 Jun 2020
By Katya Stead
The onset of the COVID-19 pandemic saw South Africans rush to care for the physical health and safety of themselves and loved ones, particularly those forming part of the population most vulnerable to the virus, such as the elderly. However, there is another thing increasingly vulnerable to the effects of COVID-19: your budget.
Regardless of the current or coming health effects of COVID-19 on you or your family, the pandemic has affected and will likely continue to
affect household finances for years to come. Having a plan, prioritizing spending, and using resources efficiently will be key to your financial stability.
Budget constraint 1: fuel
Just as workplaces reopen and we all make use of cars and public transportation again; fuel prices are expected to rise. Not only does this mean it’s more expensive to run your car, fuel increases also add to the already escalating price of food and taxi fares.
Clever budgeting trick: Maximise savings on entertainment
While essential items like food are getting more expensive, many households above the poverty line are saving money because, quite simply, there’s less to spend on. Those who usually hand over a chunk of their hard-earned money for restaurant dinners, going to the movies, cigarettes and expensive hairdos now have no choice but to save that money. This may not be good for the economy, but it helps the individual’s pocket in a tough time. It is true that spending on essentials at this time is an essential.
Budget constraint 2: food
One of the more dire downsides to COVID-19 for financially struggling individuals is the escalating price of food. A recent report by the Pietermaritzburg Economic Justice and Dignity NGO states that a basket of essential groceries
increased by more than R250 in just one month between March and April 2020.
Clever budgeting trick: Careful grocery shopping
This means that careful budgeting and financial planning is critical to keeping food on the table for most South African families impacted financially by the pandemic. Be mindful of what food items your family really needs and what are unnecessary luxuries. Even if you are not as financially constrained as some, budgeting and financial planning is still important as the price of food has gone up and many days are spent at home and not eating out.
Budget constraint 2: electricity
As the bite of winter sinks its teeth in, electricity prices are heating up just when it will be needed the most. And, with most industries open again, the looming threat of Eskom load-shedding is not gone. To add to this, data prices have become more expensive for smartphone users, which adds just another additional pressure to the already-tight budget COVID-19 is placing upon the consumer.
The need for good advice
Thanks to COVID-19, it is clear that life has changed significantly, whether for better or worse, and will remain changed for many years to come. This highlights the need for sound financial advice – not only to navigate through this difficult period, but also to recalibrate financial goals, taking into account the current situation we are facing and the future we all anticipate. The same financial benchmarks and goals set even as recently as six months ago – and certainly those older than that – will need to be reviewed in light of the historic changes that COVID-19 brings. The good news is that, with sound financial advice, you’ll be able to weather many budgeting constraints and come out of COVID-19 with your budget and financial goals nice and healthy.
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