Financially Adjusting After Lockdown I am sure for many is very hard. COVID-19 lockdown took almost all of us by surprise, and many did not have the contingency plans in place in terms of finances (even though they had probably been advised to in the past). As a result, some people ran into – and may still be experiencing financial difficulties as lockdown slowly begins to ease.
This is not something to recriminate yourself for too much though. It’s happened to people all over South Africa and indeed, all over the world. What this is is a chance to finally start taking the long hard look at your financial life that always meant to get around to and implement some relatively simple and easy to implement measures to not only help you get back on a better financial footing now but be far better prepared if something like the COVID-19 lockdowns ever happen again.
To help you get started here are some pointers:
Financially Adjusting After Lockdown
Develop New Habits
Following the lockout it will be a good idea to create a budget that, if needed, takes into account any extra payments you will need to make that may have been deferred, while still staying current with ongoing obligations.
This may mean making some deep cuts, but, in fact, these may not be as painful as they might have been, as many people have been passively saving money, whether they realise it or not, thanks to the fact that restaurants have been closed and the options for social spending (coffee shops, mall trips) have been practically nonexistent!
Having more savings does not mean having more to spend when things open up again though. Yes, a celebration dinner is probably in order, but if you’ve survived this long without Starbucks and Nandos (and saved a surprising amount of cash by doing so) you can continue to do so and funnel any extra cash into your savings. Which brings us to our next point…
Financially Adjusting After Lockdown
Set New Savings Goals
Life has changed a lot as a result of the global pandemic. Some savings goals may remain unchanged: buying a home, saving for the kids’ education, or starting to save for retirement, for example. But, if there is one thing the coronavirus crisis has made very clear, you need to have a rainy-day fund as part of your financial goals. This emergency cushion will help you face unexpected financial events such as those we are currently experiencing.
Starting with that money you’ve saved while being confined to your home, start ramping up your savings plans. But don’t just add more cash to a simple savings account. Meet with a financial advisor and let them help you determine the best ways to help your money grow that will still allow it to be easily accessible in a crisis.
Financially Adjusting After Lockdown
Take Advantage of the Benefits of Switching to Digital
Everyone, across the world, has spent the past weeks and months adapting to doing a lot of new things online and with the aid of software and apps they may have never used before. Or even knew existed.
And this has its good and bad sides. Being able to keep working online during a pandemic lockdown; good. Being tempted to overspend on things you don’t really need because you have discovered dozens of new online shopping outlets online; maybe not so good.
One thing that you should keep doing online even once lockdowns end is maintaining your everyday financial life. Stop wasting trees with paper checks and autopay your bills online instead. Stop leaving saving to chance and have a portion of your salary paid directly into the savings account of your choice instead. And stay in the habit of checking your balances online often to avoid unexpected surprises and costly overdraft fees.
Financially Adjusting After Lockdown
Lockdown has been tough in many ways, but there are lots of lessons that can be learned from it, including how to manage and grow your money better, and now is a great time to start learning. I think many of us have realised we need less than we thought we did, that there are other ways to earn income, that further education may provide further opportunities. In many ways, the lockdown has provided a refresh to your goals both financially and physically. Get help refining your financial goals by speaking with one of our independent consultants today.
Investing Post Coronavirus