by Sylvia Walker, author of SmartWoman
The world is in crisis, grappling with a new reality. With lock downs and other rules to curb the spread of the Coronavirus, money issues have rocketed to the fore. Many business face ruin as they cannot operate, individuals find themselves off work with no pay, others may be on short pay and yet others are being retrenched as their businesses can no longer operate. Some are fortunate, though, in that they can work from home, or are being paid by their employers irrespective of whether they are working or not.
From a financial perspective, the situation has highlighted how many businesses and individuals are only one month away from disaster. Businesses should have reserves to tide them over in tough times, and as individuals, we should have an emergency fund to tap into in times of financial crisis. It seems neither of these are in place.
No-one knows how long this situation will last. How do we get through it and make sure that any financial impacts are minimised?
1. Focus on what you can control – as individuals we have little control over the bigger picture so focus your energy on your family and abiding by the rules set by the state. In this way, we each play our part in achieving the greater objective
2. Set your priorities – if you do not have enough cash flow to cover all your financial commitments, decide which are priorities and pay these first. During these times, our immediate needs are accommodation, food, and safety. If you are paying accounts via debit order, see if you can cancel these so that you can pay them in cash as you can afford to.
3. You may want to stop paying into your savings or investment as this can wait if you are cash strapped. Try to avoid cancelling policies – life cover policies may have a premium holiday facility where you still enjoy cover but can stop paying premiums for a few months. Check with your financial planner or the relevant financial institution to find out what options are available.
4. Speak to your creditors if you are unable to meet your commitments, and get agreement from their side, You do not want to do anything that would harm your credit record or put you in disagreement with your creditors. Many banks have set up payment holiday options – check what your bank is offering.
5. Also check to see what benefits are offered as part of your credit assurance, a compulsory insurance policy that is attached to any credit you may have. This would generally cover you for disability or death, but for all credit taken out from August 2017, there is cover provided if you are retrenched. You may also be covered if you are earning no money for a limited period during to lock down. Speak to your creditors and find out what the conditions are around your credit life policy.
6. Look for the positives – during lock down, life is cheaper – we are not travelling to work, going out or spending money on entertainment. You WILL be spending less in these days, so if you can, put this money to good use towards your emergency fund. We do not know what next week or next month holds, so put away any spare cash you may have, and start (or boost) your emergency fund.
Human beings are so amazingly resilient and have overcome huge obstacles, if one looks back at history. We can and will get through this period – we just need to make rational and calculated decisions. Control what we can and take care of our families first and foremost.
Sylvia Walker is highly skilled and experienced in the financial services industry, having spent a large part of her career as a marketing manager for a blue-chip company. During this time, she worked closely with the media, conducting hundreds of presentations, doing radio and TV interviews and writing many articles for publications such as O, the Oprah magazine, Good Housekeeping / Goeie Huishouding, Sarie, The Mercury, Plus 50 and many others. She left the corporate world at the end of 2014 to pursue her interests further afield. She is also a published author. She contributed chapters on financial planning in Mary Ann Shearer’s Take Control the Natural Way and Nadia Bilchik and Lori Milner’s Own Your Space. She authored Dealing in Death – Ellen Pakkies and a Community’s Struggle with Tik and co-authored Steeped in Blood, the memoirs of Dr David Klatzow, which was shortlisted for the Alan Paton Award in 2011. She also co-authored and published Reflections for Old Mutual in 2013. Sylvia is currently a financial planner, writes articles, and conducts workshops on various aspects of financial literacy and planning. She is also the resident financial guru on the Cape Talk Early Breakfast Show, and is on air every Friday morning. Her latest book, SmartWoman, has just been published, and is a culmination of many years of experience in advising women on how to gain financial freedom and grow their wealth. SylviaWalker.co.za
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