A personal financial plan to help with the economic hardships in a global crisis

Covid-19 has affected people more than people may have realised when South Africa went into lockdown. Both personal and work lives have taken strain because of this global crisis. People are losing family members; their jobs and businesses are closing down. Some still have their employment, but still have their fair share of struggles to get through, such as pay cuts.

Since you’re here, you have also experienced financial hardships due to the pandemic, and are trying to find ways to help alleviate the financial pressure that COVID-19 has brought. Continue reading this article to see how you can create a financial plan that can help you during the coronavirus pandemic.

Relook your existing monthly budget
The first thing that you need to do is look at your current budget. Looking at your existing budget will help you evaluate where you have been recklessly spending money, and narrow down your needs and wants during this time. Your budget will also show you how much money you have left to spend after you have paid your bills and fixed expenses. Currently, your needs can vary between; car payments, renting or bond repayments, school fees and having money for home utilities.

Those are things you have to pay each month, and should not be removed from your budget. To make things easier, always make those payments first; this will ensure that you and your family are safe during this time. Once that is out of your budget, take a look at what your wants are and where you can cut. For example, you can cut back on the following:

• Lower your monthly tv subscriptions and go for an affordable package.
• Only purchase food items that you and your family need, cut back on treats and snacks.
• Cancel any membership subscriptions that you no longer use now.
• Practise healthier habits e.g. stop smoking and drinking.
• If you aren’t working from home, it might be helpful to lower your wifi package to an affordable price.

Relooking and cutting or reducing certain things can be effective in ensuring you have more money to spend on items that you need.

Make contact with your creditors
Now more than ever, you need to work with your creditors. COVID-19 has impacted everyone’s lives and has increased financial hardships for many families. If you can no longer afford to pay the minimum amount, contact your creditors and find out if they have a payment relief plan during this time, or ideally, if you can lower your monthly instalment.

Apply for a personal loan
If your creditors don’t have a COVID-19 relief payment plan, then your next step is to apply for a personal loan. Although it’s not ideal to acquire more debt during this time, having a low-interest loan can be your best option. Many personal loans in South Africa can help you overcome your financial hardships. The money you get from your loan can help you consolidate all your small debts such as credit card and store accounts. By doing this, you know that you only need to pay for your essentials like food, mortgage, school fees, car payments and your loan amount, etc. This will help you lower the burden and give you more financial support, helping you buy things that are needed. When applying for a loan, make sure you use the personal loan settlement calculator to see how much you need to pay per month; interest rate and any other additional fees.

This will give you an idea of how much you need to repay per month and whether or not you have the financial means to do so. It’s important to only take out an amount that you can afford to pay back.

Look for ways to earn more money
Even in times of a crisis, some services are needed. If you have a service that you can sell currently, now would be the best time to start. Although it may not pick up immediately, you never know when you can start earning extra money. For example, if you have skills in digital marketing, e.g. social media, building websites or blogging, you can do that at home to earn an extra income. Many businesses still need that expertise, so you never know if it can be a way to generate income.

Keep your wellbeing in mind
While the biggest concern when it comes to COVID-19 is people’s physical health and finances, we cannot forget that it has an impact on your mental health too. Being away from your friends, family, and even co-workers can be hard. Adding money issues and the fear for you and your loved ones’ physical health can have a big impact on one’s health. During this time, you must take care of yourself. According to Suntosh Pillay, a clinical psychologist, South Africa could see a massive rise in depression due to the pandemic. It’s therefore crucial that you keep your wellbeing in mind to ensure you’re able to take care of your family and yourself by continuing to work.

• Educate yourself on what you need to do in case you or a loved one gets sick. This will help ease stress and worry as you’d have a plan in action.
• Take breaks and relax by reading, watching tv, exercising, cooking a meal or playing board games with your family.
• Keep in contact with your family and friends through video calls.
• Watch or read the news when you’re in the right space to take it in. Reading about what is happening currently around the world can affect you and cause added stress.

Avoid payday loans
Payday loans aren’t helpful, and they can get you into more debt than you already are in. Although they can be easy to get, they only give you a short felt relief pulling you into a cycle where you continuously need a payday loan to cover your bills. Rather focus on creating a realistic budget, stop using your credit cards, and if needed, apply for a loan and consolidate your debt. Unlike a payday loan, when you fill in a personal loan application, you sign on an agreed amount to debit every month. This amount can fit in your budget, rather than you having to pay the full amount and interest in one payment the following month.

Final thoughts
Life is unpredictable; no one expected the COVID-19 outbreak, but it’s time to adjust to the new normal. No one knows how long this pandemic will last or what it will do to South Africa’s economy; this is why you must create a financial plan that will keep you and your loved ones afloat.

Make sure you do things that will help you and your family now for a better future.