POLOKWANE – All of us will at some point feel the impact of the Covid-19 pandemic. The shelves at some of our favourite stores are empty or close to empty and as of Thursday at midnight, South Africa will be in lock down. This pandemic creates fear and more uncertainty. Most of us are concerned about our finances and what could happen and Review therefore spoke to Elmien Lottering, SFP financial adviser, for some tips during this time.
• Budgeting: “Scrutinise your budget and cut cost where possible. You may consider freezing your gym membership or cancelling certain subscriptions.”
• Cash-flow: “With your budget scrutinised and adjusted, test it against all assumptions and worst case scenarios when you do your forecasting. This does not indicate that you should withdraw cash but rather ensures that you have available should the need occur.”
• Medical aid: “Ensure that your medical aid premiums are paid up-to-date. Do not cancel your medical aid in an attempt to reduce expenditure.”
• Gap cover: “If you do not have gap cover, now would be the time to consider it.”
• Emergency fund: “Now is the time to ensure your emergency fund is solid and if you do not have one, the time to start is now. Ensure that the emergency fund is available immediately without the hassle of forms and other red tape that may delay the process.”
• Investment contributions: “Retirement annuities and other monthly contributions to investments can rather be placed on hold for a few months than cancelling it. No penalties are charged for placing contributions on hold but when you cancel the contributions, penalties will be charged. Speak to your financial adviser for further information and to discuss the implications.”
• Home loan: “Speak to your bank if you are concerned about being able to keep up with the payments during next few months.”
• Credit card and other retail accounts: “Should you foresee any problems in making payments, contact your creditors to make the necessary arrangements.”
• Insurance: “Avoid cancelling your life, disability, severe illness or income protection to cut cost. Bear in mind that it may be difficult to apply for life cover at a later stage. Contact your financial adviser and discuss your current cover for a review and cut-back on your cover only where appropriate.”
• Update your will: “Make sure your will is updated if necessary. Again contact your financial adviser to update or set up a new will.”
• Invest in yourself: “Use the extra time to learn a new skill, new language or do planning for your future.”
