The COVID-19 outbreak has created panic due to the uncertainty we find ourselves in. The pandemic has caused not only emotional stress and uncertainty but financially too. Between the exchange rate from dollar to rand depreciating to 17,75 and dropping oil prices, it is no surprise you find yourself increasingly concerned by your finances. How should we be navigating through this challenging time?
Make your money work for you
You may be feeling nervous and lack confidence in the stock market during this time. Although share prices have dropped, it presents a great opportunity for buying.
There is little faith in an uncertain market, but the reality is that the market is always uncertain. No one can predict the future. We know from historical experience that when the market drops and we’re faced with uncertainty, what follows is a period of recovery and growth. After World War 2 the markets recovered from seemingly the worst market shock the world had faced.
The same can be said for 2020, in the future we will know the full impact of Brexit and we will have recovered from the COVID-19 pandemic. If we avoid investing in the markets today when stocks are cheaper, we won’t benefit from the turnaround once our economy has recovered. Investing in the market is a long-term decision. You cannot time the market; you need to just ride out the bad with the good.
At this time of year, many corporates are looking to pay their staff bonuses based on company performance. And whilst this is an exciting time for employees, do not blow the cash on material things you want.
Just wait. We are in very strange, uncertain times. How long will the country be in lock-down? What is the overall impact likely to be on the economy? As us as individuals? Now is not the time to buy that fancy new TV or car you had your eye on. Now is the time to invest in yourself and your future. You need to build resilience to navigate through any emergency that comes your way. You need a way to weather the storm. If you are one of the lucky ones to still get a bonus. Think, before you spend.
A national lock down could mean your employer has no choice but to reduce your salary. This is when having resilience through savings is vital. When you receive your full paycheck for the previous month, instead of spending it all, save some of it. This way if you get paid less the next month you can add your saved-up cash towards your short salary.
It is important to start saving now, so if an emergency happens, like your salary being cut or you face retrenchment, you can be prepared.
You should also consider starting a budget, one that is more strict than usual. Self-quarantine allows less of your budget to go towards things like entertainment and transport. You could allocate these expenses that you no longer use to your savings instead. Don’t be tempted to spend your left-over budget, save it. You won’t regret holding back on your budget when you need the extra money.
The worst thing you can do during the pandemic is panic. This will only cloud your judgement. Listen to the advice given by our President and stay at home.
Don’t go to your local supermarket and stockpile on food. Panic buying can cause you to overspend your money on food you might not need. It also makes it harder for those who may not be able to get to the shops as often as you and are more vulnerable. The supermarkets are staying open during lock down and our President has made it clear that supply chains have not been affected. Panic buying is bad for your finances and everyone else.
Keep up your hygiene tactics. This is a good way to prevent yourself from contracting the virus. Wash your hands frequently, using soap and water or hand sanitizer. Count to 20 every time! Stay indoors and avoid contact with people.
The bottom line
We can work together to make these uncertain times bearable. It will be difficult, but you can come out on-top. Make sure you are prepared financially for whatever is thrown your way. Stay calm and listen to the advice given by our health centers. Try to invest in yourself so that you can come out victorious. Start planning now and save any extra money you can find in your budget. Don’t be tempted to spend your bonus, wait and be prepared. We are all in this together and there is a light at the end of the tunnel.