The national lock-down caused by the Covid-19 pandemic has had a serious effect on South Africans in numerous ways. Not only has the risk been high from a physical point of view, but also from a financial one. With businesses being forced to close and staff taking salary cuts, many consumers have been battling to get by.
Prior to the pandemic, the South African economy was already in a battered state. These recent events have merely amplified the effects. When consumers find themselves short on cash flow, some tough decisions need to be made.
How Can You Manage Your Money Better?
Firstly, a strict budget needs to be drawn up. Create a spreadsheet or even use a blank piece of paper. Using a recent bank statement, make a list of all of your fixed expenses first. These are payments such as rent, cellphone contracts, debt repayments, insurances, medical aid etc.
Next, list all of your variable monthly expenses. Things such as water and electricity, transport/petrol cost, groceries etc. Now you need to tally them up (this could be the scary part).
Are You left With A Surplus Or A Deficit?
Next you need to see how these stack up against your income. If you have a little leftover, you are one of the lucky ones. You should be trying to save or invest the remaining money wisely. Speak to your bank to open a savings account or a financial advisor for some options.
If you are left with very little or even a negative, you could be over-indebted. Try to see if there are unnecessary expenses or luxuries that you could cut down on. Otherwise you may need a more structured solution.
Are Your Debt Repayments Causing You To Miss Other Important Payments Each Month?
If your credit card, loan, vehicle or home loans repayments are too high, there are ways that these can be restructured.
A consolidation loan is a large personal loan used to pay off all smaller debts and then be left with one repayment and one provider to pay. Clear off all of your debt and start afresh with a loan over a longer period for lower repayments.
Debt counselling can assist by lowering monthly debt repayments and interest rates. This is the best option if you are over-indebted or are unable to get any more debt. A debt counsellor specializes in assisting with this formal restructuring process.
What To Do If You Simply Cannot Pay?
If you have exhausted all options and are not sure where to turn next, it is best to speak to all the parties whom you are battling to pay. Call or email them and let them know of your situation. Even if they are not interested or cannot help, at least you have communicated with them.
Let them know that as soon as you can you will try to catch up on missed payments or short payments.