The coronavirus pandemic induced lockdown has been a struggle for millions around the world in numerous ways. Country lockdowns can cause major financial stress for consumers and business owners alike. With limited economic activity, many household incomes are negatively affected.
In 2019, South Africa was already running into economic problems. The introduction of the lockdown has amplified the struggle for millions of consumers.
Just How Many South Africans Are Taking Strain?
BusinessTech reports on a recent report released by Old Mutual which focused on the financial implications brought about by the pandemic. The survey showed that over 58% of the surveyed households were facing high or overwhelming financial stress. This was brought about mainly by the utilization of savings or the use of more debt.
“Not only are absolute income levels under pressure as many take salary cuts, but demands on share of wallet are increasing as never before,” Old Mutual said.
“A third of consumers find that they are having to support more people financially than they did before the pandemic. Couple that with a constant fear of retrenchment or loss of income and no wonder stress levels have skyrocketed.
Savings Accounts Are At Risk Of Running Out
Old Mutual found that just under 40% of those surveyed had only enough money to last up to 1 month. This had jumped up by 10% from 2019.
Old Mutual commented:
“As incomes are cut and constrained, or demands on the purse increase, especially as friends and family reach out for help, households are resorting to various different strategies to cope, Old Mutual said.
“These range from cost cutting, accessing new (or existing) credit lines, dipping into savings or just not paying the bills,” it said.
Is There Any Relief In Sight?
Currently, we do not know when the lockdown will fully end or when a vaccine will be ready for the virus. We are not sure when things will go “back to normal”, if they ever do that is. But what can we do now to get some relief from all of the pressure.
- If you have been retrenched and have debt, try and find out if you had credit life insurance on your loans and accounts.
- Try and see which relief options you could qualify for that have been put in place by the government
- If your debt repayments are too high, speak to a debt counsellor to possibly consolidate them and reduce them
- Notify your credit providers that you are struggling financially
- Try not to overspend on luxurious or unnecessary expenses during this time
- Limit the use of debt if you can