News around the world has been dominated by the novel coronavirus (Covid-19) for the past few months. The virus has been spreading around the globe at a rapid pace with little sign of slowing down.

Many South Africans proudly praised President Ramaphosa’s announcement on Monday night to place the country on lock-down for 21 days over March and April. This is a great measure to curb the spread of the virus, but how will this affect our pockets?

How Does The Lockdown Affect My Household Budget?

Perhaps the harshest impact on consumers caused by the lock-down is the loss of jobs due to businesses being forced the close. While many businesses are able to work remotely and hopefully remain in a stable position, there are thousands that will not be able to survive.

Covid-19 has affected everyone’s life in one way or another. Whether it has impacted your business or your lifestyle, the consequence are far-reaching. Businesses are forced to decrease salaries or temporarily lay staff off, until they can afford to open again, whereas some retrench staff as a last resort. With less income, households will struggle to pay for basic living expenses.

Tips To Stay Afloat

Here are a few tips to help weather the lock-down period:

  • Draw up a tight budget for the next 4-6 weeks
  • Buy long-lasting food and buy in bulk
  • Try minimize use of water and electricity to keep the rates bills down
  • Stop all unnecessary subscriptions and memberships
  • With travel limited to going to buy essential groceries and medical supplies, save money on travel and petrol during the lock-down

What About My Debt Repayments?

Besides the obvious financial impact the virus can have, how does it affect your existing debt obligations? During the President’s announcement, there was quite a lot spoken about financial relief. Most of this, however, related to small/medium enterprise relief in the form of tax breaks and other available monetary relief options.

Some of the banks have already made public statements on how they plan to assist consumers over this time. They may choose to provide payment holidays, extended terms or offer additional credit to those who are financially stressed.

What Happens If I Can’t Afford My Debt Repayments?

Even with relief options from the banks, you still remain liable for your total debt obligations. The relief is often temporary, meaning that the short-payments and informal rearrangements may have to be caught up on at a later stage.

As of today, no non-bank credit providers have announced any sort of plan to offer consumers relief. This means that you may get relief for some debts but others will require their full payment. If you are struggling to afford your full debt repayments, try and reach out to your creditors to let them know.

Are You Looking For Permanent Relief?

If you are struggling with debt repayments and are looking for permanent relief, you may qualify for debt counselling. Debt counselling will assist you by permanently reducing your monthly debt repayments and interest rates. Your monthly payments will also be consolidated into one simple payment.

A debt counsellor will formally negotiate on your debt repayments on your behalf. You will also be legally protected under the process and your assets will be secured. Debt counsellors use a Payment Distribution Agency (PDA) to distribute your money to each creditor. This ensures that your money is safe and secure. It also provides you with the transparency of knowing how much each creditor gets paid each month.

Vantage Debt Management would like to wish everybody the best of luck during the lock-down. Take care of yourself and stay at home!

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