Friday the 1st May 2020 saw the “lift” of the Covid-19 lockdown in South Africa, or so we thought… What actually happened was the introduction of different lockdown levels, which depend on the severity and infection rate of the virus in each province.

Each level allows different businesses to operate and allows further movement within and between each province on a business and individual level. Level 5 is basically a full lockdown as per the initial 5 weeks, which only allows for essential service operation. All provinces are currently in level 4, which allow the opening of more businesses depending on their risk and economic contribution ratings.

Tough Business Decisions Affect Thousands Of South African Employees

During the crisis there have been thousands of companies that have been negatively affected. There are certain companies and industries that have managed to carry on as per normal, to work from home and some even realizing an increase in businesses. Unfortunately, the majority of South African companies have been negatively affected in some way or another.

Many employers have had to make very difficult decisions such as pay-cuts, reduced operating times, retrenchments and some have even had to close their doors and shut down completely. With little or no cash flow, due to reduced sales, businesses simply cannot afford to continue operating. This is one of the horrible impacts of this virus, especially in a struggling economy.

What Does This Mean For You?

We do not now how long the lockdown will last or when levels will be changed up or down. It is also impossible to predict when things will go back to normal, if they even can is a whole other question. Companies also have a limited amount of cash flow to keep themselves running and time is ticking.

Although it is easier said than done, try to remain calm and make rational decisions during this time. Come up with a sound financial strategy instead of rushing into decisions. Consult with friends, family or professionals to talk things through.

What if you and/or your partner have been unaffected by the lockdown?

You can consider yourself extremely lucky. Although it may seems there has been no impact on your household financially, the future is still uncertain.

It would be best for you to implement a strict budget and maximize savings during this time. Due to all the uncertainty, it is best to be as frugal as possible and make sure you have enough for all of the essentials.

If you have more than you need and feel that your income prospects are well protected, why not look at how you can make a positive contribution during this time?

What if you and/or your partner have received a pay-cut due to the lockdown?

You need to make some strict adjustments to try and make it through this tough time. Due to less money coming into your household, you need to create a new budget which prioritizes essential living expenses.

Make a list of all of your fixed expenses such as rent, debt repayments, insurances, medical aids, subscriptions etc. Then make a list of all of your variable costs like utility bills, groceries, transport costs etc. These are likely the expenses where you will be able to cut down to save.

• During the lockdown, unless you are an essential worker, you may be able to save on petrol and transport costs
• Try to buy in bulk and choose unbranded goods at the supermarket
• Research to see your debt repayment options
• Buy long lasting foods to reduce wastage
• Cut down on luxury purchases
• Avoid excessive online shopping

What if you and/or your partner have been retrenched during the lockdown?

You need to look into the Unemployment Insurance Fund options available to citizens during this time. Your company should be assisting you with the application process. The government has also released ways in which to claim from the unemployment funds made available. Due to little or no funds coming into the household during this time, you may need to reach out the people you will be unable to pay in the upcoming months, such as:

• Your landlord for your rent
• Credit providers for your debts – if retrenched, you may qualify for a credit life insurance claim
• Bank fees
• Insurance and medical aids providers
• Subscription based services
• Cell phone providers
• Schools

These strange and testing times are difficult for all South Africans in different ways. It is important that we obey the restrictions put in place and try to reduce the spread of the virus. We urge everyone to stay at home as much as possible, wear your mask and hopefully we can overcome this virus as soon as possible.