Our world looks a lot different than what it did a month ago. Dealing with change is not easy, especially when it is as drastic as a national lockdown. However, this is an ideal time to start managing the things you may think you have no control over. Think about your financial situation. How are you managing your money during lockdown to help prepare for any future challenges or life after the lockdown?
With the continuous spread of the coronavirus across South Africa and the world, we have no idea how long the crisis will last. Most importantly, we have no certainty about our jobs or our economy in the coming months. Because of the uncertainty, we have to prepare for changes that may come our way.
Dhashni Naidoo, FNB consumer education programme manager reinforces the idea of preparing for the uncertainty that is currently consuming our thinking when he says “top of mind, for many consumers, are the financial concerns and uncertainty during this difficult time. What we need to do is be incredibly disciplined in how we manage our money, during this period and to the foreseeable future.”
We have a few tips up our sleeve to help you manage your money during the lockdown period.
1. Free up cash where you can
We know this may be difficult for most people, but the sooner you start freeing up cash, the better off you’ll be in the future.
You may have unnecessary bills that you won’t need during the lockdown or could do without until things get better.
If you are working and still earn an income during the lockdown you are one of the lucky ones. You have the advantage to save money right now. If you still have an income, start pushing as much money as possible towards a savings account. That way you’ll start securing a safety net for yourself whenever things get out of hand.
Start by saving the money you would have spent on travel, entertainment or subscription until things go back to normal.
2. Start earning more money
Use the free time you have at home to create an additional income. If you want to know how to start earning extra money, check out our blog post – How to make money from home.
Start a side hustle
This is easier than most people think. Sure, it is hard work, but it will pay off in the end. Once you get things going, you’ll find your rhythm and get the hang of it.
Open an online store with Shopify
Shopify is one of the biggest online e-commerce platform right now. The platform allows you to manage all your websites, sales and operation needs, all from one place.
Best of all you can sell whatever you want. You can sell physical products, drop-ship products, sell digital products and more.
Become a freelance writer
Freelance writing has become a mainstream side hustle around the world. There are a ton of freelance writing platforms that will help you get writing gigs.
The best thing is you don’t need to be an expert writer before landing your first job. There are many freelance writing jobs available that will suit your skills and experience level. And if you feel a bit insecure about writing, there are many blogs giving expert guidance about improving your writing skills or setting yourself up as a writer, such as Contena Community.
3. Avoid debt if you can
Debt is something you would want to avoid entirely for the next few months, if not for a whole year. This includes personal loans, credit cards, payday loans etc.
If you need a loan to help you get through a difficult patch, make sure you fully understand the terms and conditions before taking a loan.
How much will you be paying in interest? How long will it take to pay off the loan? What will your monthly instalments be? Can you afford the loan even if you’re unemployed for a few months?
Put yourself in the hot seat and ask yourself the right questions before taking out a loan you can’t afford.
4. Be smart about big financial decisions
Making big financial decisions now could backfire in the future.
Don’t be emotional when making a financial decision. Don’t fall for a ‘good deal’.
A good deal is only good if you can afford it now and in future. Otherwise, stay away.
Ask for professional advice before making any big financial decisions. That means asking banks and financial advisors for assistance in your purchasing decision.
5. Don’t purchase unnecessary things
We’ve become accustomed to spending our money on luxury items like sophisticated cell phones, fast streaming platforms, going to the movies, expensive clothes, jewellery etc. Our focus must not be on what we want, but on what we need.
Spending your money on the things you want, instead of need, is a fast-track to wasting money.
Before making a purchase ask yourself “Do I really need this?”. If you can answer yes go ahead and make the purchase. Otherwise, stay away.
For example, you may be due for a cell phone upgrade. If your phone still works, there’s no reason to upgrade. Your current phone will probably last another year, giving you time to budget accordingly.
Start taking control of your finances and prepare yourself for any future challenges that may come your way – some very unexpectantly.
#staysafe and #stayhome.