Personal finance during COVID-19
You probably have many questions during these trying times...” Will I lose my job?” ...” Will I be able to keep up with my debt repayments without an income” ...? “Will I have enough money to buy necessities at the end of the month”
Let's see how we can help with your personal finance during COVID-19.
You may be on a tight budget this month because of reduced pay. It is still important to put aside any part of it that is not being used this month towards savings. The money you are saving towards transport and kids lunches and cooking at home can go towards building up an emergency fund. This will help with your personal finance during COVID-19.
If you end up losing your job or need sudden medical care, your emergency fund can bail you out rather than taking out credit and increasing your debts.
You can start saving with Meerkat from as little as R25 a month. Our new savings plan makes your money work for you and you can track and prioritise your goals using our interactive app.
Pay off your debt
Try and pay off your debts, especially your short-term debts. This time may be trying on your financial situation but there are benefits to paying off your debt during this time. The interest rates have been slashed by 1%, this means that you will be paying less for your debts, so make the most of the reduction in payments while you can.
There are concerns about job loss, so pay off your debts while you still can. This way you can make sure your credit score is unaffected. If you do lose your job, don't panic and don't ignore your commitment. Contact your creditors and negotiate a reduced payment or take advantage of the payment holidays on offer. If you are under debt review, contact us immediately to advise of your change in circumstances. We will work with all your creditors on your behalf.
How can I save if I have debt?
The final question you may be stuck with around debt is: “How can I save if I am paying off my debts” You can, just start small, it will build up. If you find yourself in a tough financial situation while paying off your debt and have no backup savings you are likely going to need to take out debt to fund the emergency. If you start saving while you are paying off your debts, you can make sure you are secure in any emergency. On top of this benefit if you don’t end up using your emergency fund, you have a good base for your retirement fund.
How the lower interest rate affects you and your finances
The South African Reserve Bank (SARB) has announced that the interest rate will drop by 1% leaving the repo rate at 5.25%. This was announced to aid the economy while we combat the coronavirus. Here are some points on how this will affect you and your finances.
- Borrowing of money is more affordable for you and businesses, this also relates to paying off your debts.
- Bond payments are less, and property is cheaper
- Assets such as housing are cheaper so it’s a good time to invest
- All these combined stimulate consumer spending and therefore stimulates the economy.