When the first positive case of COVID-19 was confirmed in South Africa on the 5th of March 2020, things were looking good for many of us, financially. We were expecting bonuses, and returns on our investments were great. I was certainly on track with savings for my traditional wedding and paying a bit extra towards my vehicle finances after the first interest rate cut.
Fast forward three weeks and there were 200 confirmed positive cases, global markets were taking a massive hit, there was talk of the country going into a massive lockdown, a generally held sentiment that we might never see toilet paper or canned foods, ever again! It was madness. The knock-on effect became more personal when the lockdown was announced – some of us could not work anymore, many of our salaries were cut, and our side-hustles could not be classified as essential services. Our income streams were drying up!
This was the time to unleash those savings, to avoid using credit, redirecting money that is meant to pay off debt or borrowing from our investments to fund the purchase of essentials.
Those of us who have emergency savings accounts undoubtedly have been doing much better than those who don’t. An emergency savings account is an assurance tool that you can use to stir up some lemonade when life hands you lemons. It will help you maintain control of your finances in times of income/job loss, salary reductions and other transitional periods.
With the lockdown effects of COVID-19, we have been forced to save. No more Starbucks coffee every other day, impulsive buys of a sequence top that caught your eye which you only wore once, and certainly less fuel and other travelling expenses. So why not make the best of this situation? Spend the next few months maintaining the habit of cutting back and building an emergency savings account, get into formation!
Here are some tips I have been sharing with my girlfriends on how to trim that budget:
- Only subscribe to one streaming service or share subscription with a friend, if she has Netflix, you get Showmax and share passwords. (Speaking of Netflix, how beautiful is the “Becoming” documentary by Michelle Obama?)
- Mix up your shopping basket – I know we all tend to shop exclusively at Woolies, but why not buy non-perishables at a wholesaler which is much cheaper.
- Jump onto Pinterest for articles on how to make homemade remedies and cleaning solutions.
- Sign up for free online courses – As soon as I was asked to write this article, I enrolled online for a free Writing Course – Shakespeare was left quivering!
Our finances have been hard hit, and we are not sure what the long-term effects of this pandemic are going to be, we feel out of control. I think has been nature’s way of telling us to pause and re-strategise, look at habits we have formed along the years and see what we can and cannot live without, to go back to basics, and have an emergency savings plan before looking into making any other further changes to our general financial planning.