#Post‐lockdown: What essential household items do you need and can you afford it?

Teljoy

The South African government recently announced the extension of the nationwide lockdown by two weeks, which means that by the 30th of April, South Africans would have been confined to their homes for more than one month. By the end of lockdown, families would have cooked, cleaned, played, read, and watched enough television to have established new norms in their households. And we may also have realised that the appliance (and electronics and furniture) in our homes make our lives a little easier when we need to be self‐sufficient.

From the kitchen to the bedroom, appliances and household goods make life a little easier, whether they be a cake mixer for homemade bread, another TV for family members that now want to watch different shows simultaneously, or an extra couch to accommodate the entire family. And the need for these items will not disappear soon, since social distancing will likely be a feature of our lives in the foreseeable future, even after lockdown.

But all these appliances and goods come at a cost. It is quite clear that the economic impact of the coronavirus will be felt by almost every household in the country, and we will all need to watch the rands and cents and exercise some financial wisdom.

Across the country and across different industries, many have suffered salary cuts, and it is inevitable that some companies will close and jobs will be lost. The outlook for the medium term is marked by uncertainty on the future of the economy. Despite this new reality, we still have to honor our debt repayments on car finance, bonds, loans, store accounts and other debt. So right now, committing to debt to secure a washing machine (which you now desperately need), a dishwasher, cake mixer, or a better oven, larger fridge, and perhaps a better coffee machine ‐ might be a bit of a stretch on your already limited finances.

However, even with this reality there are ways to get the items you require without getting into new debt. And it is indeed debt, via the traditional credit model, that has left many consumers in despair in times of economic crisis. A better solution than debt is rent‐to‐own. Pioneered in South Africa by the online retailer, Teljoy, this model allows consumers to rent a wide range of household appliances, furniture, and electronics on a month‐to‐month contract, allowing the customer the option to take ownership after a predetermined period. A major benefit of rent‐to‐own, unlike debt‐incurring hire‐purchase or credit facilities, is the financial flexibility it provides.

If there was anything to learn from the financial impact of this pandemic is that none of us can really afford to accumulate any more debt by buying things on credit. Many banks offered financial relief during the lockdown, but many payment breaks and loans were achieved by increasing the repayment period. This means that while consumers temporarily gained a bit of cash in their pockets as a result of not servicing their debt for a period, the debt repayment term was extended and therefore the interest paid over the period of the loan would be greater.

South African consumers are expecting a tough time ahead, and will be reluctant to accumulate unnecessary debt. While big ticket items like cars and houses are best financed through bank loans, rental and rent‐to‐own has never made more sense. The option not only offers consumers affordable payment plans, it also offers comprehensive maintenance and repairs. This means that you’ll generally not need to fork out money to replace a worn‐out or faulty appliance.

Had you acquired a refrigerator through rent‐to‐own and it developed a fault or even broke down completely, you’d be able to replace or fix it without paying any more than your regular monthly rental premium. This benefit is not available on a hire‐purchase or credit‐purchase. With these options, you’d still need to make the loan repayment, and then fork out more to repair or replace the faulty item, placing more strain on your finances.

So if you’re thinking about the time we’ll all spend at home after the lockdown, and you’re planning on acquiring new furniture, appliances or electronics post lockdown, consider rent‐to‐own for a better (and economic‐crisis‐proof) financial future.