COVID‐19: Important personal finance lessons to take home

Teljoy

South Africans have now been in lockdown for more than four weeks. Being forced to lock down has not only compelled us to find new ways to live, work and socialize in the confines of our homes, but we have also adjusted to this new way of being and, in doing so, are likely to have learnt some interesting new things about ourselves.

Because the lockdown has had a major impact on personal and household incomes, there is no doubt many people are seriously reconsidering their finances during this lockdown in addition to their needs for the home.

Here are some personal finance considerations that will be even more important to us all after lockdown:

Stick to a budget

South African households spend a significant portion of our disposable incomes on unbudgeted items that sneak into our baskets. This behaviour throws us off our spending goals and puts more pressure on our finances as we use credit to fund a lifestyle beyond our means, and get further into debt.

It has never been more important to create a monthly budget and stick to it. And a good budget should have an allocation for unplanned expenses. This will help us avoid using credit to pay for unplanned expenses.

Reduce spending on convenience luxuries

For a month‐and‐a‐half during lockdown, we were not spending on Uber‐eats, take‐aways, drive through coffee, ready‐made meals or fast‐foods; we can now see how much of our disposable income goes to these conveniences.

Now that we’re working from home we can appreciate a good coffee maker, or the convenience of an air fryer, and of course the home recipes to make. It would be financially prudent to do this more and reduce spending on conveniences, even after they continue to ease the lockdown. These items need not be acquired by a large cash payment or by incurring debt; they can be rented at a fraction of the purchase cost. As Teljoy we offer a flexible rent‐to‐own option on household, kitchen appliances and electronics that can save you so much money in the long run.

Pay your medical aid

None of us are immune to the coronavirus so it is therefore vital for all of us to ensure that our medical cover is kept up to date. According to medical experts, while 80% of people infected by the virus are likely to experience mild symptoms, 20% will suffer severe symptoms that require medical intervention, with a small percentage being fatal. Therefore, the most important thing you can do with your money today is pay your medical aid cover.

Why it is important to save?

It is during a financial crisis that we realise the importance of saving for rainy days. In fact, it is usually during rainy days that we realise we should’ve saved up. But it is still possible to start saving money during a crisis, particularly during a lockdown such as this. Whilst a difficult time to begin saving, it is the best time to instill the discipline of being frugal. So, while the current pandemic brings with it immediate financial difficulties and uncertainties, we need to do what we can to begin saving money to prepare for the uncertainties of the future. Contact your banker to set up a savings account, or use an online service to set up an account for savings.

New essentials

Working from home has now become a mandatory for anyone able to perform their work remotely. This would require setting up a working space in the home, and a reliable internet service accompanied by the necessary technology such as a laptop with video conferencing software. This PC may not have been necessary before the lockdown, or you may have had a single computer that served the family needs, but because your home is now required to double‐up as a sanctuary and an office, you may need to up the capacity to meet the new demand in the home from family members who all need access to computers at the same time.

While it is becoming increasingly evident that we all need to spend money sparingly in this time of uncertainty, it is equally important to invest in your ability to make money from home. Money is becoming increasingly tight at the moment, and it is important not to break the bank or incur debt. One way to do this is through rent‐to‐own. 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. You can begin rethinking how you’ll buy your new essentials and have them delivered to your door after the lockdown.

Keeping fit should not cost you a thing

Finally, we may now have realised that gym membership fees are a luxury and that one can get some good exercise in the home for free. A small rug or a square patch of lawn, and a couple of home training videos are enough to help you get a full‐body workout. You can also get onto the Google Play Store for free exercise and yoga apps, and of course, there are thousands of free YouTube workout videos at your disposal. You’ll need a laptop or a Smart TV, also available from Teljoy. These simple household items can help you save on that gym fee while still getting the body ready for the outdoors again. Rest assured, that time will come again.