When you’re facing financial hardships due to a crisis – whether it’s the outbreak of COVID-19 or the sudden loss of a job, it’s tempting to make snap financial decisions to free up your cash flow. However, these short-term solutions could cause lasting problems.
Here are three things that you should not do when disaster strikes:
Don’t make more debt
No matter how tempting it may seem, this is not the time to swipe your credit card. Loading debt onto debt will only dig you further into a hole because, at some point, you will need to pay the bill.
If you can’t make ends meet without using credit, you may have a debt problem and you should seek advice from a debt counsellor as soon as you can.
Don’t neglect your budget
A financial plan is essential – especially when your financial situation is uncertain. If you aren’t on a budget yet, get one. If you have never tracked where your money is going, how will you know where to save? In times of uncertainty, every cent counts. A monthly budget will help you stretch your rands as far as they can go.
Don’t cancel your insurance policies
Why should you pay insurance for something that might not even happen? Insurance is a grudge purchase, and one of the most tempting payments to cut when money is tight. But what would happen if you were in a car accident? Or if your geyser burst? And if you cancel your medical aid as a short-term solution, what would happen if you or your loved ones suddenly became gravely ill? You should not cancel your insurance, nor your medical aid, in times of crisis as you will only have more bills to pay. Rather look for other ways to save money.
What you should do during times of financial uncertainty:
– Reduce your spending: you don’t know what challenges the future will bring, so try to save every cent you can. Ask us how.
– Get rid of your debt: it is more important than ever to clear your debt. Take the first step to financial freedom now.
– Get advice: we understand the fear you may be facing about your personal financial situation and are here to help you navigate times of uncertainty. Get in touch.
Complete the contact form on this page to get in touch, or give us a call on 086 111 3967. We’re ready to help.