The COVID-19 outbreak has proved the value of a rainy-day fund. Here’s how to start building for your next one.
Coronavirus disease and the subsequent national lockdown have changed many things about our once ordinary lives: facial masks, social distancing; the way we wash our hands, touch our faces and even stand in queues.
Our lives are different now, and that’s not all bad. The hygiene habits we put in place today to help prevent the spread of COVID-19 will most likely prevent the transmission of other bugs – and in much the same way, healthy lifestyle changes you make in response to this crisis will affect your future, too.
“There are positives to come out of this experience,” says Grant Rossiter, an investment professional and stock portfolio manager at PSG Wealth. “Adaptation is key: when we emerge from the national lockdown, what do you want your new normal way of living to look like?”
Chances are, it won’t look like the past. “The market collapse of March 2020 will have some lasting repercussions for businesses, and the way they operate, for some time. Restaurants, gyms, cinemas: will they recover? When they open again, will they be the same?”
This is a time to be proactive about your lifestyle, advises Rossiter. “The concept of a rainy day fund has never been more pertinent. To survive a period where you may not be earning takes planning. If something like this comes round again, will you be prepared?”
Saving right now is both possible and essential, he says. Start with what you know. “Print out your latest bank statement, and grab a highlighter. Take a close look at each and every debit order that comes off your account every month – are all of them necessary?”
The lockdown regulations have stifled economic activity but opened up opportunities for savings by reducing our expenses to just the essentials. Petrol consumption has dropped, dining out is non-existent, window shopping is no longer relevant.
We now shop for a purpose, says Rossiter. ‘When you go to the shop, get what you need and go home. You’re not being caught in a negative, expensive pattern of bargain-hunting. Instead, you’re making planned, positive decisions about what you want and what you can use.’
While you’re cutting out non-essential debit orders and spontaneous extravagances, it’s also important to identify what does work. Be careful of cancelling financial commitments such as risk insurance, medical aid and retirement annuities. “This is a bad idea, especially for families, as it can have a costly effect on your risk profile and may compromise your future planning”.
This is a chance to review your lifestyle and make changes that set you up for a sustainable future. ‘It comes down to what’s important for you. We face stringent lockdown measures – and the silver lining is that we’re learning to live within our means.’
Where can you get financial advice?
Mediclinic Southern Africa employees:
Contact AskHR via WhatsApp (+27 021 809 6869) or email them: askhr@mediclinic.co.za. They will be able to provide you with the contact details of an Alexander Forbes financial advisor.
Mediclinic Namibia employees/ ER24 employees:
If you would like to consult a financial advisor, contact Salome Smuts Salome.smuts@mediclinic.co.za who will also be able to provide you with the details of an Alexander Forbes financial advisor.
Related Reading
