How to be finance-savvy during lockdown
One of the scariest aspects of the global Covid-19 crisis is its economic ramifications: the outbreak is not something that any of us anticipated, certainly not on this scale, and few — if any — of us planned for the fallout.
There is no doubt that one of the most daunting hurdles we will have to surmount in the aftermath will be rehabilitating our economies.
Happily, there are measures you can implement immediately to take control of your finances. Financial services provider DirectAxis recommends that households use this time to improve their economic habits. Here’s how:
Rewrite your annual budget
Needless to say, the coronavirus outbreak has probably altered the state of your financial affairs. You might, for example, be experiencing a pay cut, or have forfeited the salary increase you were expecting.
This time in isolation might be the appropriate juncture at which to makeover your budget accordingly. Reviewing your budget will also give you the opportunity to pay attention to where your money is going, and to adjust your expenditure since your life is pretty different under lockdown.
Improve your credit score
Credit scores are a reflection of your reliability in the eyes of the financial establishment, so it’s troubling that only a tiny number of South Africans have a perfect credit score. Given that you might need credit to keep things going in the near future, it’s important to start working on your credit score from now.
Using a free online tool, such as the one available here, you can discover how your credit score is calculated, as well working out as how to improve it. According to DirectAxis, people with higher credit scores are typically considered for better rates on loans, insurance premiums, and rentals.
Pay your debts!
If you are concerned that you might not be able to meet your financial obligations in the near future, consult your financial-services provider. The South African Banking Association has been working with banks to find ways to assist their customers during this period.
Skipping monthly payments establishes a dangerous precedent, can negatively affect your existent credit score, and puts the people relying on you in jeopardy.
If you haven’t been financially savvy so far, this is definitely the time to educate yourself about financial planning. There is a lot of information available online, including blogs, videos, columns, and news pieces. It’s helpful to consult a variety of sources and compare results and suggestions.