Consumer Education Programme Manager at First National Bank (FNB), Dhashni Naidoo, says South Africans are now more than ever forced to cultivate good spending habits not just by reviewing their budgets and prioritising their needs over their wants alone, but also learning how to manage said needs. Resources like electricity and data need to be used sparingly and strategically. She elaborates further on the importance of redirecting money saved during the lockdown period.

Limited movement over the course of the lockdown has freed up money that would have been spent on transport, entertainment and eating out. Naidoo says this money can be redirected to a savings account where it can earn interest. Another way to stretch money is to make the most of loyalty programmes, as they will enable you to save some money on certain items or services. She cautions South Africans to seek clarity on the conditions of debt relief programmes, when contacting their banks.

The National Treasury estimates between 690,000 and 1.8 million jobs will be lost as a result of the Coronavirus lockdown. This has been further corroborated by the Reserve Bank which predicts the country’s economy will shrink by 7%. This has been labelled the worst contraction for the country since the Great Depression.

Despite this, Naidoo discourages consumers from cashing out their investments. “Do not cash out your investments unless you have no other choice. Cashing out your investments during this time will not assist you in achieving your financial goals. If possible, leave investments as they are and give the market time to pick up, so that your investments have the best chance to recover and yield better value for you,” says Naidoo.

OFM News