The coronavirus pandemic has created an atmosphere of war. Although it’s a different kind of war filled with uncertainty and panic as people are anxious about possible lay-offs. Some employers have already told their employees that the no-work-no-pay rule will apply.
Medical expenses could also skyrocket, especially for those who could end up being infected.
Many employees might not get paid and some will only get a portion of their salary this month end due to the extended national lockdown.
The spread of then COVID-19 virus led to many others around the world losing their jobs. Those who have sufficient investments and savings will most likely be able to overcome this health and financial crisis.
Graphic of the economic measures for the extended lockdown:
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“Many employees will be forced to dip into their savings this month end to substitute their income and those with an emergency fund or access bond will be able to survive the current crisis better than those who don’t. Having long-term savings means you will not need to use credit to supplement your income. You could pay interest of up to 26% per annum for unsecured debt such as credit cards and personal loans,” says Neo Mmatli, who is an Independent Financial Advisor.
Mmatli says it’s not all doom and gloom though. “But it’s not all doom and gloom. Your expenses are likely to be minimal during this 21-day as you are forced to prepare your own meals and you also travel less. This means you have an opportunity to improve your savings and pay off your debt especially if you are going to receive a full salary,” explains Mmatli.
Mmatli explains that the JSE share index has lost 18.9% since the beginning of 2020.
“The JSE All Share index has lost 18.9% since the beginning of the year. But those with investments linked to the JSE are urged not to cash in their investments as markets will recover over time. Investments such as unit trusts and exchange-traded funds allow you to withdraw money within 48 hours without being penalised,” says Mmatli.
Financial Educator Keletso Mohapi says experts have urged consumers to pay off existing debts.
“Consumers have more disposable income, especially after the Reserve Bank reduced interest rates by 1% last month. But experts have urged consumers to rather pay off their existing debt, especially during this time of uncertainty. Paying extra on your homeloan or car instalment will help reduce the interest that you will be charged,” says Mohapi.
Only time will tell whether the Unemployment Insurance Fund created to assist workers affected by the 21-day lockdown will be processed on time so that the affected workers can get paid this month end. All indications by the labour department are that there could be delays in processing these payments. This could lead to workers facing starvation, especially if they have insufficient savings to carry them through this difficult time.
Timeline of coronavirus confirmed cases and deaths in South Africa:
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