Budgeting During COVID-19 - Destiny Connect

Budgeting During COVID-19

One of the inevitable consequences of the measures put in place by governments around the world to curtail the spread of COVID-19 is economic uncertainty. With dozens of countries imposing strict lockdowns on their populations, shops and offices are empty. The global travel and hospitality industry, entertainment, factories, transport, corporates and industry, property, liquor, educational institutions and millions of entrepreneurs are facing drastic cessations of business, as stock markets around the planet drop to their lowest levels in living memory, while employees in all sectors face job losses or protracted forced leave, leaving them unable to provide for their families, put food on the table or service their debts.

Recovery from the economic meltdown, when it eventually begins, will be slow and difficult. No-one knows how long it will take for normality to be restored, so it’s essential to take steps to protect your finances and prepare for tough times.

“It’s crucial that we plan, prioritise spending, manage debt, use resources sparingly and be disciplined about sticking to the plan,” says Dhashni Naidoo, Programme Manager at FNB.

She suggests the following steps to keep yourself and your dependents going:


Children will be at home for an extended period. Adjust your budget to cater for the costs that usually come with keeping kids occupied, such as games, books, puzzles and activities they can enjoy in the garden, if you have one.

Don’t spend recklessly

These trying times call for cautious spending.

  • Cut back on luxury items and unnecessary expenses. Save wherever possible. This isn’t the time to run up store credit, make big-ticket purchases such as cars, TV sets or household appliances, or apply for home loans, as no-one can predict how long it will take for the situation to stabilise. Jobs can also be lost without warning as companies close or lay off their employees.
  • Manage every cent you have carefully and account for it by budgeting not just monthly, but weekly, sticking meticulously to what you can afford.
  • Ensure you put aside a sum of money regularly – even if it’s as little as R200 or R300 a week – for genuine emergencies such as illness, accidents, essential household or vehicle repairs and other unforeseeable events, and don’t touch that reserve unless you absolutely have to. It may be hard doing this at first, but it eventually becomes a habit – and it could save you and your family from disaster.
  • Don’t assume that “instalment holidays” currently being offered by some banks and schools mean you won’t need to pay them. This is a short-term dispensation, not a waiver of debts, and you’ll have to make up whatever payments they let you miss making now – plus interest – in a few months’ time. You’ll need to have the funds to do so, so plan for it now.

Shop smart

Look for specials and no-name brands, buy only what you need and use your loyalty reward programmes. Consider pooling resources with friends, neighbours or extended family, as stokvels do, where groceries are purchased and distributed collectively. Buying in bulk is often far cheaper than single purchases.

Take advantage of the reduced repo rate

Take advantage of the reduced repo rate from the SA Reserve Bank, which is now at 5,25%, with the prime lending rate at 8,75%. This offers much-needed financial relief for consumers, who’ll be paying less for debts such as car, home and personal loans. The extra available money it leaves you should be saved or used to service debts quicker, which dramatically reduces interest payable.

Additional reporting: FNB

About author


Zimela has been a multimedia content producer and writer for 10 years and an “insufferable feminist” for six. When she’s not battling writer’s block, you’ll find her practising the ukulele or watching documentaries on Netflix.
Zukiswa Zimela