Essential Financial Advice To Help Ease Burden During COVID-19 Lockdown

by | Mar 31, 2020 | Hustle, Latest, Money | 0 comments

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Since South African President Cyril Ramaphosa announced that the state would impose the drastic 21-day nationwide lockdown policy, to tackle the COVID -19 (Coronavirus), citizens have been distressed about how it will impact them financially. John Manyike, Head of Financial Education at Old Mutual, shares essential advice to help ease financial burden during this turbulent time.


By: Blacklight writer 
Main image: Logan Weaver – unsplash

“Our country finds itself confronted not only by a virus that has infected more than a quarter of a million people across the globe, but also by the prospects of a very deep economic recession that will cause businesses to close and many people to lose their jobs,” said Ramaphosa during his speech, on 23 March. 

Read Ramaphosa’s full speech: South Africa Lockdown – includes plans and measures the government will take to assist or ease financial burden on citizens during lockdown. 

The president also stated that during the lockdown people would be allowed access to essentials – food stores, banks, pharmacies and doctors.

However, since the lockdown, citizens have been panic-buying to ensure they have enough essentials – and alcohol for some (which is banned for the duration of the lockdown) – while in quarantine.

But freelancers and entrepreneurs (particularly artists and creatives) have been distressed about the grave effect this virus has had on their income – especially considering that many events were postponed or cancelled – resulting in a huge loss of income.

Businesses have also been forced to temporarily shutdown, and some shut down indefinitely – leaving many entrepreneurs feeling hopeless.

“This [lockdown] is also a strong message to freelancers, entrepreneurs, artist/creatives and entertainers, that, post-COVID-19; we have to do things differently, financially.

Read more: Minister of Sports, Arts & Culture, Nathi Mthethwa on plans to minimise the impact of Covid-19 on Sports and Arts & Culture sector

John Manyike, Head of Financial Education at Old Mutual, tells Blacklight that people must not “overreact and make panic purchases or hasty financial decisions”, despite the uncertainty and anxiety the pandemic has caused.

Manyike advises freelancers and people in the arts and creative sector to leverage their brand power. “Draft a proposal to corporate brands that may wish to contribute towards the COVID-19 campaign. Highlight how your brand could be of assistance, using your leverage – [your] following,” he says.

He adds: “Right now, it’s also very hard to look at alternative streams of income, because it would be difficult to collect the money.

“Some are looking into streaming or using social media to remain operational, but in order for that to be profitable that requires you to have a huge following or subscribers.

“However, there are people who earn thousands and millions through generating content on social media, but it’s people who have the muscle of a great following. Those people must keep creating content, even during this time.”

Manyike says he applauds DJ Euphonic (Themba Nkosi) for advising people to be proactive during this time. The DJ Tweeted that people should go and engage their credit providers, and not wait for them to come knocking.

“This [lockdown] is also a strong message to freelancers, entrepreneurs, artist/creatives and entertainers, that, post-COVID-19; we have to do things differently, financially,” adds Manyike.

“This thing of showing-off material acquisitions or living lives we cannot afford is simply not the wisest thing to do.

“We should rather be looking at ways to save or to profit while we are still relevant or making money. We must always look at ways to diversify our revenue stream, instead of over-spending.”

“Instead of panic buying, we should try and survive on basics, and use this time to connect with our families and loved ones. 

For those who are adopting new forms of services to earn an income, like live streaming via social media, online shopping and delivery services. Manyike warns that if you had previously not built your brand around such services, it may take some time to market and gain consumer trust.

“If you did not offer such services before the lockdown, you will have to work extra hard in order to break into that market, and it can take time.”

Manyike adds that even the government’s debt relief finance scheme for Small, Medium and Micro Enterprises (SMMEs) is not a “free for all”, it’s for businesses that fit a certain profile, and they also have to prove that the COVID-19 and lockdown directly affected their businesses. 

To apply for the SMMEs relief funding go to: smmesa.gov.za

He also says he would not encourage people to disinvest at this moment, as COVID-19 is not a permanent situation. “The challenge with timing the market now is that if you act hasty you might end up being a loser, ultimately. 

“Investment is like a marathon; there are hills and valleys, and you must maintain a long-term view. Who knows, when things stabilise again you might be the biggest gainer.

“I would strongly advise people to consult a financial advisor so they can be clear about their options and make the right financial decisions.”

With the hysteria around the lockdown, there has been an influx in panic buying.

Manyike says this could be because as human beings we are influenced by the behaviours of those around us. “When you see other people stocking up, naturally you would also want to do the same, because you would not want to see yourself in a helpless position,” he says.

 “What’s important here is to choose who you listen to. If you are constantly giving an audience to people who are highly anxious and worried, then you would also be worried. 

“You need to identify people who are more hopeful or are able to find the positive in the current situation. 

He continues: “I would also urge employers to try and get their employees to consult employee assistance programmes, so that during this time they [employees] can speak to councillors and also approach this on a psychological and emotional level.”

Manyike concludes that the best advice he would give anyone in South Africa right now is to “be calm and wait”. 

“It’s not going to be an easy time, especially for those who will be confined in small spaces,” he says.

“However, we should go back to the basics and also practise ‘Ubuntu’ [humanity – a person is a person through other people]. 

“Instead of panic buying, we should try and survive on basics, and use this time to connect with our families and loved ones.”

Best tips from Manyike to help ease financial burden during lockdown: 

Avoid taking out loans to buy in bulk. The nature of this pandemic is terrifying; however you shouldn’t be making financially crippling decisions that may lead to unnecessary debt. The best approach is to monitor the situation closely daily without making long-term decisions.

Download educational games on phones and laptops. Line up educational games and activities you can engage in as a family and to keep the children’s minds stimulated. Network providers are also starting to lower data costs as part of their response to the COVID-19. This will go a long way in making this exercise affordable.

Be proactive and approach your credit providers. If your household income is affected due to the vulnerability of your industry. Particularly if you anticipate that you will struggle to service your debts, don’t wait for debt collectors to knock on your doors. Make arrangements in advance.

Cultivate a culture of responsible consumption. Money, food, water and electricity must be used sparingly during these uncertain times as we do not know how long it will take to contain the virus. Avoid any form of wastage.

Check your insurance and medical aid. Make sure you know what medical and insurance cover you have in place, and whether it applies during a global pandemic. If you have travel insurance, make sure you understand all the terms and conditions it stipulates, if you don’t, contact your insurer immediately.

Take a long-term view when it comes to investing. Don’t get tempted to disinvest because of panic. Markets are generally volatile during uncertain times, but this is temporary.

If you display any of the flu-like symptoms and suspect you might have COVID-19, contact your doctor or call the public hotline number on 0800-029-999 immediately.


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