The beginning of 2020 was marked by hope, dreams and renewed aspirations for many. Even people who don’t usually engage in the New Year’s Resolution practice could not resist the feeling of renewal and the idea of turning over a new leaf brought about by the turn of a new decade.
The whole world’s sense of new beginnings was quickly thwarted, however, when Covid-19 befell the entire planet and humbly brought us to our knees. And almost two years later, we are still trying to adjust to the tragedy that befell us.
At times if feels like we are juggling too many balls in the air as we have to keep ourselves safe from the pandemic, deal with the emotional and mental toll of it all and try to survive financially.
Whether you are employed or self-employed, your financial situation has likely been impacted by Covid-19 in one of these ways;
- Job loss,
- Income reduction,
- Loss of business (reduced revenue, business suspension or shutdown),
- Unprecedented price increases
A survey conducted at the end of 2020 on the impact of Covid-19 on the financial wellbeing of Batswana by Lima Consulting revealed that only 13% of respondents had no savings before the pandemic started yet by January 2021 this number had shot up to 40%. This means in one year the pandemic wiped out savings for 27% of the respondents. Imagine how much this number is now.
With an expected economic recovery of 8.8% for 2021 it seems things are looking up for us at a national level but how are things looking for you personally?
Inflation has shot up beyond Bank of Botswana’s maximum limit of 6% as it edges close to 9%. Truth is, you don’t need economists to tell you this as you have likely felt the rising prices personally from electricity tariffs, fuel, and all other goods due to VAT and general price increases.
So, the question remains, with all this happening and things looking like they’ll keep getting bad before they get better, what are you doing to survive the financial impact of Covid-19? We must always remember that though the Government is responsible for us its primary objective will always be recovery of the economy at large which as mentioned above they are succeeded in boosting. This means that you, as an individual, must look out for NUMBER 1 – YOU!
Your Covid-19 Financial Impact Survival Toolkit
Right now is likely the toughest time we will ever face both in terms of our health and financially in our lifetime. Right now is not a time to be carrying on as usual even if you have not been impacted financially. Here are three simple strategies you can implement now to help you survive the financial impact of Covid-19.
-
Have emergency savings
Having savings has always been a good habit to develop but the Covid-19 pandemic has been a good lesson to most of us about the importance of having savings because that rainy day they always talk about, is here and now. Under any circumstances – but especially now – savings are always your best line of defense.
Emergency savings, however little, would go a long way in seeing you through should you;
- Lose your job
- Experience reduced sales and revenue in your business,
- Need medical care thus incur medical expenses, and
- Have general financial gaps that you would normally fill by getting into debt.
-
Tighten your expenses
This is a tough one for most of us because we are used to our respective lifestyles and adjusting it tends to induce feelings of deprivation. It may be helpful, therefore, to not shock the ‘system’ by doing too much too soon. A small adjust here and there goes a long way.
Tightening your expenses helps in two ways; you free up a bit of money which you can direct towards savings (either start up saving or top-up), and should you find yourself with your income reduced or experience income loss, you will find it easier to tighten your expenses further if it’s something you’ve done before.
-
Draft a will
Batswana, this is important. Please do this. In our society we don’t like thinking about what will happen to us when we die but we ought to. We typically think about things up to the funeral only – hence funeral policies but what happens to our estate, no matter how small, is actually more important.
Without a will, your estate would likely be distributed in a manner that you wouldn’t agree to if you were alive. Though it is important for all of us to have a valid will in place, parents without a will are doing a great disservice to their children as problems that could have been avoided almost always arise.
We are living in unprecedented times that are challenging on all fronts. Though there is not much we can do about most of it, there is a lot we can do we ensure we survive the financial impact of Covid-19. This article offers just a few steps to get you started in the right direction.
Let’s continue to keep well and safe.
Stay Ready So You Don’t Have To Get Ready!!!