Since the S&P downgraded South Africa’s investment ranking to junk status, a lot of commentary has been published on the internet. Much of this information, however, is thin on advice about what can be done to mitigate the consequences for business and lifestyle. Here are a few things that South Africans should start doing right away.
1. Avoid a knee-jerk reaction
Don’t let the opinions of others let you panic. It’s easy to get caught up in the hype but now is not the time to make impulsive decisions based on thoughts and opinions of others. Keep a cool head and stick to your plans over the next few months.
2. Pay off as much debt as possible
It may seem like a radical decision, but it’s best to divert most of your nest egg and emergency money to pay off as much debt as you possibly can. Pay of the highest interest rate debts first. If your home loan is your only debt, then use your savings to reduce the capital portion of your home loan.
3. Reassess your budget
Take a long, hard look at your budget and figure out how you can save more and put every extra rand towards becoming debt free. Cut back on luxuries and unnecessary spending as soon as possible.
4. Find new ways to make more money
Start exploring new opportunities in your industry or niche so that you can make extra money. Alternative sources of income can go a long way in helping you stay ahead of the curve.
5. Don’t sell properties without proper planning
If you are a homeowner or own properties, don’t put your property on the market without proper planning. When people try to sell in a hurry, they almost always lose part of the equity in their homes that they have worked very hard to build up.
6. Reassess your renting situation
If you are renting, consider moving to a smaller and cheaper place or somewhere that is closer to work so that you can spend less on travel costs.
7. Don’t take on new financial responsibilities
Now is definitely not the time to take on new debt or additional financial responsibilities. Ensure that all your policies and provisions are up to date but don’t get suckered into any extra ‘special covers’ or ‘gap cover’ options.
Full thanks and acknowledgement are given to www.cbn.co.za for the information contained in this article.