Spikes in unemployment due to the Covid-19 pandemic have been experienced around the globe, and South Africa is no exception. It can be easy to disengage from the reality of joblessness until you receive your final paycheque and say goodbye to work colleagues. Only then can you understand the feelings of shock and fear as you consider the impact on your personal finances.
Research conducted by the School of Economics and Finance at Wits University shows that those who have lost their jobs, or who were temporarily laid off, report significantly more vulnerability to depression than those who have kept their jobs.
“Unemployment can affect you profoundly, in the same way, that people grieve for the loss of a loved one,” says Shafeeka Anthony, Marketing Manager of JustMoney.co.za, an online source of trusted advice on money matters.
“You may experience stages of denial, anger, bargaining, and depression. For many people, a job is part of their identity. Being out of work can cause feelings of loss and disorientation.”
It’s helpful to do your best to stay calm and to see this as a temporary setback, not a permanent situation. Following a plan will help you to address the situation logically and to stay focused.
JustMoney suggests ten tips for dealing with job loss:
Draw up a budget:
Make some tough decisions and prioritise necessities rather than nice-to-haves. Paying a home loan or rent, groceries, electricity, children’s education are essentials for most people. Gym subscriptions and takeaways can be dispensed with, although you will still need connectivity for job searches and interviews.
Factor in tax:
If you are due a tax pay-out, allocate it when planning your budget. Use this money to trim your debt, or to pay for your household costs.
Talk about your situation:
Don’t feel you have to handle all this on your own. Discuss the situation with your spouse and get your family on board. Inform your bank manager, financial advisor, and creditors. You are not the first person to experience job loss, and financial institutions have options in place.
Apply for unemployment benefits:
Work with your former employer and register online, or visit your nearest unemployment centre, to ascertain the benefits you can claim. Ensure you have the correct documents at hand, such as your ID, previous payslips, and a letter from your former employer.
Use savings with caution:
if you have set aside emergency money to cushion you for three to six months, use it judiciously.
Don’t crack that investment nest egg:
Building up a portfolio for your retirement will have taken a great deal of time and patience. Avoid touching annuities and other investments if possible, as this will set your retirement back significantly.
Avoid loans:
It’s tempting to relieve stress with a short-term loan. However, this comes at a cost. Avoid debt if you possibly can. If you are already struggling to pay back debt, seek help.
Expand your side hustle:
Be flexible and look for fresh opportunities. You may have experience in freelance writing, online teaching, or coding. Capitalise on these money-making skills.
Tap into community programmes:
A positive outcome of Covid-19 is that neighbours are taking care of one another. There are many well-established community organisations that are adept at sharing resources. Get involved, you will realise how much you still have, and if necessary, draw on them for help.
Avoid broken promises:
It’s sad but true that fraudsters often target people when they are most vulnerable because of financial hardship. Be aware of ‘exclusive offers and opportunities to strike it rich.
The widespread nature of the Covid-19 crisis may be of little comfort when it impacts you directly, and you feel super-stressed about taking care of your family, concludes Anthony. The reality is that we are living in times of great uncertainty, but there are also many opportunities to learn, grow and recover. Seeing the reality of your situation, sizing up your options, and taking responsibility can help you to move forward.
Read a JustMoney article on avoiding financial fraud here.
