HERE TO HELP YOU STAY AHEAD OF YOUR FINANCES
When it comes to your financial wellness, preparation is half of the battle. But while you’re juggling schooling the kids, working from home and family life, all during a pandemic, planning ahead may not be at the top of your priority list.
At Woolworths Financial Services, helping you navigate this new reality and the impact it’s likely to have on your financial wellness, is what we care about. So, we’re giving you a look at upcoming financial trends post COVID-19, to help you stay informed, give you peace of mind and help you make healthy decisions to better prepare for the future.
A cloudy forecast
As the saying goes, “Things might get worse before they get better”. As reported by respondents in a survey by TransUnion in the ‘COVID-19 Playbook’, while 88% are concerned with paying their bills and loans, 75% of respondents do have plans in place. Due to extended lockdown measures, more localised activity disruptions from ongoing COVID-19 outbreaks, job losses, and the expiration of some of government’s economic relief initiatives, uncertainty is still high, according to a report published by ABSA. The IMF forecasts that South Africa’s unemployment rate will rise to 35.3% (source: TransUnion ‘COVID-19 Playbook’).
As stated in a ‘Transunion Survey’ July 2020 report ‘The COVID-19 Pandemic’s Financial Impact on South African Consumers’, respondents reported that they will dip into their savings – money that had previously been set aside for education, emergencies, even holidays. To help with their cash flow, almost 38% of affected respondents say that they are paying only a partial amount against their existing debt, with 37% using their savings to help pay their current bills or monthly commitments.
LUCKILY, WE’VE COME UP WITH A FEW WAYS TO HELP YOU OUT:
1) We’ve reduced your monthly instalments:
To support our customers, and help you manage the monthly payments on your Woolies Card, we have reduced the minimum monthly payment due amount.
WELLNESS TIP: It’s always recommended that you pay more than the minimum amount due. This will not only reduce your outstanding balance and the interest incurred, but also make credit available for emergencies and essential items.
2) We’ve extended the Woolies Payment Relief Programme
3) Get a limit increase without leaving the couch
4) Credit is now more affordable
Good news: Low interest rates are sticking around. The need to provide support to an economy that is being hard hit by COVID-19, saw the South African Reserve Bank cutting the repo rate to a new all-time low in July. This is welcome relief, and means lower interest rates if you have bond and car repayments, as well as any other credit commitments.
WELLNESS TIP: It’s always wise to use any money that you have saved from either paying lower instalments, or the savings you’ve made by working from home – such as fuel, coffee runs, takeaway lunches and more – and paying it towards your short-term debt. This will help you maintain a healthy credit record, qualify for better interest rates, and pay lower finance charges on any credit products you may have.
Regarding inflation, given the considerable economic slack, it has remained under control so far. The Reserve Bank deems that the risks to the inflation outlook remain balanced, and expects that the subdued economic backdrop will keep it well below the midpoint of its 3.0%–6.0% target band this year. A slower recovery means there’s lower risk of inflation, so central banks will be able to keep interest rates low for a while longer. As long as inflation remains at bay, you may be able to make the money you have saved go further and last longer. (Source: ‘principal.com’)
(Source: https://www.focus-economics.com/country-indicator/south-africa/interest-rate)