As South Africa enters day 52 of the COVID-19 #lockdown, many families are feeling the financial pinch. If you are feeling the pressure and do not know what to do or where to start, here are some of the options that I have considered:
1) Extended bank repayments
Contact your bank, vehicle finance, loan providers, clothing stores and whoever you owe money to. Ask them if you qualify for a reduced payment or a payment holiday on your monthly payments. Note: There will be financial implications later if you decide to opt for any of these options, but many families are forced to do something now for that immediate relief. An additional suggestion, when you get back on your feet, try to remedy the above arrangements.
For example, many banks are providing customers with a three-month payment holiday from their monthly home loan payments. The interest and other charges will be charged to the account and three additional months will be added onto the loan period. If you were not in good standing with your credit providers before the pandemic, they may be reluctant to provide you with any type of relief.
2) Insurance alleviation
Your short-term insurance provider may be able to provide you with premium relief. It appears that certain companies would rather get some payment than nothing at all, so it works both ways.
For example, my broker reviewed my policy and we looked at things that we can remove temporarily. The insurance company provided me with a further reduction, saving almost R800 a month. My husband and I removed our cellphones from our insurance. While it seems like a plan to remove certain items, don’t forget that there are also risks to consider in doing so. If you for example, damage or break the items that you have removed from the insurance policy, you will be eligible to have them fixed and/ replaced. Also, note that some insurance companies have a grace period, if you are late with your premium. If you exceed this grace period, your policy will lapse, and you will no longer be covered.
3) Costs associated with the children’s school
If you are struggling to make ends meet, negotiate with your children’s schools, transport and aftercare providers. Most requests are dealt on a case-by-case basis and you can request for no payment or a reduced payment; as the services are not being rendered.
For example, I received a 50% reduction on transport fees for the month of May. In addition to that, a further 50% discount in aftercare fees for May and a 100% discount for June 2020. Many schools are reluctant to give you a 100% discount, as this will have a devastating ripple effect on the livelihoods of all school-dependent salaries.
4) Medial aid assistance
What I have found, is that some medical aid companies provide you with the option to downgrade your medical aid plan to a lower plan. Other companies may take the monthly premium from your medical aid savings, if you have any. We did not take either of these options for now, as we were able to free up some funds from our other options.
When you make the above mentioned inquiries, please ensure that you do so with honesty and persistence. It will take some determination when it comes to waiting on the telephone for long periods of time or sending emails to the providers - but do not give up. Ideally, the aim is to remain in good standing with your credit providers in order to maintain a good credit score.
Remember, be safe and stay at home if possible. Only go to the shops to buy essential items (needs before wants). Wash your hands with soap for at least 20 seconds (sing Happy birthday once). Sanitize your hands and clean surfaces frequently. Cough or sneeze in your elbow.
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Disclaimer: Please note that I am not a financial adviser or accredited to provide you with financial advice. This is an opinion piece. Contact an authorised financial adviser if you need financial advice.