FinanceHealth

Will Coronavirus Push More People Towards Debt Management?

The Invisible Threat that Could Require Real Debt Management

Coronavirus seems to have affected us all, on a global scale. No one could have quite predicted the impact this virus would have and how it has shut down whole countries across the world. It has already put many self-employed people out of business, as well as smaller and larger companies who are struggling to keep afloat when their trading has been totally restricted and they have been forced to close for the foreseeable. 

debt management

So what will this mean for personal finances? Many experts are predicting the impact this will have on personal bills, cash flow and debt. Will families be able to go back to work after all of this? Will employers be able to pay their staff? Will people have to rely on more credit that ultimately gets them into more debt? The future seems unclear, which inevitably causes a lot of stress and anxiety.

However, Governments around the world are coming up with solutions to help their people stay afloat, and weather this storm. 

According to Business Tech, the Government in South Africa is trying to instate some measures, which includes a 4-month tax subsidy for low-income workers. This can help workers to save some money at this crucial time, rather than turn to loans or overdraft facilities. Well known wealthy families in South Africa, the Oppenheimer and the Ruperts, also both pledged R1 billion to help support small businesses during this crisis. 

The President announced that 200 million R will be made available to small and medium businesses in the tourism sector. There is also talk of a ‘National Disaster Benefit’ fund that would pay workers compensation if they have been laid off because of the effect of the coronavirus. Early discussions indicate that about R30 billion could be made available from this, and it would pay workers at a minimum rate of R3,500 a month, which is the national minimum wage. Announcements are expected to be made on this soon. 

If you are personally worried about your debt situation since the coronavirus, Wonga suggests investing some of your efforts into debt management: 

“Debt review, also known as debt counselling, is a process where someone who is indebted, or feels that they are over-indebted, can approach a debt counsellor.” 

debt management

A debt counsellor would be an ideal option for many people in South Africa who may not know all of the options available to them. A debt counsellor will be familiar with all solutions, including those new solutions introduced by banks or the Government, so they can advise the best course of action. You must ensure that the debt counsellor you pick is regulated by the National Credit Regulator (NCR) under the terms of the National Credit Act (NCA).

It is important to remember that however you have been affected financially by the coronavirus crisis, you are not alone. Millions of people – in fact, billions – will be faced with tough decisions over the next few months. Whether you are worried about finding work, worried about childcare costs or don’t know how you will be able to afford bills, we are all in this together, and with Governments eager for their economies not to crash into a deep recession, they are implementing working solutions to assist people like you and me. It is also wise to be prudent with your money for the next few months – try and save where you can, and do not buy unnecessary items. You can make a real impact on your finances by cutting out those costs which can eat into your personal budget each month. 

How has the coronavirus affected you? Tell us in the comments below. 

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