REASONS TO MANAGE YOUR FINANCES WELL POST-DOWNGRADE
The funny thing about this economic downgrade is that, as a consumer, you won’t start to feel the effects immediately. It will take some time to trickle down to grassroots level, but once it does, you’ll want to be ready. Here are a few unexpected ways in which it could impact on your livelihood:
There are going to be job losses
Our economy is already growing at the slowest pace it has since 2009, and official unemployment stands at 27%. Without macro-economic stability and policy certainty, industries like banking, auto repair and construction will get less work, leading to significant job losses. Furthermore, with the resultant confidence being eroded in our critical institutions and economy, lower investment will in turn mean a negative effect on job creation, which means more school-leavers will battle to find employment when they enter the job market.
Food and fuel prices will go up
If the rand goes into free fall and reaches R16 or R17 to the dollar‚ inflation will rise‚ which means food and fuel prices will rise. These are the basic building blocks of a household economy, so when these items get substantially more expensive, it can strangle your domestic budget very quickly.
Short-term insurance is going to become very expensive
Here's why: The cost of motor parts (most of which are imported) will raise drastically, which will lead to increased repair costs, which leads to higher insurance premiums. Once consumers drop these policies because they can no longer afford it, they will be exposed to enormous risk in terms of loss or damage to major assets like their homes, cars, etc.
If you are like many South African consumers who already cannot keep up with all their monthly payments, now is the time to address your debt. The country’s economic outlook is not set to improve any time soon, so take care of your finances before interest rates spike and your instalments grow even larger.
Get in touch with a Libertine Consultants representative today to discuss your options.