Umm Umar Muhammed

Wages have been slashed, work contracts have been terminated, and the pay raises that many were expecting have not materialized. There have been few people whose finances have not been affected in one way or the other by the COVID pandemic. The past two years have, in short, been very challenging. We are heading to the so-called festive holiday season, and generally during this period, things can get a little out of hand, and you could get a bit of ahead of yourself. Come January, some might find themselves in a deeper hole than they can dig themselves out of. Radio Islam spoke to Azhar Mia, who has 15 years of management experience in banking and finances with Albaraka Bank.

Mia discussed the term ‘post covid saving’ saying that while covid doesn’t seem to be coming to an end, the term actually refers to a period when individuals start to save again after having being adversely affected by COVID. He explained that people, in general, have been affected financially during the pandemic, due to lower incomes or salary cuts, and so forth. This had forced some to cash out their investments, suddenly, for, for example, emergency expenditure for medical bills. These kinds of events have made it impossible to save. Mia said, “Once they have recovered from this, they should immediately start looking at saving, so if you do this, this is known as post COVID saving.”

Since we are still in the middle of a pandemic, with its accompanying financial consequences, Mia said that the best way to nevertheless begin saving, is to simply START. He said, “A lot of us actually think about savings, or we have a goal that you want to save, but we never actually get down to actually doing it.” He advised that it was important to start small, saying, “Albaraka Bank has accounts where you can start saving from a minimum of R100 a month.” He said that this would will allow one to develop the habit to saving, as well as inculcate the culture of saving. He added that it would be a good move contact a financial planner, or visit your nearest branch for advice about how one could start saving.

Mia said that it was vital to stay disciplined during the holiday period. He said that economic conditions were currently quite tough, so consumers should focus on purchases that they actually need. His advice was to develop a budget, as well as to find ways where day-to-day spending can be cut down on. Mia advised, “I think one of the important things that people can also focus on is to stay away from impulse buying, and make sure that you actually spend wisely. So, also save on your regular purchases.” He added that we should budget for savings and avoid using credit, to achieve financial success.

Regarding developing a budget, Mia suggested consumers make a note of their expenses. He said, “To do literally understand what your income is, note down your monthly expenditure…. [then] identify what is important, what are the things that you can do without.” Examine what you have to spend on, and where you can cut costs., for instance, “if you’re going for coffee every week, look at how you could cut that down, or maybe look at ways about where you can save on having a coffee at a different place.” Aside from developing a budget, use a common rule whereby you use 50% of your money for the items that you do really need, 30% for the items that you want, and 20% for saving or donation.

Having money saved helps in emergency situations. It acts as a cushion should you find yourself suddenly unemployed. Mia said, “Money also should be available for the important things like education or placing a deposit on a house or vehicle purchase.”