Staying financially afloat

South Africa’s junk status downgrade has had a number of dire consequences for both the country and the populaces, economists have warned that the downgrade to junk is likely to trigger a recession as its effects spread to the wider economy. The downgrade greatly complicates the prospects for South Africa being able to stage an economic recovery. Without growth recovery, employment growth and revenue collection will possibly decline.

The state of the economy affects every South African, directly or indirectly. Countries like Columbia, India and Uruguay who have experienced such a downgrade have had to spend an average of 7 years climbing out of downgrade and back into investment-grade. For the mere fact that it is unknown as to how long it will take South Africa to recover, individuals should consider ways to staying financially afloat.

“If you make hasty investment decisions now, without a clear understanding of what is to come, you could increase the risks in your investment portfolio. At this time we need to make careful, strategic and well-planned moves to weather the impending storm. It is important to remain calm and stay invested,” Phillip Kassel -Financial adviser

“Cutting down on indulgences such as eating out in restaurants or buying clothes on a store-card that has a high interest rate, or even packing your own lunchbox instead of buying takeaways, will go a long way towards enabling you to save a little extra each month. Even a small increase in the amount that you put away each month can make a huge difference over time, thanks to the power of compound interest” Phillip Kassel- Financial adviser

Read more on how SA can come back from junk status here