A second wave reminder that financial plans need to be resilient!

So we have entered into the second year of the pandemic that has shaken the world to its core and we in South Africa are facing a second wave of COVID-19 which has been exacerbated by our own second strain.

Eskom started the year with its load shedding disruptions and so as the old saying goes ‘Africa is not for sissies.’ It isn’t going to help us however to just throw up our arms and surrender or even to fear the future.

South Africans are resilient and will fight back against all odds, so let’s look at what we can do to stand firm against what seems to be a constant bombardment of difficult circumstances.

From a financial and long term planning point of view, this second wave is simply a reminder that our financial plans too need to resilient. We achieve this through a three-pronged approach. These are: budgeting correctly to ensure financial stability; making savings on operational costs wherever we can and ensuring we retain a holistic, well-constructed long term financial plan.

Take stock and budget carefully

We need to ascertain exactly what losses we may have suffered, if any (some businesses report doing better business than ever despite the pandemic) and ensure we budget accordingly.

Budgets need to be tight, contain records of all income and potential income and expenditure in particular needs to be contained and correctly predicted, even if it means breaking it down into smaller portions to ensure that all spending is covered.

Ensure you have taken taxations, holidays and poor months into account and base your expected income projections on mean averages of past performances – not on the good months you think you may have. We really don’t know how long or how many waves we will have to face before we are done with this pandemic.

Remember too that profit is not just what remains after expenditure is deducted – savings for growth and expansion is an essential part of every budget.

Take advantage of what you can

Financial budgets, when there are so many advantages to be had from more people working from home, should be aligned with the new ways we operate and the lessons learned from the financial knocks we have had to take. Accountants need to be creative as businesses become more streamlined and self-contained and begin to look to alternate operational methods.

There are massive savings to be had through cutting costs on petrol allowances, time wasted travelling and on hiring office space, especially as the year progresses and some commercial rental leases start to expire.

Holistic, resilient long term financial plans

No matter have many waves we have to face, or how many times we get knocked down, one lesson we should have learned by now is that it is better to float than to swim against the tide!

Long term, well-constructed resilient financial plans that offer solid buffers against unexpected events (like income protection and dread disease cover), as well as wealth creation and retirement planning, must be retained and managed until the storm has passed.
The past has taught us that like all other challenges these too will pass and there will be a season of great abundance and harvesting of the seeds we plant and nurture today.

We understand that every challenge is unique

Hereford Group has built a reputation over the last 25 years on understanding that no two financial plans or portfolios are necessarily alike, as we and our businesses are all uniquely different.

We don’t sell policies, we construct futures, and your situation may not be as difficult as you think it is if you simply allow one of our expertly trained and experienced Financial Advisors to review your short and long term plans and requirements.

Contact us today to stop fearing the future and start building buffers against however many waves or challenges life may throw at you. Stay safe – and stay positive!


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