Skip to content

Covid-19 Forcing S.Africans To Reevaluate Their Relationship With Money

South Africa’s deep economic crisis, now worsened by COVID-19, has once again brought into sharp focus the importance of managing personal finances, particularly saving for a rainy day.

Scores of South Africans have been left with holes in their pockets due to the national lockdown and the situation is not about to improve anytime soon.

The crisis has resulted in some job losses, while many others have been suffering through weeks of “no work, no pay”.

It appears that now more than ever, South Africans have been forced to re-evaluate their relationship with money.

Left, right and centre, COVID-19 is suffocating businesses and thousands of employees are bearing the brunt.


The South African Savings Institute’s Prem Govender said that we had become a nation of spenders and not savers, even when there was no money to spend.

“We have developed a culture of borrowing money to satisfy our desire for acquiring things that we don’t need but desperately want. It’s become a culture of instant gratification – I want it and I want it now, even if I have to borrow to get it. Is it no wonder then that South Africans are literally drowning in debt and using the bulk of their income to service debt?”

Govender said that there were, however, sections of the population that did believe in saving, like older people with limited financial literacy who put money aside through investments such as stokvels.

She said the younger generation on the other hand, despite their higher levels of education and knowledge, didn’t give too much thought to saving.

“They are, unfortunately, caught up in a world of consuming constantly and appeasing their spending desires. This then is the generation that has no desire to save or provide for retirement. They simply live for the day and believe the future will take care of itself. Unfortunately, that is not going to happen.”

Govender believes that COVID-19 and the lockdown will serve as a huge wake-up call to many South Africans, adding that they would be shocked into seeing money differently.

She foresees a shift in spending trends and said she did not believe that anyone would emerge from this crisis unscathed.

“It’s going to force South Africans to re-examine where their money goes. If they don’t, then sadly they have learnt nothing from what is turning out to be the biggest catastrophe of the century.”


More people are inquiring about access to their retirement fund benefits, as uncertainty resulting from economic pressures continues to grip the nation.

The COVID-19 pandemic has had a devastating impact on employment across South Africa, with some companies having no other alternatives but to retrench workers to cut costs.

Some people have used up most of their savings and now, desperate to put food on their tables, they are forced to dig into their nest egg set aside for retirement.

In its recent business impact survey, Statistics South Africa laid bare the adverse effects of COVID-19.

Having canvassed more than 700 businesses across various sectors, more than 46% said they had closed shop temporarily, 28% indicated that their workforce had cut down working hours, while nearly 20% said that they were laying off staff in the short term.

Because of this, financial planning for many employees and companies has been thrown into disarray.

Financial services company, Liberty, said now more than ever, advisors had a massive role to play in guiding their clients through this hugely emotional time.

Senior legal marketing specialist Geraldine Macpherson: “We’re seeing a lot of queries with regard to employers who are not able to pay the full contribution anymore to the retirement fund on behalf of employees simply because of cash flow. We are seeing retrenchments at big entities like SAA but also smaller to medium enterprises that just can’t afford to keep the same amount of staff on their books. So we are getting a big increase in queries about accessing retirement fund benefits.”

Macpherson said that in an ideal world, one shouldn’t touch their nest egg.

“You should put it into a preservation fund and keep it to one side for retirement because the reality is that if you take it now, what are you going to have when you do retire. But in this very strange world, people might find themselves in a situation where they don’t know where they are going to get their next paycheck from, so if you take this money and lock it away, what are you going to do to put bread on the table?”

Macpherson said that it was critical that individuals facing retrenchment cut down on monthly expenses as much as possible.

She also advised people to continue to maintain their life covers due to the uncertainty that came with COVID-19 pandemic and ensure their wills were up to date.


Experts are offering advice for those who may be struggling with savings and investments because of the lockdown-induced cash crunch.

Decades-old saving methods such as stokvels collect roughly R50 billion annually from more than 800,000 groups across the country.

But many people are experiencing financial shortfalls during the COVID-19 pandemic and this is affecting their contributions.

If you are a member of a stokvel and are struggling to make monetary contributions during these uncertain times, communication with the rest of your savings club is key.

This is the advice of financial educator and the author of the book Stokvels, Palesa Lengolo.

“What I like about stokvels, they are already like a support group where it’s comfortable for one another. This is really where the spirit of ubuntu has to be put into practice. If you are in a stokvel and some of you are not affected financially by what’s happening right now with these uncertain times, it is time to now take up that responsibility to continue with your contributions, in order to cover those that can’t afford to at the moment.”

Lengolo said most stokvels had a joining fee, which was usually used in the case of an emergency.

“I hope most stokvels were keeping their joining fees at least in an interest-bearing account while waiting for those who can’t contribute or pay. They can use that money in the meantime. So now you’ve got that support structure in your fellow members but they won’t know this if you won’t communicate. Most people are in stokvels with people that they are close to, people that they understand, friends or family, so you need to be frank and have the conversation.”

Lengolo said the three most important things to remember regarding finances during this global crisis was to remain calm, avoid making any panicked or hasty decisions and to budget and control spending.