Recession Proof your finances

In a time of economic uncertainty and financial instability, many ordinary South Africans are feeling the impact of the recent recession and credit downgrades. With interest rates and inflation on the rise, it can be daunting for individuals to navigate the complex financial landscape. However, there are steps that can be taken to make finances more resilient and recession-proof. Schalk Malan, CEO of BrightRock, shares valuable insights on how individuals can protect their finances during these challenging times. The recent recession in South Africa, the first since 2009, has left many feeling uncertain about the future. The verdict from rating agencies and the technical recession have compounded the challenges faced by ordinary people. In a conversation with CNBC Africa, Schalk Malan emphasizes the importance of protecting income and employment, ensuring adequate cover in case of illness or disability, and effectively managing debt. Malan emphasizes the need for individuals to prioritize debt management, starting with the most expensive debts, such as credit cards, and consolidating debt where possible. He also highlights the importance of behavioral economics in changing habits and achieving financial success. Malan further discusses the opportunities for growth during recessionary periods, pointing out that volatility can bring about opportunities for those who are prepared. By looking at expenses, including insurance premiums, individuals can identify areas where savings can be made and cash flow improved. Separating luxuries from necessities is crucial during these times, as individuals reassess their financial priorities and make decisions that will benefit them in the long term. One key aspect that Malan emphasizes is the need for family planning and having a financial safety net in place. By ensuring that the basics are covered, such as insurance for unforeseen circumstances and savings for emergencies, individuals can feel more secure in their financial future. Making conscious decisions about discretionary spending, such as holidays and luxury items, can also free up additional funds that can be invested or saved for future opportunities. As individuals face the challenges of a recession and financial uncertainty, the advice provided by Schalk Malan offers a roadmap to financial resilience and stability. By taking proactive steps to protect income, manage debt, and prioritize financial goals, individuals can weather the storm and emerge stronger on the other side. By implementing these strategies, ordinary South Africans can recession-proof their finances and build a more secure financial future.