Proactive rather than Reactive

Eskom (and all other SOEs) are in crisis due to an incompetent and severe lack of planning. South Africa is now scrambling in reaction to an electricity disaster which was inevitable years ago and should have been averted with an effective plan. 

Our households face many life-changing events such as death, disability, retirement, divorce and retrenchment which can lead to a financial crisis for which we need a plan. We need to improve and develop a level of competence in understanding financial aspects that affect our households and put in place a plan to provide for to them. 

Debt is not the answer

One glaring concern in our State of The Nation is the souring debt which now amounts to trillions.

With a growth (GDP) projection at nearly zero, we cannot cover the cost of this debt. We will either have to rapidly grow the economy (difficult without electricity), borrow more money or increase taxes. So brace yourself for the budget speech. 

Households which have borrowed too much to keep their heads above water are now facing the crippling outcome of a rising cost of their debt. Options are limited to get out of this trap. Borrowing more is certainly not one of them. It’s either increasing income and/or slashing expenses. 

Don’t play the blame game

SONA pointed to the COVID pandemic, floods and protests as contributors to our crisis. Blaming is a way to divert from responsibility.

 

Households which take full accountability

over their financial planning will have their resources well placed to navigate through whatever financial problems come their way. Creditors are not sympathetic to reasons and excuses when households find themselves in a financial crisis. Your precious assets are at stake. 

The sad State of our Nation is a consequence of poor incompetent leadership. We have learned some harsh lessons on what not to do which we should apply to the state of our own households.