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  • Writer's pictureLisa Perry

Getting Ahead of the Recession

Updated: May 3, 2023




Noun: “A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters”

In layman’s terms: when business sales and revenue decline and growth is halted, money is not flowing through the system but rather reclining. Pretty much exactly what we have been experiencing in South Africa for a while now. However, it seems a bit different under the current unprecedented circumstances, as small to medium businesses are shutting down. I’m guessing most of us know someone who has either lost a business or their job. And this is just the beginning.

While we sit at home, I figure there are only two choices we have, we choose to live or we choose to die. I’m assuming we are all going to choose to live, so how do we do that? We change our habits; the way we live and the way we spend.

In every recession or life change there are always opportunities, we need to block our ears from the negative noise and look inwards, be selfish, if you will.


Wouldn’t you like to be a website designer during these times, or own shares in Amazon or Alphabet. Takealot used to deliver in 3-5 days, my last online order was placed last week Monday and is only hitting my front door this week Wednesday. I interpret that as business is better than usual during the lockdown. Meaning there are without doubt some markets and industries that will fly through this period, which will also not last forever. Let’s look at it as a one-time kick in the pants.

What can you do in preparation for the inevitable in the coming months?

1. Declutter: Declutter your home, your head, your diary and your finances. Decluttering removes items/emotions in your life that are unnecessary, wasteful distractions. You don’t need them, and you don’t want them. A messy cupboard starts a day off with irritation. The food at the back of the cupboard never eaten creates guilt. Messy finances create worry. The project you started but haven’t finished: Throw it away or finish it, but don’t let it lie around. I have taken to decluttering social media, I remove people that I feel don’t feed my tank or support my positive purpose; not to say an opposing opinion isn’t ok, just that I don’t want to hear negativity, or views that drag me down.

2. Have two budgets; The first budget is your bare minimal requirement to get through the month. Rent, bond, utilities, food, short term and long-term insurance and your savings. Why savings? If you are contributing to an investment you are currently buying into an abnormally cheap market, which will benefit you in the long run. As the market recovers, the value will go up – when it becomes time to sell, you will be selling at a much higher price, therefore increasing your long-term capital, due to compounded interest and you would have taken advantage of a crisis. Your insurance either long term or short term is an absolute must as this is you looking after yourself and your loved ones. I do strongly recommend you review your short term and long-term insurance, there are opportunities for better deals in this market.

Your second budget is your old pre-covid budget, just modified. I have no doubt that the situation has allowed, or even forced, most of us to think through what we need and what we really want; I know in my home we want more time together going forward post-lockdown, meaning I should budget less working hours which could mean less income – this becomes an expense in my budget. Yours could be more time with friends but less need for those lunch time take-aways at the office canteen. Exchange those out for homemade work lunches. This really is an opportunity to rethink what you want vs what you actually need and needing to be social is a real thing.

3. Emergency Fund: All that money that you are saving should be invested into an emergency fund, an account which pays a higher than inflation return but is also easily accessible. You don’t want it sitting in a 6-month call account. The Investec Corporate Cash Management Funds are currently giving yields of 2% (REAL YIELDS = Yield – Current Inflation). What amount should I have in this account? 3 – 6 months’ worth of salary. If you only cover your expenses, which you can do and the retrenchment or loss on income becomes a reality, your stress levels will escalate leaving you flat footed. Plan to take the pressure off now.

4. Learn to live within your means: If you are living in a property that is really above your pay grade, down scale. Do you really need or watch DSTV? Is Netflix not a better, cheaper option? How much food is sitting in the bottom of your freezer? Time to be realistic. Remember it is not forever - it is an opportunity to allow yourself to regroup and recover.

5. Live your best life: Find your purpose and practice every day to fulfill it. If it’s writing that inspires you and makes you happy, start your blog, your book. You will then be able to supplement your income with your passion. Time is a commodity that we seldom have excess of, use it wisely. Start the business you always wanted as a side project. If painting is your thing, create an online website to showcase your work.

6. Pay off your highest interest debt: Yes, most banks have afforded payment holidays and so forth. If you are still earning, now is not the time to use them. Interest rates are lower than we have seen in a very long time and could continue to decrease in order to stimulate the market, kill the credit. Keep your repayments the same as to pay off more capital each month. If you can add to your payments, this will allow you to reduce expenses should your income reduce.

In summary, choose to live. Take the kick in the pants on the chin, get off your butt and start doing the hard work. It will pay off, you will be happier even if the world around seems to be crumbling, and this too shall pass. Take the opportunity to declutter, regroup and redesign the one life you have to make it worth your while.

Please feel free to share your thoughts and successes.

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