Financial Data
Updated 26 Feb 2020


Financial planning when the going gets tough

How do you budget and plan, either for personal or business, in these turbulent times? 


Hilda Lunderstedt, 28 February 2016  Share  0 comments  Print


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I guess the answer to this question is … with great difficulty and a lot of assumptions, but one thing is for certain, the current state of SA is worrisome and life will become very expensive and insecure for many South Africans. 

Why do I say that? Firstly, as a country that imports most of our goods, we are heavily dependent on exchange rates. 

At the current fluctuation of exchange rates, goods and food will become increasingly expensive. In order to attract foreign investment, governments will increase interest rates, which is great if you have cash to invest but no so good if you have a lot of debts. 

Related: 5 Essential traits of the entrepreneurial business woman

Thirdly, we are known for our rich resources and exports of commodities. The prices of commodities are at all-time lows, adding to pressure to mines and threatening lay-offs and bigger numbers of unemployment. South Africans, in general, do not do well as a saving nation and many households and businesses, have no buffer or reserves in these tough economic times.

Personal planning

For personal planning, my suggestion is to do your budget on a spreadsheet. Understand exactly where you spend your money. Set a budget for each of the categories of spent and stick to this.

If you have debt, review the cost of this i.e. what interest rate you are paying and work on a plan to pay this off – from highest interest to lowest. You will be surprised to see how much of your hard-earned money is paid on interest and if you pay off this debt first, how free you will feel to have cash to spend.

I have a full management system which I will explain in my next article.

Scenario planning

Scenario planning is worthwhile for both personal and business planning.  On a personal level, this means you plan different situations, such as what happens to your car payment, bond, and credit card payments due if interest rate goes up. 

Related: What exactly is Crowdfunding?

When you plan ahead and have a plan of action for the eventuality, you will feel more in control and less helpless and frustrated. It might sound trivial, but psychologically it is vital to feel in control of your financial affairs. It will prevent you from doing something out of desperation or act on impulse out of fear.

Plan with your family

This is also the time where families and teams should work together. For families, if the whole family is involved in the budgeting process and understand the financial situation, it could be an adventure to see how they, as a team, work together to reduce their household debt. For companies, the whole team should be responsible for the management of expenses. 

This includes the senior management team. So often the whole company has to reduce expenses, cut back on necessities but the senior management do the opposite. This sends a very bad example throughout the business. 


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About the author


Hilda Lunderstedt

As one of the selected few South African female entrepreneurs who achieved phenomenal success in starting, growing and selling a 9-figure company in less than 10 years, Hilda is excited about businesses who will make a huge difference to the world and improve the planet, in the future. Hilda is an established authority on entrepreneurial businesses and is inspired by business strategies; the marketing and branding of businesses, individuals and products. She believes in the power of innovation and creation. Innovation does not always mean new inventions but finding new and creative ways for the existing is more important.

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