Halfway through savings month and in the second half of 2020. What will you do differently?

Some of us started 2020 with grand plans of saving and investing. Either you wanted to start putting money away regularly or you wanted to put more money away than you usually do.

The lockdown has impacted all our lives and we have had to adjust to this "new normal". Some of the plans you have made to get your finances in order have been delayed. With all the negativity around the country at the moment (job loses and increased infection rate), I want to focus on the positives.

The lockdown has been an opportunity for some people to pay off debt. I'm a firm believer that saving or investing while you have debt (bad debt) is a futile exercise that will leave you in a worse off position than when you started. I have written a post about this before which you can read here.

The restricted movement, which has lead to most people staying in and not eating out or travelling to work has resulted in having extra funds at the end of each month. These funds can be used to reduce any of the debt you currently have or pay your future self by investing or saving.

The change in repo rate has also made debt repayments cheaper. If you can pay the same installment amount you paid before the repo rate change you should continue doing so. Those extra payments will help reduce the outstanding capital amount. The repo rate change also means that your savings account is earning less interest. This is an opportunity to look for other types of investments that yield good returns and suit your risk profile.

The best investment or saving you can make is by reducing or paying off your debt in these times of uncertainty, your future self will thank you.

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