By Aubrey Faba, Provincial Head at Momentum Financial Planning
The official unemployment rate rose to 33.6% in the second quarter of 2026, leaving nearly 8.5 million people actively seeking work, according to Statistics South Africa’s latest Quarterly Labour Force Survey. In an economy struggling to grow, job security is not guaranteed.
A retrenchment, business closure, or sudden job loss can quickly reduce a dual-income household to just one. Moving from two incomes to one is a big financial shock. However, with deliberate planning, structured stress-testing, and proactive advice, it is possible for families to insulate themselves against sudden income disruptions before a crisis occurs.
Assessing your household’s baseline expenses
The first step in building household resilience is understanding your baseline cost of living. Dual-income households often slide into lifestyle creep, blending non-essential lifestyle choices with core survival costs.
To determine whether a household could maintain essential obligations on a single income, expenses should be divided into two distinct categories: Fixed essential expenses are non-negotiable costs such as bond repayments or rent, municipal rates, basic groceries, school fees, transport, medical scheme contributions, and core risk insurances. Discretionary spending includes flexible expenses such as dining out, entertainment, subscriptions, luxury food items, premium clothing accounts, gifts, and travel.
Calculate your fixed baseline expenses and then evaluate whether a single remaining salary can cover your household’s core obligation. If the remaining salary is not sufficient, quantify the exact monthly shortfall that an emergency fund would need to bridge.
Stress-testing your finances before a crisis
Rather than waiting for a job loss to occur, consider conducting a mid-year financial stress test. This exercise involves modelling a scenario in which either income disappears overnight.
Stress-testing allows you to answer practical questions in advance such as which subscriptions or secondary expenses can be cancelled immediately without penalty; how many months could your current liquid savings cover the core monthly shortfall; and whether your credit facilities are safely structured, or if you are vulnerable to high-interest debt traps if income drops?
Proactively identifying vulnerabilities provides the clarity required to put contingency plans in place while your financial standing remains strong.
Your emergency fund is your first line of defence
When household income becomes volatile, a well-structured emergency fund serves as a financial buffer. While the standard rule of thumb recommends three to six months’ worth of living expenses, dual-income households facing sector-specific retrenchment risks may need to target six to nine months of baseline expenses.
Having accessible cash reserves prevents families from making distressed decisions during job transitions such as liquidating long-term retirement investments, incurring short-term high-interest debt, or withdrawing from pension funds prematurely.
Align your risk cover and income protection
When a household shifts to relying on a single income, that remaining income becomes the primary asset protecting the entire family’s financial stability. Review your risk protection structures to ensure that the primary earner has comprehensive income protection cover that guards against temporary or permanent disability and severe illness.
Certain risk policies offer limited retrenchment cover or premium waiver options, ensuring life and medical policies don’t lapse during periods of unemployment.
Group life cover provided by an employer ends upon retrenchment. Evaluate whether you need to be putting individual cover in place to ensure seamless protection regardless of your employment status.
Short-term cost-cutting vs long-term planning
When an income shock strikes, the immediate impulse is often to cut costs indiscriminately. While slashing discretionary spending is a good idea, cutting the wrong financial commitments can cause lasting damage to a family’s financial future.
For example, pausing medical scheme contributions or cancelling long-term risk insurance to free up immediate cash flow exposes the household to catastrophic financial liability in the event of an accident or illness. Similarly, pausing retirement contributions indefinitely sacrifices the power of compound growth. A clear financial plan distinguishes between short-term cash-flow adjustments and long-term wealth preservation.
The role of proactive financial advice
Managing a major change in household circumstances requires looking beyond immediate budgeting. This is where an experienced financial adviser plays an important role.
An adviser provides an objective, holistic view of the family’s total balance sheet, connecting cash flow management and short-term debt consolidation to long-term retirement planning, insurance, and emergency funding. Having an adviser who understands your baseline financial position ensures that contingency plans are established early, allowing you to make informed, deliberate decisions rather than emotional, crisis-driven ones.
As households face an increasingly complex economic environment, the demand for accessible, high-quality advice continues to grow. This need drives our ongoing commitment to recruiting and supporting skilled financial advisers who can help families navigate change, protect their momentum, and build resilient financial futures.
