The festive season is short, you need to be cautious not to overspend during this period.
During the festive season, most people look forward to taking a break from everyday responsibilities and recharge their batteries.
The holiday season is also a time when people spend more because of all the gift giving that happens at the end of the year.
If Black Friday was anything to go by then the spending patterns of most South African’s will continue to increase.
The top categories during the Black Friday sales were groceries, clothing, transport and entertainment, these could continue as the top three over the coming weeks.
The festive season is short, you need to be cautious not to overspend during this period. Here are some tips to manage your money:
Make a list of gifts and groceries
The first step is to make a list of everyone you need to give a present to and the number and size of family gatherings. Then track your purchases against these lists.
Set a budget
Once you have your lists, decide how much you can spend on each category like gifts, groceries and entertainment. This is your budget, and it must be realistic. It should be an amount you can afford. Try not to use credit to cover your festive season costs. Ideally this money should come from savings, a bonus or 13th cheque.
Try to do some shopping online, this will reduce the amount you will spend on browsing items you don’t need. Shop early in the month, do not leave it to the last minute. This will help avoid the pressure of last-minute buying and increased spending.
Making gifts is a great way of saving money while entertaining the kids. There are all sorts of ways to make gifts, like baking biscuits, making preserves or other keep sakes for family and friends.
Use credit cards carefully
Credit cards can be useful tools but use them carefully and stick to your budget. At the end of each month make sure you can clear the outstanding balance in full and not just the minimum amount due, this way, you avoid the cost of interest.
Use loyalty programmes
This is a good time to use your saved up loyalty cash or rewards. For example, if you have saved your eBucks during the year or have some available, use them to buy presents or fuel if you’re going to travel.
Using extra money
If you do get a windfall such as a bonus, be responsible with this money. Rule of thumb is an 80/20 principle – 80 percent of the money to pay off debt or save for an emergency or cover January expense such as school fees. Then spoil yourself with 20 percent of the money or use that for the festive season.
Avoid the long Janu-Worry
If you are paid earlier in the month, avoid the temptation of spending this money during the month of December. A good tip is to move the money into a quick access savings account, then “pay yourself” on your normal salary date.
Remember that several financial institutions will process debit orders earlier in the month, so make provision for this as well.