Stay clear of a festive hangover

With only a few weeks left till the end-of-year bonus payouts, a number of consumers are drawing up long shopping lists before the money is even in their bank accounts.

As part of its mandate to educate and inform consumers, the National Credit Regulator is embarking on its annual Spend Wisely, Borrow Wisely campaign.

Shoppers walk through fake snow on Oxford Street during a pre-Christmas shopping day in London at the weekend. Credit: Reuters

Overspending during the festive season is easy because of the year-end celebrations and excitement, but if you want to begin the New Year in a financially sound position, be aware of how you spend your money this festive season.

“December is no different from any other time of the year,” says Louisa Hetisani, manager of credit information and research at the National Credit Regulator.

“You do not have more money to spend other than your monthly salary.

“Your bonus (if you get one) should be used to pay off debts and other expenditures.”

According to the regulator’s statistics, consumers owe R1.36 trillion on mortgages, vehicle finance, credit cards, store cards, personal loans, short-term loans and pension and insurance-backed loans.

Statistics also reveal that there are 19.6 million credit- active consumers.

Credit-active consumers are those who are obligated to pay credit providers and/or service providers.

These obligations result in transactional entries on the consumer’s credit record at credit bureaus.

Out of the 19.6 million credit-active consumers, 53 percent are in good standing and 47 percent have impaired records.

“Do not become a statistic this festive season and add to the 47 percent; spend your money wisely and save for the New Year,” advises Hetisani.

“The key is not to go overboard on your purchases.

“Often debt accumulates with smaller purchases where each one doesn’t appear to amount to much.

“However, when they are all added together they make a huge dent in one’s finances.”

Another reason to spend wisely during the festive season was the fact that most people would be paid again only by the end of January.

Avoid becoming a bad credit statistic

To ensure you are not put in the predicament of having to apply for credit come the new tear, spend wisely this year by following these simple steps: