Johannesburg - The festive season is here and most of us are counting the days until the holidays. For most South Africans, December is a time for family and fun in the sun – but it is also typically a time when spending is at an all-time high.
“With the year drawing to a close, we cannot ignore the fact that a new year also awaits and you don’t want to start it on a financial back foot,” says Rory Judd, head of online marketing at MiWay.
The National Credit Regulator is urging consumers to be vigilant when entering into credit agreements, says Mpho Ramapala, acting manager of the regulator’s education and communications department.
Credit providers should disclose all costs in advertisements if they refer to monthly instalments, repayment amounts or any cost of credit, she says.
“Consumers should be wary of misleading terms in advertisements and direct solicitation for credit, such as ‘no credit checks required’, ‘blacklisted consumers welcome’, ‘free credit’, ‘cheap credit’, ‘affordable credit’, ‘low cost credit’ or any wording that has substantially the same meaning.”
And because of the year-end hype and excitement, the festive season provides the perfect opportunity to spend money that you do not have.
“If you want to begin the new year in a financially sound position, be aware of how you spend your money during this period, and save for the new year,” Ramapala advises.
How to be savvy with your money this festive season:
Budget
Make sure you understand how much money you have available to spend this festive season. Make a list of all your expected expenses – such as food, accommodation, entertainment, gifts and extra petrol. If there’s a shortfall, accept that you’ll need to scale back.
Don’t cheat by including how much you expect to get from a 13th cheque or annual bonus. If you are fortunate enough to get a bonus, don’t blow the cash, but rather use it to pay off loans, make an investment or save some for a rainy day. Don’t forget about your debt and debit orders.
Track your spending
Your budget is of little use if you don’t effectively track your spending.
Nowadays, with cellphone and internet banking, it’s easier to keep tabs on where your money is going. You can even download an app to help you stay on track.
Spreadsheets are also an excellent and accurate way to maintain control of holiday expenditure. Just be sure to be diligent.
When going shopping, use a shopping list to avoid buying unnecessary items.
Say no to credit
One of the biggest financial traps over the festive season is the excessive use of credit. This implies that consumers look to finance their festive season through debt, especially when it comes to buying gifts. If you have to borrow money, make sure you borrow only for what is strictly necessary, and ensure that you can afford the repayments.
Gifts
There is no way around it: for most of us, the festive season is all about giving. However, this doesn’t mean that you can’t be financially savvy about being generous.
Avoid wasting money by making sure the gifts your loved ones want (or what you choose for them) are within budget.
Giving gift vouchers is also a great way of sticking to your budget; alternatively, for the ultimate act of giving, consider donating to a good cause on behalf of your loved one.
Food
Saving on your grocery bill takes a bit of planning. Buy essentials such as sugar, flour and oil in advance (you can also buy it in bulk) and save it for later. Keep an eye out for specials at the supermarket and stock up in advance.
If you’re going on holiday, plan your meals and take inexpensive, non-perishable and frozen items along with you where possible. Entertain at home. Ask guests to bring something for the meal so you share the costs of your festive entertainment.
Car trouble will wreck your budget. Prevention is better than cure and comes with the added benefit of boosting safety, so service your car before going on holiday.
Also, given the high road accident rate in the country during this time, make sure that insurance premiums are paid.
Saving for January
There’s nothing wrong with enjoying yourself during December, but remember that January awaits. Don’t forget there are household accounts like water and lights, the bond, the car, groceries, fuel, and other expenses that have to be paid at month end. – Information supplied by MiWay and the NCR.
Saturday Star