We’ve all been there… it’s mid-January, your bank account is empty after the holiday festivities, and you have no idea how you’ll make it to pay day. In a recent Sanlam survey, 54% of South Africans admitted they were not able to make their money stretch to the end of the month. With December pay cheques arriving earlier than usual for many employees and all the additional festive season expenses, it’s no wonder the first month of the year has been dubbed ‘JanuWorry’.
Farzana Botha, Segment Solutions Manager at Sanlam Savings, says its especially important for South Africans to budget this time of the year. “Your pay cheque needs to last for 6 weeks as opposed to the normal 4-5 weeks every other month, and will probably need to cover extras like presents, holiday entertainment and school supplies. To avoid creating debt that you will take with you into the new year, strict budgeting is essential,” explains Botha.
Sanlam’s survey also revealed that 50% of South Africans wish they had saved more prior to the pandemic, and 57% were financially negatively impacted by Covid-19. Botha explains that while we are all excited for the much-needed December break and keen to spoil our loved ones, we need to be cautious and prepared rather than to be caught unaware.
Here, Botha shares her top five tips to help South Africans approach the festive season responsibly:
Gift thoughtfully and get creative
A gift doesn’t need to be expensive to be meaningful. Try to create homemade gifts that show thought and care but don’t overextend you financially. Consider Secret Santa, where each person is allocated just one other family member to buy a present for.
Take staycations
If you have not been able to save for a holiday, make it a staycation rather than relying on your credit card to fund a getaway. Using credit will essentially mean starting the new year with increased debt. Instead, practice delayed gratification and save up for your dream family holiday in 2022.
Embrace the ‘bring and share’ culture
The ‘bring and share’ culture is a great way to socialise and make memories without breaking the bank. If each person does a little or brings something along, this can help ease the financial pressure to entertain during the festive period.
Shop sparingly and sell unwanted goods for extra cash
Don’t buy more than you need in terms of groceries and other consumables and make sure you maximise leftovers. Use grocery lists and budgets when shopping. Also consider selling unwanted items to create an additional cash flow.
Budget for your weeks and your weekends to include eating out and socials
If your December salary needs to last 6 weeks instead of the usual 4 to 5, split the disposable income budget mindfully across this time. Take care to include the things you want to enjoy but at a rate and pace that you can afford.
“The festive season will tempt many with short-term wants which often overshadow our important ongoing and long-term needs. We need to focus on the long-term reward which will outweigh instant gratification,” concludes Botha.
BUSINESS REPORT