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Cape Town - Although the festive season is over and the lavish meals that come with it have long been eaten, there is still time for debt-stressed consumers who over-indulged over the holiday period to get their finances in order.

This is strictly by not defaulting on debt obligations and using additional income such as their annual bonuses to save or pay off debt, say the financial experts.

Joanne Brown, principal consultant at Momentum Consult, a member of the JSE-listed MMI Holdings group, said it is time for consumers whose excesses surpassed what they had to assess their financials to get budgets back on track.

Brown said the first step should be to minimise spending.

“If it’s not an essential item, it is not needed.

Secondly, assess your current financial situation.

While it may be tempting to tap into retirement funds, this will inevitably have long-term negative repercussions.”

Brown said consumers should apply the 50/20/30 budget rule, allocating 50 percent of their income to essentials, 20 percent to lifestyle and discretionary expenses.

She said a high percentage of the discretionary budget could be used to settle debt.

“Contact creditors and set-up payment plans to settle the outstanding amounts.

“Once you have done this, craft a prevention plan for a similar situation next year.

“Create a budget, not an aspirational one, but rather a realistic one that reflects actual spending.

“Without a spending plan, you will be faced with the same challenges come January next year.”

Steven Nathan, chief executive for financial service provider 10X Investments said to achieve a “New Year, New Me” goal, consumers should first evaluate their finances and plan for the year ahead.

Read also: Grim debt stats for SA consumers

Nathan said this meant using money wisely and checking on whether they were getting any returns on investments.

“Apart from the more obvious areas, such as household and travel expenses, those planning for the year ahead need to sit down and evaluate any investments they may have, particularly their long-term savings.”

Nathan said it was possible to make the most of investments such as retirement savings.

He offered the following tips and insights into how to keep financial New Year’s resolutions:

* Save your annual salary increase. If it is above inflation, direct the difference to your retirement fund.

* Check out your annual retirement fund benefit statement, to see how much you’ve saved.

* Don’t check your fund balance every month, or your emotions may tempt you to do something foolish. The markets are choppy right now, so your fund credit will go up and down.

* Educate yourself. Learn about index investing, and why it is the way forward. Bottom line: this investment style will most likely give you a better long-term return than your fund manager.

* Don’t chase the past. There’s a reason why every fund manager warns that past performance does not guarantee future performance, because it doesn’t.

* Don’t get lost in the moment. Stay above short-term economic or political developments. In the context of a 40 or 60-year savings life, it’s all short-term stuff.

* Ditch the fortune tellers. The predictions of so-called experts may be more scientific than yours, but that does not make them any more reliable or lucrative.

* Be smart with your bonus. Use some of your bonus to pay down your bond or credit card debt and lower your monthly installments.

* Beware of brokers. You shouldn’t ever use a broker to buy a savings product. By using a broker for your investments, investors lose out on higher investment returns due to added fees.