FILE - In this Wednesday, Oct. 26, 2016, file photo, a shopper, left, walks with a store associate in the toy section at Walmart in Teterboro, N.J. As more shoppers shift online, Walmart hopes to make its stores more fun this holiday season. The chain will have parties for customers at its stores for the first time, increase the number of product demonstrations and expand the role of employees who last year helped people find the shortest register lines. Many retailers are trying to make stores more inviting even as they improve online services. (AP Photo/Julio Cortez, File)
JOHANNESBURG - It is that time of the year again, December is almost here, which means the countdown to the festive season has already began. People should start planning and thinking about their festive season expenses now.

According to Mellony Ramalho of African Bank, often we don’t plan properly for the festive season and end up overspending and having to take on unnecessary debt which can be crippling as the new year expenses start rolling in.

“If you are planning on going to see family and friends during December and want to take gifts, groceries and money, then now is the time to start saving or possibly buying and putting items away. Remember that prices generally increase a month or so before December in anticipation of the festive season buying frenzy,” she says.

Ms Ramalho suggests making a list of the items you will need to purchase and or the amount of money that needs to be put aside and create a three-month plan.

“There are various options in terms of purchasing items if you don’t have the cash on hand. Either you can save and buy in December knowing that while items may be slightly more expensive you won’t be paying interest on the items as would be the case if you have bought on credit. Alternatively, you could look into a lay-bye option, a hire-purchase option or buying on credit,” she says.

* A lay-bye: “Several retailers offer this option. The positives about this option are that no interest is charged on the items and you can purchase now knowing the items will be available when you want them. On the downside, you do generally need to put down a deposit, which, if you don’t have the cash, will be a stumbling block,” said Ramalho.

*An installment plan: This option is generally used for high-cost items such as electronic goods, furniture, and so on. The upside is you get to take the item home straight away. The downside is that you will be paying interest on the amount still owing and if you don’t pay an installment, the item will be repossessed.

*Buying on credit: Initiating credit with any registered financial entity entails interest, service and initiation fees added onto the required amount, which means you pay an increased price for the money that you borrowed when you finally pay that amount back.”

According to Ms Romalho when you apply for credit, it is important to ask for a quotation or a pre-agreement that shows the different fees and costs that will be added to your agreement.  Secondly, you need to make sure you deal with a reputable company that is registered and abides by the National Credit Regulations, so you know that you’re being treated fairly.

“The positives with this option is that you get to take the items home straight away and you have access to money to make the purchase. The downside is you end up paying more for the item than if you had paid cash for it.”

Whatever your plan is for the festive season expenses, the key is sticking to the plan. “Don’t be tempted to dip into your December savings or put your plans on hold to make other purchases. You will see the benefits when the festive season approaches and you are prepared. You can also start the New Year off debt- and worry-free,” she added.