Cape Town - There is no doubt that consumers spend a lot more during the festive season than they would normally do during the year, on gifts, food, entertainment, travel, events, and spoiling loved ones.
National Credit Regulator (NCR) Manager of Education and Communication, Poppy Kweyama, said while consumers had ample time to plan for the festivities, many did not, and in the end succumbed to the temptation of overspending, using credit cards, bank overdrafts or taking loans to fund festive spending.
“With the ever-increasing cost of living, including increased interest rates, consumers need to be financially savvy and make tough but necessary decisions to scale down on festive spending this year.
“Sometimes it is worth waiting rather than impulsively using credit to buy non-essential items which would only bring misery. In making festive purchases, consumers should always distinguish between needs and wants. Otherwise, you will begin the New Year with more debt than you intended and end up being saddled with regrets. Make the most of your money,” Kweyama advised.
If you happen to be one of the lucky ones and receive year-end bonuses and/or 13th cheques, Kweyama said: “Always remember the golden rule: pay off your debt first! Although it is a bit difficult to define how consumers should spend their year-end bonuses and 13th cheques, if used wisely, it could be just the ticket to start your new year debt free.”
The NCR shared these practical tips on how to minimize spending during festive season:
– Plan and save for festive season ahead of time;
– Pay off existing debt first;
– Don’t spend money on a “soft” lavish lifestyle to impress others;
– Do not replace presence with presents;
– Create a festive season budget which is aligned to available funds and stick to it;
– Compare prices between different retail stores;
– Don’t use credit for consumables like food, alcohol and airtime;
– Beware of scams if you decide to shop online;
– Save money for January expenses; and
– Live within your means during the festive season.
Cape Times