Shoppers walk through fake snow on Oxford Street during a pre-Christmas shopping day in London at the weekend.

With only a few weeks left till the end-of-year bonus payouts, a number of consumers are drawing up long shopping lists before the money is even in their bank accounts.

As part of its mandate to educate and inform consumers, the National Credit Regulator is embarking on its annual Spend Wisely, Borrow Wisely campaign.

Overspending during the festive season is easy because of the year-end celebrations and excitement, but if you want to begin the New Year in a financially sound position, be aware of how you spend your money this festive season.

“December is no different from any other time of the year,” says Louisa Hetisani, manager of credit information and research at the National Credit Regulator.

“You do not have more money to spend other than your monthly salary.

“Your bonus (if you get one) should be used to pay off debts and other expenditures.”

According to the regulator’s statistics, consumers owe R1.36 trillion on mortgages, vehicle finance, credit cards, store cards, personal loans, short-term loans and pension and insurance-backed loans.

Statistics also reveal that there are 19.6 million credit- active consumers.

Credit-active consumers are those who are obligated to pay credit providers and/or service providers.

These obligations result in transactional entries on the consumer’s credit record at credit bureaus.

Out of the 19.6 million credit-active consumers, 53 percent are in good standing and 47 percent have impaired records.

“Do not become a statistic this festive season and add to the 47 percent; spend your money wisely and save for the New Year,” advises Hetisani.

“The key is not to go overboard on your purchases.

“Often debt accumulates with smaller purchases where each one doesn’t appear to amount to much.

“However, when they are all added together they make a huge dent in one’s finances.”

Another reason to spend wisely during the festive season was the fact that most people would be paid again only by the end of January.


Avoid becoming a bad credit statistic

To ensure you are not put in the predicament of having to apply for credit come the new tear, spend wisely this year by following these simple steps:

* Draw up a budget for the festive season and include all debt, rent, electricity, water, insurance, transport, gifts and entertainment.

* If you did not budget for a holiday earlier in the year, it might be too late and risky in terms of finances to go on holiday this year.

* Be proactive and double up on your regular payments such as mortgage or rent, lights and water. That way you will be able to afford costs such as school fees and school uniforms for the new year.

* Prioritise your home loan and rent.

* Avoid unnecessary credit and the “buy now, pay after three months” adverts.

* If you do borrow money, make sure you do so only for what is strictly necessary, and ensure you can afford the repayments.

* Make it a family project to make presents for friends and relatives. These cost much less than buying something in the shops, and will mean more to the recipients.

* Limit yourself to an amount for each person’s gift to help keep track of your spending.

* Choose gifts that last long after Christmas.

* Instead of buying expensive gifts, set up a savings fund and put away an amount for your loved ones each Christmas. Over time this will grow into a much bigger pot of money that can be used to fund school fees or pay off a vehicle.

* Entertain at home. Ask guests to bring something for the meal so you share the costs of your festive entertainment.

* Each year, set up a separate fund for birthday and Christmas presents as well as holidays. Keeping this money separate will enable you to save for special occasions, while at the same time fund your day-to-day living expenses without going into debt.

* Use your bonus to reduce your debt burden by paying off existing loans.

* Keep track of your spending by jotting down or keeping the receipts of all your spending.

* Get a free copy of your credit bureau record from any of the 11 registered credit bureaus. Contact the National Credit Regulator for further information on 0860 627 627. – Sapa