Consumers urged to plan wisely to avoid January blues

The festive season has left some people with a dent in their pockets, experts have urged consumers to tighten their belts.

The festive season has left some people with a dent in their pockets, experts have urged consumers to tighten their belts.

Published Jan 5, 2024

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As the festive season has left some people with a dent in their pockets, experts have urged consumers to tighten their belts to avoid the January blues.

Neil Roets, CEO of Debt Rescue, said consumers should prioritise and review their spending in January.

“This will help to prevent a situation of ‘Januworry’ with all its financial challenges. First, set up a budget and look for opportunities for living expenses to be revised.

“This can include forgotten debit orders for services no longer used or needed.”

Roets added that consumers need to review habits that might have gone unnoticed, such as eating out.

“Next, tackle debts to avoid extra interest charges and costs. Planning your finances is of utmost importance, now more than ever, with the financial difficulties consumers are facing due to high inflation and high interest rates.”

Roets said that it was crucial for parents to plan for back-to-school expenses.

“It is also important to look for opportunities where you can save money. Look for second-hand items or shop during sales. Explore community swop meets or online forums where parents exchange uniforms. Check for school-sponsored assistance programmes or discounts.

“Buy in bulk with other parents to save on stationery.”

Professor Irrshad Kaseeram, from the University of Zululand’s Economics Department, said that interest rates were expected to be unchanged for the next six months and debt service charges would remain high.

“I would recommend trying not to take on additional loans or hire-purchase debt if there is no matching surplus income/cash flow.

“Households should not engage in impulse buying.”

Kaseeram added that consumers should at least try to hold off buying on credit until interest rates come down.

“Consumers should hold off on home improvement and durable goods (furniture etc) until the second half of the year when borrowing rates are expected to fall.

“Avoid micro lenders because of their high lending rates.”

Kaseeram added that for big purchases, consumers should look into community saving schemes (stokvels, lottery) instead of taking on debt.

“I also advise consumers to use windfall gain to settle debt and to go for debt counselling or debt administration if you are overwhelmed.”

Johann Els, Old Mutual Group chief economist, said that consumers had to plan carefully as what they do in January could impact their finances for the rest of their year.

“I would advise consumers to cut back on luxuries etc, but do not take on new debt.

“I do expect there to be lower fuel prices throughout 2024 and interest rates to come down later in the year.

This will bring relief but it is important to use the money wisely.”

The Mercury