That extra cash is not just for celebrating
Even though this year has been marked by the global Covid-19 pandemic, some of us are still expecting a cash injection in the form of a financial windfall, like a 13th cheque, a bonus or even a stokvel payout.
With this in mind, having some responsible fun and enjoying some time off sounds like something you surely deserve. But excessive, unplanned spending is not a good strategy to take with you into the holidays.
Lindi Monyae, Executive for Liberty Emerging Consumer Markets say's "Don't spend all your hard-earned money on celebrations, no matter how tempting the spending seems to be. You've worked hard for your money especially this year, so it's wise to put a chunk of it away for the future to make sure you can maintain your lifestyle".
She has three suggestions for those with a bit of extra money:
Settling your debts
Paying off debt costs your money every month. Many of us found ourselves with extra debt because of financial challenges caused by the COVID-19 pandemic. Now that you have extra funds, it is wise to use the money to pay off your debt. The quicker you can make it disappear, the happier you will become. Extra payments, no matter how small, will make a difference in the long run. You will thank yourself for doing this one day.
Invest some of the money
Consider putting some of your extra income into a retirement annuity or a suitable investment vehicle. Speaking to your financial adviser will help you make well-informed decisions.
Make next year count now
Plan a budget for yourself for the upcoming year and see what your major expenses will be. Do you have school fees to pay? Does your car need a service? Maybe you need to buy new furniture for your house? Put some money aside for these things, so when the time comes you can cover these expenses without too much hassle.
The message here is to keep focused on your financial goals. Any extra money you may have coming in should not just be spent on festive season activities. Rather see how it can benefit you in the broader scheme of things.
"This past year was tough for everyone. As we look forward to a brand-new year, we need to think about how we want to deal with our finances and how we can future proof ourselves against any unforeseen challenges, like what has happened with COVID-19 for example. It is a great time to think about our financial goals and new possibilities in making these goals happen. Planning and getting advice are therefore crucial. It does pay off in the long-term" Monyae says.