#KEDEZEMBA: Going home doesn't have to break the bank
The holidays are just around the corner and going home to reconnect with family will be on the cards for many South Africans who have migrated to other provinces in search of opportunities. Stats SA shows that, just looking at the Eastern Cape, over 1.5 million people have left since 2006. Most look forward to having fun time, but the trips traditionally also come with expectations from family and friends of generosity in the form of gifts. The temptation to borrow money to avoid disappointing can be tricky to navigate.
Kenosi Magosha, Head: Client Solutions Savings at Sanlam Personal Finance, recommends planning to avoid pitfalls of going big on debt, “It’s not a good idea to use debt, whether a credit card or a personal loan, in order to pay for the trip home and the related festivities. Doing so can lead to a bit of discomfort later as by using debt you are borrowing from your future salary. You will have to take more out of your salary than you actually spent on the festivities because of the interest you will need to pay on the debt. You will be leaving less money available to grow your savings and wealth. A smart move would be to be innovative with less so that January can also be a stress-free month.”
Here, Magosha shares tips on how to avoid going into debt troubles when going home:
1. Plan ahead to avoid the debt trap. First start planning how much you can afford and then how you will get home i.e. self-drive, take a bus or fly. The option chosen can affect money left in the pocket for other things without needing to borrow money. For future trips, rather plan early and kick-off saving from February e.g. R300 each month would mean R3,000 by end November.
2. Set the expectation. Avoid the temptation to be too extravagant to impress people back home by spending more than you have. Try not to use the credit card as a lifeline to meet expectations.
3. Take advantage of shopping specials. Check with family and friends if you can club together to buy a list of festive goods and stick to it – e.g. Buying drinks, snacks, grocery items on Black Friday.
4. Take the new year into consideration. Parents, for example, need to plan to cover school fees and back-to-school needs before getting paid in January. Companies tend to pay December salaries early, which makes for a very long January, so one needs to factor this in and put money aside for January.
Magosha concludes, “Reconnecting with family and friends is important, and despite challenges there’s an opportunity to be smart with money, with a festive spending budget, while having fun and enjoying the holiday season. This will keep relations good in the festive season and give you breathing room for a less stressful January. Enjoy #KeDezember with money savviness.