JOHANNESBURG - “There appears to be no discouraging South Africa’s debt-addled populace, who remain enthusiastically committed to spending, largely thanks to the prevalence of store and credit cards, which allow consumers to rack up debts with relative ease,” says Nthabiseng Moloi, the head of marketing and brand at insurer MiWay.

The result of this overspending is typically a financially strained start to the year as December’s excesses become January’s problem, leaving you to play catch-up with your finances for the first few months of the year.

Think twice before you splurge. It’s vital that you take stock of exactly how much you have available to you and have a budget to accommodate your expenses, Moloi says.

Generosity and being financially savvy aren’t mutually exclusive, she says. You can reduce your spending by employing alternative gifting strategies, such as setting limits on how much family members spend on each other, or making gifts yourself.

Say no to credit, Moloi advises. In the run-up to Christmas, there are plenty of enticing credit and “no-deposit” deals that can tempt you into splashing out on expensive gifts you can’t really afford. But in the long run, credit leaves you with a higher price to pay and costs you more in interest repayments.

Bekithemba Mafulela, the business development manager at Allan Gray, says you need to be aware of retailers’ festive season spending cues. Being aware of subtle (and not-so-subtle) influences can help when everything around you is pushing you to spend.

Mafulela says that key retail periods, such as Black Friday and the festive season, are designed to make you spend more, through targeted deals and with tactics such as “mega savings”.

“With more of our spending happening online, retailers can personally target our desires with adverts for products we’ve shown an interest in. Adverts built on our personal profiles have more of a chance of loosening our wallets.”


He says that brick-and-mortar stores are designed to make you spend, with roadblocks and labyrinths along the aisles to nudge you to stop and buy.

John Manyike, Old Mutual’s head of financial education, says: “The biggest mistake many South Africans make is to treat December differently and believe that it’s just one month and so it’s okay to splurge and indulge without consequences.”

Manyike offers some valuable festive season do’s and don’ts:

• Do make out a shopping list and buy only the items on the list.

• Do give yourself enough time to shop around and compare prices.

• Do start buying stationery and school uniforms for the New Year in December, so that, come January, you have already made some of the key purchases.

• Do be very clear on the difference between needs and wants. For some people, the festive season is a licence to blur the lines, only to regret it later.

• Do track your purchases to make sure you keep to your plan.

• Do be creative. If you’re not going on holiday, plan affordable get-togethers with family and friends – from movie nights with popcorn and ice cream, to picnics and ball games in the park.

• Don’t spend money you don’t have.

• Don’t be tempted to reverse debit orders or skip payments. Having to pay double with added interest only creates extra pressure in January.

• Don’t increase your overdraft or credit card limit. In fact, try to use your card only in an emergency.

• Don’t take up store offers of a “January payment break”. These offers may result in your racking up interest on the outstanding debt, and they don’t prevent a financial hangover, only postpone it. Rather opt to pay your instalments as usual and work towards ridding yourself of debt.

- PERSONAL FINANCE ONLINE