For many South Africans, December is the most wonderful time of the year. Unfortunately, it can also come with a few pitfalls. According to a recent report, last year South Africans, on average, spent R5 673 more than their usual expenses and this year it is predicted that our festive season spending will go up by 20%. While borrowing a little money to get you through the silly season may seem like a good idea, it can often have unforeseen consequences.
Head of Sanlam Business Development for Retail Credit, Ayanda Ndimande, says: “Credit might seem like a nice ‘pay now and worry later’ nice option – but it can come back and bite you. You should be aware that interest rates are high, and fees will be added. What you think you are paying is not the true price of the item in the long run. For example, dipping into your store account for R3 000 worth of holiday outfits and paying this off over 12 months could cost as much as 39% more! It’s always the better option to try to spend within your means.
“You also have your credit record to consider. Failure to pay debts on time impacts your credit score, which in turn, curtails your ability to apply for ‘good credit’ down-the-line. Keep your record squeaky clean by ditching unnecessary debt when you can.”
Money issues don’t just affect your bank balance. Finances are the driving force behind 55% of divorces and can have a major impact on mental health. Often using credit to fund December activities only leaves one with a problem during the long month of January. Being financially responsible during the most tempting month of the year doesn’t mean you have to sit at home and be bored. Here are a few tips that can help you save money and still enjoy the festive season:
Agree upfront who you’re buying gifts for this year
Why not chat with your extended family and decide not to do gifts this year? Or play ‘Secret Santa’, where each person is allocated one family member to get a gift for, anonymously.
Do DIY gifts
It’s cute, especially if you involve the kids. Gogo is bound to be delighted with her macaroni frame. And aunties and uncles are sure to be thrilled with homemade cookies, decorated by small paws. DIY your decorations as well.
Stick to a bring-and-share
You don’t have to bankroll the whole braai. Try a potluck bring-and-share celebration instead.
Get out the envelopes
Tried and tested. Allocate an amount to gifts, entertainment, food, and anonymous, extra expenses. Withdraw the amount for each category upfront. Stick the money in an envelope and put your card(s) away. Once the money in the envelope is gone, your budget is done; don’t allow yourself to draw more.
Put aside money for the big January expenses
As soon as your December salaries come in, put aside funds for school fees, rent, and other big expenses.
DIY December date nights
Do a December challenge, where you take turns to plan at-home date nights, on a set budget. Compete to see who can come up with the sweetest evening in.
Champagne lifestyle on a shoestring budget
Social media makes it tempting to live your best, bubbliest life in ‘Dezemba’. Consider switching off from the ‘socials’ to give yourself a break and avoid that ‘Keeping up with the Khumalos’ feeling. Focus on family time instead.
Ndimande concludes: “Budget for the holiday and stick to it. Be responsible and mindful that pay day is often a long month away. If you need to swipe, only use one card, and stay within affordable limits. The festive season needn’t be about being more extravagant than your means. Take joy from the simple things and the fact that when January rolls around, you’ll still be feeling financially fit.”