Dealing with finances this festive season

They say: “The rich rule over the poor, and the borrower is a slave to the lender”. Do not be a slave to debt, if you haven’t got it, you cannot spend it.

The festive season is approaching , it comes with the thought of how are we going to fund it, what are we going to spend on ,what activities are we going to do and which places are we going to visit . It is an exciting season and yet expensive time. Without proper financial planning, you may find yourself in a less cheerful position in January 2017, a debt trap that will give your health huge problems.

Good financial planning will help you to enjoy not only the festive season but the New Year too. How exciting will it be to know that all your finances are in track after the festive season than having to deal with debt collectors and unending phone calls from creditors? Here are a few pointers:

Budgeting

The first thing you may want to do is to be honest about how much your net income is. Not what you expect to get, not your expected 13th cheque or bonus, but your actual monthly net income. Then you draw up a list of expected expenses like accommodation, electricity, petrol, food, school fees etc. Drawing up a budget will help you manage your finances successfully and stick to what you have without having to borrow.

Gifts

We all like the feeling that we get when we splash money and gifts on our kids and our parents. But once the festive fever has died down, we will be left with a high price to pay. If you have not already set aside a budget for gifts, do not be tempted by enticing store adverts “shop till you drop”, you will literally drop dead from stress if you fail to pay back credit and store card debt. Do not rely on credit cards to buy gifts, its money that you have not earned and will be expensive for you to repay. If you have not saved up for gifts, the gift giving will have to pass for this year. Do not succumb to pressure from your kids or your family members to buy gifts you cannot afford.

Holidays

Festive holidays are planned way before the season approaches. If you are traveling to a holiday destination it’s wiser and cheaper to make bookings in advance. Holiday destination prices tend to spike during the festive season. Consider self-catering where you can cut down on food costs, self-catering is much cheaper than hotels. Plan for all the paid activities that you are going to participate in and budget for them. If you have not already saved up for a holiday trip then rather stay at home, never borrow to spend on a holiday.

Save for Emergencies

Most GP’s will be closed during the festive season and if you need medical care or need to use an emergency room it’s usually paid out of pocket. Due to increased traveling you may experience an unexpected tyre puncture or a car breakdown, save for unexpected emergencies like these and more.

Save for January

If you can, prepay for stuff like electricity, food, uniforms, stationery etc. January is an expensive month considering you received your pay check around the 15th of December for most people and your next pay check is on the 31st of January, that’s like a month and a half with no income. Set aside money for grocery, petrol, etc. Supermarkets will be offering reduced prices for most grocery items, shop around for cheaper deals.

Bonus

If you do receive a bonus or 13^th cheque, pay off credit card and store card debt because these generally tend to have very high interest rates. If you have children, buy uniforms and stationery and also pay school fees in December. The festive season is only but a few days, rather take care of the most important things than suffer from self-inflicted stress or “January disease” as we all know it.

Shopping

Shop around for items on sale. Clothes are usually cheaper after the festive season. There will be many 50% off sales and “Buy one get one free” so if you do need to buy clothes then that will be the time.

Last but not least, make sure that you pay your debt in December. As much as it is a festive season, creditors do not offer payment holidays just because it’s festive season. Creditors do not take lightly to non-payments during this season, it’s not that you don’t have the money, it’s because your priorities are misplaced.

If you already have a problem with debt, do not wait until the festive season is over, then it may already be too late, deal with it now. Seek the services of a debt counsellor who will help you draw up a budget, negotiate for reduced instalments and reduced interest rates with your creditors for all your debt.

Enjoy the festive seasons and remember to spend wisely.