This year has been filled with steep increases in living expenses due to the tough economic climate. So what can you do to make sure that you keep within your budget in December?
As a starting point, you need to think twice about how you are going to spend your hard-earned money during the holiday season.
Most people tend to get carried away over the festive season by going overboard without a proper plan set in place. Be careful not to fall in the over-indebted trap during the December holidays because it will probably have damaging consequences come January.
The average South African household spends 50% (Stats SA) of their budget on food and non-alcoholic beverages. So there is not much (or in many cases, any) money left for entertainment and gifts – especially when you add other living expenses to the mix. However, there are ways to ensure that you cover all your monthly expenses and still have some cash to spare to make your holiday special.
Five tips to avoid overspending this holiday season:
- Set a budget – Keep track of your money so that you know exactly how much you have available to spend.
- Manage expectations – When you have set up your budget plan, explain to your family how you allocated money for expenses and gifts during the holidays. This will help you and them avoid disappointment.
- Start early – It is still not too late to purchase gifts or book a holiday – prices will skyrocket when the schools close for the year. Remember, the festive season is always followed by clearance sales. So if you need to buy something, rather look for a good deal then.
- Swear off credit cards – Do not buy something if you cannot afford it in cash.
Lastly, make good use of your year-end bonus. Instead of spending your bonus over the holidays, use a percentage of that to settle small debts which will improve your cash flow. Save some of it to see you through the long month of ‘Janu-Worry’.
Adapted from Debt Safe.