Festive splurging: How to avoid a Christmas spending hangover
Tis the season for giving! But can you really afford to be elaborate in your gift-giving this Christmas? With scores of sales already on at the moment, consumers may be tempted to spend their hard-earned cash on unnecessary or impulse purchases, whilst others will undoubtedly find themselves spiraling into debt - just to be able to give the perfect present. As spending tends to be compounded over the festive season, we have some tips - from the experts - on how to indulge in responsible spending this holiday, without experiencing the dreaded buyers remorse afterwards.
According to statistics, over 10 million credit-active South Africans are over-indebted.
Unfortunately, with the country firmly in festive season mode, many people will fall into a debt trap by succumbing to the urge of spending money they don’t really have.
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The National Credit Regulator (NCR) is appealing to consumers to be money wise and thrifty this Christmas, in a bid to get them entering the New Year without financial worries.
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Mpho Ramapala, Education and Communication manager at the NCR, says the festive season is aptly named the “silly season” - because of a spending frenzy that appears to afflict people over this period.
"History has shown us that bonuses present a great temptation to continue buying things that they didn’t plan for. We strongly encourage people to stop, do a budget and plan their spending very carefully, especially over this period with a note that January is just around the corner with its expenses,” she said.
Similarly, FNB's Preenay Sathu, says consumers need to be proactive about their saving habits, year-round.
“The end of the year should not be the only time to re-look finances, it must be an ongoing process. However, conducting a reassessment of your financial status over a 12-month period provides a clear picture of where you are and can help spot any gaps or mistakes that may need correcting. After this step it becomes easier to set new financial goals and targets over the coming year.
He adds that discipline in this process is paramount - as the most effective way to achieve results is being able to set goals and stick to them.
Newswatch has some additional tips to help you avoid the urge to splurge this festive season:
* Draw up a budget ahead of your shopping expeditions. This way you'll be able to determine what you can actually afford to spend on presents;
* Avoid buying items on credit. The interest accumulated on purchases can be staggering for repayments in the long-run;
* Don't be tempted to buy an item just because it's on sale. A good tip is to weigh the 'want' and 'need' option, before purchasing a gift;
* Avoid using your Christmas bonus on gifts alone. Instead, pay off debts, or save the bonus for a rainy day, or a much-needed holiday;
* Be thrifty. Gift-giving doesn't always have to involve something that's bought. Why not make your own Christmas gifts? It's a thoughtful gesture, which won't cost you an arm and a leg;
* If you're unsure of how much you're actually spending, download a budget or spending tracker app to help manage your expenses.