“The implication for the credit industry is a possible trend for consumers to take out credit that supports the above spending habits‚ which includes opening retail accounts‚ cell phone accounts‚ etc.
“It’s the silly season‚ and consumers are driven by retail advertising and the social pressures the festive season. And while spending is good for the economy; the possible festive season-related irresponsible borrowing can affect economic elements such as inflation and cost of living‚” the analysis stated.
PPS Financial Planning’s Nico Coetzee said it came as no surprise that many South Africans tend to overspend during the festive season‚ failing to remember that there is still a full month of expenses in January.
“During this time‚ people are more relaxed and are trying to have fun‚ so they naturally neglect to plan properly and end up spending money carelessly.
Coetzee said sticking to a realistic budget would prevent overspending and added debt.
“The stress of sticking to a budget is actually less than the stress of overspending. By planning you will find that sticking to a budget isn’t a chore‚ but simply a natural outflow of your planning.”
Here are some key tips to help you budget better during the festive season: - Make a list of the key expenses you foresee during this period. - Find a balance between your goals for the holidays and your finances. - Don’t deviate from your regular financial plan. - Budget for emergencies and unexpected adventures. - Open a separate savings account and keep credit and cheque cards “hidden”. - Do not compare your holiday plans with another family’s. Plan your holiday according to what you can afford and don’t compete with others.
