Buying spree can lead to credit traps
As the December holidays draw to a close, most consumers, especially women, find themselves spending more money on food and other essentials than they should.
And budget is often ignored during this period as consumers feel this is the only time they can afford to indulge.
Lindi Mukhuba, Absa regional manager for Retail Banking, warns against this habit.
She says bad budgeting or lack of it has been identified as one of the reasons many people fail to manage their finances.
"Financial literacy plays a crucial part in the financial decisions made by most consumers in the current South African economy. Poor budgeting can lead to credit traps and for consumers to start working wisely with their money, it is important that they plan carefully before they embark on a shopping spree," says Mukhuba.
Mukhuba discourages consumers from buying food and clothes on accounts.
"Buying these on account can often lead to a large amount of credit that becomes unmanageable," says Mukhuba.
How to spend your money wisely
ensures you really need the product you are intending to buy.
"It is easy to confuse a real need with desire. If you do not have immediate funds to purchase an item, ask yourself if you can live without it or buy the product at a later stage. Always be aware that there is a difference between a need and a want," says Mukhuba.
Always have a list of items that you budget for on a monthly basis and buy what you have written down on the list. You need to come up with ways of changing your lifestyle so that you can control your spending.