The festive season is on us so don't be silly, spend wisely.

The festive season is on us so don't be silly, spend wisely.

Considering the challenging economic conditions for South Africans and people the world over, consumers would do well to spend their money wisely and avoid falling into the debt trap.

Christmas is an expensive time, so don't go overboard on gifts and entertainment.

Peter Setou, senior manager: education and strategy at the National Credit Regulator (NCR), says this will help you to save for 2009.

"In January the yearly cycle starts again and there will be demands on our income," Setou says. "We face undue financial stress if we have been unwise in the way we spent our money."

He says the "silly season" is aptly so named because of the spending frenzy that afflicts people during this period.

Setou says debt often results from an accumulation of many small purchases.

Each does not appear to amount to much, but when they are all added up they can make a very big dent in one's budget.

"Consumers tend to forget that they must still provide for the usual expenses such as rent, school fees, clothing, food and transport and want to spend most of their available cash on items they don't really need and cannot actually afford," Setou says.

How can one avoid falling into the debt trap this festive season?

lPlan your budget - know exactly how much you have available and what expenses must be covered."

lPay current debts before incurring additional expenditure.

l Be wary of "buy now, no deposit needed deals, which will finally cost you more.

lIf you do decide to borrow money make sure you borrow only for what is strictly necessary and ensure that you can afford the repayments.

lIf you are in in debt and experiencing problems repaying your debts, you must contact your creditors and discuss your situation.

lAvoid getting more debt. Rather downgrade and change your lifestyle.

If you drive an expensive car consider a less expensive one since it will reduce your monthly instalment, enabling you to pay other debts. Also consider using public transport.

lLook twice for a better price. When you do your groceries compare prices across major stores and settle for less.

lTry not to be tempted by the flood of advertisements in newspapers, radio and on television, including letters offering credit.

lDon't spend money you don't have - this means do not live beyond your means.

lThe Christmas season brings out the giving nature in us all. Be careful to give only what you can afford.

lSpend wisely now and enjoy a financially relaxed and peaceful new year.