THE HOL­I­DAYS

Christ­mas – with its fam­ily com­mit­ments, par­ties and gifts – is a bud­get­ing night­mare. Maya Fisher-French gets tips from our #MoneyMakeover ad­vis­ers

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Our con­tes­tants are all fired up about turn­ing their fi­nances around, but first they have to get through the fes­tive sea­son. In South Africa, we see a surge in loans in the mid­dle of Jan­uary be­cause De­cem­ber’s pay cheque has run out. So what tips do our Mo­men­tum fi­nan­cial ad­vis­ers have on how to stay clear of debt and max­imise any bonuses or 13th cheques? Create a hol­i­day bud­get

All the can­di­dates wrote up bud­gets to un­der­stand the ex­tra costs they will be in­cur­ring this hol­i­day. As most of them have al­ready found ex­tra money due to fi­nan­cial dis­ci­pline over the past two months, they have re­alised that their fes­tive sea­son ex­penses – of­ten in­volv­ing un­nec­es­sary spend­ing – can be paid for from their in­come with­out draw­ing down on sav­ings or tak­ing on debt.

They would rather fo­cus on reach­ing their fi­nan­cial goals than go­ing big this year, and most have de­cided that there is no money in the bud­get for gifts, and they would rather fo­cus on travel and en­ter­tain­ment.

Tumelo’s bud­get fac­tored in higher fuel costs be­cause she will be trav­el­ling long dis­tances to visit fam­ily.

“She is keep­ing her spend­ing as low as pos­si­ble so that she can con­tinue to re­duce her credit card debt,” says fi­nan­cial ad­viser Mduduzi Mpusula.

Charles has de­cided not to travel back to his fam­ily home this year, but has made pro­vi­sion for en­ter­tain­ment.

“They plan to host their friends for a braai lunch and funds are al­ready pro­vi­sioned for, which will use Charles’ trans­port money. From the R1 400 monthly petrol bill, go­ing to work in the first week of De­cem­ber will cost him R350 and so the sur­plus of R1 050 will be used for lunch,” says fi­nan­cial ad­viser Kho­motjo Ramoloto.

Dipolelo has a fairly large fes­tive sea­son bud­get, which in­cludes trans­port, gifts and fam­ily en­ter­tain­ment. He plans to spend R600 on a bi­cy­cle for his son and he will have to spend an ad­di­tional R600 for his sis­ters to travel to spend the hol­i­days with him and his fam­ily. On De­cem­ber 26, he has planned a fam­ily trip to Pre­to­ria Zoo with his sis­ters and fam­ily, which will cost him R800. He’ll also spend R1 000 on fam­ily braais.

“Since his sis­ters will be with him, I would like to think he will want to shower them and his fi­ancée with gifts. How­ever, he made a pro­vi­sion for R3 000 as ex­tra spend­ing and is de­ter­mined to stick to it this fes­tive sea­son,” says ad­viser Moshi­ase Okeke.

“[Can­di­dates] said that thanks to the Money Makeover com­pe­ti­tion, they are more aware about over­spend­ing. I sus­pect that they will end up buy­ing some gifts, but we will be able to see in Jan­uary whether it had an ef­fect on their fi­nances,” says Frank Mag­wegwe, head of Mo­men­tum per­sonal ad­viser ser­vices at Mo­men­tum Re­tail. Tip

It is good to have a fes­tive sea­son bud­get, but you need to stick to it. When you go shop­ping, take a list and leave the credit and store cards be­hind. Draw just enough cash to cover your planned ex­penses.

DEZEMBA Pre­pare for Jan­uary

Although re­ceiv­ing a pay cheque on De­cem­ber 15 feels like a wind­fall, the re­al­ity is that it has to last for 40 days. Re­mem­ber that there are also many ad­di­tional ex­penses in Jan­uary and you need to en­sure that you have money set aside for Jan­uary’s bills. If you can, pay your monthly bills early.

Dipolelo has sev­eral com­mit­ments in Jan­uary and will not be re­ceiv­ing a 13th cheque, so he needs to plan care­fully. Most years he needs to buy a school uni­form, bag and shoes for his son, but for­tu­nately this year these are still in­tact.

He will need to pay for school books, sta­tionery and school fees, but he has planned for these and will con­tinue to pay school fees from his monthly bud­get.

An ex­pense that will cause some strain is his reg­is­tra­tion fee for his mas­ter’s de­gree in town plan­ning. His em­ployer’s bur­sary will re­im­burse him, but only in March – he needs to se­cure his place in Jan­uary.

This money will come from his ad­di­tional work over the next three months and, once he is re­im­bursed, he can again fast-track his fur­ni­ture ac­count re­pay­ment. Tip

Give gifts that help ease a bur­den. As a child, we al­ways got a Christ­mas stock­ing from “Father Christ­mas” and it was filled with all the things we would need for school, like sta­tionery, school shoes and a school bag. Also ask fam­ily mem­bers to rather give prac­ti­cal gifts such as clothes to your chil­dren, which will take the bur­den off you. How to use the ex­tra money

Most of the can­di­dates will be re­ceiv­ing their bonuses in April.

Iz­i­man­gal­iso is the only one who will be re­ceiv­ing a 13th cheque. A por­tion will be used to pay for her daugh­ter’s school fees, books, sta­tionery and uni­forms. The rest will be paid into a 12-month fixed de­posit ac­count to help build up her emer­gency fund.

The prob­lem with only us­ing your bonus or 13th cheque to set­tle debt is that you never use it to start build­ing wealth, and your bonus sim­ply be­comes a way to con­tin­u­ously fund your life­style. Tip

Use some of your bonus to start an emer­gency fund or boost your in­vest­ments, not just to pay off debt.

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