Beware of financial hangover after party
AFTER THE party, comes the hangover. That’s the warning from leading economist Mike Schussler who believes debtridden South Africans splurging on the World Cup and its assortment of paraphernalia may pay the price for their financial carelessness.
“I anticipate a hangover after the huge World Cup party … Consumers are spending as if it was Christmas time. People are upgrading their TV sets and are spending extra on World Cup paraphernalia,” he said.
He foresees a “December effect” among some consumers. That’s when a month of excessive spending is followed by two financially slow months. It usually applies to the Christmas period but July and August are not going to be easy, economists state.
It’s easy for debt-struck consumers to ignore their bills because of the huge buzz that the soccer spectacle has set off, they said.
Some predict the erratic spending could see consumers fall behind on their payments. Debt Busters, too, has experienced a surge in debt counselling inquiries, which could well turn into applications.
“The euphoria of being caught in the World Cup has brought about a spate in overspending on World Cup memorabilia, tickets and entertainment,” said Luke Hirst, the managing director of Debt Busters, who believes the effects will last a long time.
Hirst suggests consumers stick to a budget. Another way to avoid the post-World Cup hangover is to avoid falling behind on monthly payments.
Consumers can find innovative ways to have fun and spend less at the same time. Schussler advises that “having a traditional bring and braai with family and friends or going to fan parks to watch matches” could help consumers cut back on unnecessary spending.
“Consumers should have a different approach as to how they wish to enjoy the World Cup. Also, consumers should think about the long-ter m effects that unreasonable overspending may have on them. Financial times are difficult as it is. Consumers don’t know how to manage their debt and are accumulating too much of it for unnecessary World Cup activities.”
Hirst added that debtstrapped consumers could negotiate with their banks.
“Negotiation is an art form that anyone can learn and you will be surprised how much extra money this can put in your pocket,” he said.