Reconnecting with family doesn’t have to break the bank
The holidays are just around the corner and going home to reconnect with family will be on the cards for many South Africans who have migrated to other provinces in search of opportunities.
Stats SA shows that, just looking at the Eastern Cape, over 1.5 million people have left since 2006. Most look forward to having fun times, but the trips traditionally also come with expectations from family and friends of generosity in the form of gifts.
The temptation to borrow money to avoid disappointing can be tricky to navigate.
You need to plan to avoid the pitfalls of going big on debt. It’s not a good idea to use debt, whether a credit card or a personal loan, in order to pay for the trip home and the related festivities. Doing so can lead to a bit of discomfort later as by using debt you are borrowing from your future salary.
You will have to take more out of your salary than you actually spent on the festivities because of the interest you will need to pay on the debt. You will be leaving less money available to grow your savings and wealth. A smart move would be to be innovative with less so that January can also be a stress-free month.
First start planning how much you can afford and then how you will get home such as self-drive, take a bus or fly.
The option chosen can affect money left in the pocket for other things without needing to borrow money. For future trips, rather plan early and kick-off saving from February, for example, R300 each month would mean R3 000 by end November.
Avoid the temptation to be too extravagant to impress people back home by spending more than you have. Try not to use the credit card as a lifeline to meet expectations.
Check with family and friends if you can club together to buy a list of festive goods and stick to it. For example, buying drinks, snacks, grocery items on Black Friday.
Parents, for example, need to plan to cover school fees and back-to-school needs before getting paid in January.
Companies tend to pay December salaries early, which makes for a very long January, so one needs to factor this in and put money aside for January.
Reconnecting with family and friends is important, and despite challenges, there’s an opportunity to be smart with money, with a festive spending budget, while having fun and enjoying the holiday season.
Kenosi Magosha is the Head: Client Solutions Savings at Sanlam Personal Finance