Finance – Ball On A Budget

You don’t need to deny yourself a good time this December. Money experts unpack ways you can be financially savvy and still enjoy i-big dayz

Festivities are the order of the day in December — after all, you’ve spent the whole year balancing your salary against many financial obligations. Everyone deserves much-needed rest and the chance to reconnect with family and friends. But, this doesn’t mean your December salary needs to take a beating as you overstretch it to last beyond the festive season and into the New Year. So, how can we curb the temptation to spend unnecessarily, still have a great festive and emerge unscathed when the silly season ends?

DRAFT A SPENDING PLAN

It all starts with a clear understanding of the time lapse in-between your December and January paychecks, says Gerald Mwandiambira, a personal finance expert and author of Imali Yami, Chelete Yaka, My Geld, My Money: A Financial Planning Guide for Ordinary People. “Most of us get paid mid-December, which means there are 40 days or more between our December and January salaries. This makes it essential to have a budget in place,” Mwandiambira explains.

Creating a spending plan empowers you to be more responsible and steers you away from the temptation of spending unnecessarily, says Ester Ochse, product specialist for wealth and investments at FNB.

“Set up a budget for what you want to spend and stick to it as much as possible. Guard your wallet and try not to give in to the temptation of spoiling loved ones over this season, especially if it falls outside of your carefully-planned budget,” Ochse advises. To avoid financial stress, look at how much money you’ll have between December and the end of January, says Kenosi Magosha, head of client solutions savings at Sanlam

Personal Finance. This will help you not spend more than you have.

“Compile a list and split and prioritise your money according to your needs. This will allow you to work a lot smarter with your cash and avoid a financial hangover in January,” she explains.

SHOP DIFFERENTLY

Don’t fall prey to the shopping and entertainment marketing strategies that make those usually high-price items you’ve coveted all year seem more affordable now. Rather consider shopping for these goodies earlier – avoid impulsive, lastminute panic buys at all costs.

“Give yourself enough time to find specials, so look for these before the festive rush kicks in,” Ochse cautions. “Going the online shopping route is another option to consider,” she says. She also advises looking at cheap or free activities you and your family can do, such as going to parks for picnics, as opposed to experiences that drain your money.

DON’T TAKE LEAVE

Not taking leave from work may not be the most fashionable thing to do, but it’s one way to avoid overspending and falling prey to unplanned expenses, Mwandiambira says. “Opt out of the leave tradition and rather take advantage of the many public holidays that come with this month. But, if you’re forced to take time out due to your company’s closure, the best way to curb temptation is to try stay at home and avoid visiting family, except on the key celebratory days,” he adds.

NAVIGATING ‘BLACK TAX’

For many of us, ‘black tax’ is still a huge factor as we travel back home to spend time with our extended family members. Once we are there, we’re met with varying expectations — from that uncle who wants an expensive bottle of whisky because he claims he taught you everything you know, to the nieces and nephews who expect a reward for their outstanding performance at school this past year. So, what do we do?

“Exercise the art of saying ‘no’ to any unplanned family and friend contributions, as it’s better to be known as a pennypincher than a high-roller on debt,” Mwandiambira continues.

Being subject to paying ‘black tax’ when you visit home is a tough position to be in, Ochse acknowledges. She advises that you look at how much you can afford comfortably, without affecting your financial position. “Once you’ve looked at this, have an open discussion with your family to make them aware of what you can and cannot afford,” she says. This could be a tough discussion to have, but Ochse stresses that it’s important to address it, as opposed to getting yourself into unnecessary debt.

DON’T TRY TO KEEP UP WITH THE MOTSEPES

Showing off how well you’ve done over the last year is perhaps a natural reaction around this time, and has become the norm for many people. If pulling up at home with a new big purchase, such as a brand new car, has become part of your annual tradition, then let this year be the first year that you don’t, Mwandiambira advises. Ochse agrees. “Wanting to flash your lifestyle achievements to family, neighbours and old friends comes from building up expectations you continuously have to live up to. This will, in the long run, place you in a financially compromising position. So, if you feel the pressure to splash out on unnecessary luxuries, go back to your budget and remind the family of the financial recession we find ourselves in,” she adds.

FESTIVE FREEDOM VS FINANCIAL SAFETY

“The holidays are a time to recharge, reflect and reset for the new year. All these will help you focus on you, the individual, during this time,” Mwandiambira explains. If you’re unsure about striking a balance between being overly cautious and being caught up in the spirit of the season, then ask yourself if your spending is for you or others, and whether your shopping sprees will hurt your financial standing as you approach 2019, he suggests.

And, go back to basics, Ochse advises. “Prioritise financial basics like your children’s school fees, groceries, investment and emergency funds,” she says.