Don’t be silly, budget wisely this season

“We need to be financially responsible and financially smart throughout the year, but especially around Christmas and New Year, when money can fly out of your pocket at a pace.

“Your household budget should be able to withstand the test of the festive season considering that you will have almost six weeks before the next pay day,” says Eunice Sibiya, FNB head of Consumer Education.

Remember your January obligations and spend wisely.

She says when you draw up your budget for this time of year; you should allocate the appropriate funds to all the extra costs at this time of year. These could include items such as travel, gifts and entertainment.

If you’re easily tempted and can’t withstand the shiny lights and music that comes with this time of year, you’ll need to put plans into place.

“If you are going out for the evening, then only take a certain amount of cash with you for the night and once your cash is done, so is your evening. Also try to cut down where you can.”

Gifts

The biggest culprit of excessive spending is shopping and spending time in malls, but you could stay out of the malls and do your shopping online or spend time elsewhere.

Shopping online will not only help with the temptation of spending more money at the shops, but it will save on petrol as well, as most online shopping sites provide delivery of goods for free, or at a minimal fee.

Start budgeting for presents now. There’s no reason why you can’t buy presents throughout the year. By December you’ll have a stockpile of presents, it will ease the burden on your pocket during the mad rush and help you avoid falling victim to impulsive buying during this period. Also make sure that your gift is useful.

“If you are going out for the evening, then only take a certain amount of cash with you for the night and once your cash is done, so is your evening. Also try to cut down where you can.”

When it comes to affordable gifts, the value of getting creative should never be underestimated. Encouraging your children to make presents for their friends and cousins as opposed to buying them creates the culture that it is not “all about the gift” but that it’s truly the thought that counts and it is a great way to unleash their creative juices. Perhaps as an introduction to this idea, consider buying your children books that are filled with homemade gift ideas.

Children

If you choose to buy, buy presents that two or more kids can enjoy, instead of buying individual presents. For example, board games will keep them busy indoors while promoting interaction even with adults, while sporting gear like a bat and ball set will keep them busy outside.

It’s good exercise and develops social skills such as sharing. Another good idea for a present is to give your child an “experience” as a present.

Encouraging your children to make presents for their friends and cousins as opposed to buying them creates the culture that it is not “all about the gift” but that it’s truly the thought that counts and it is a great way to unleash their creative juices.

If you or someone you know has a cool toy, like a hot air balloon or four-by-four, then take your kids out on an adventure.

Children might like toys but also consider buying them interesting material or education toys for their next school year; this is a way of cutting future costs and investing in their education.

Adults

Presents always add up, but there are ways to keep costs down, particularly for the adults. Try Secret Santa with family or a group of friends.

All the adults taking part put their names in a hat. Everyone draws one name and you buy a gift for that person only.

The group can decide on a monetary limit for the gift to keep everything fair. You could also create a “wish list” from which your loved ones could buy from, either as individuals or a group. This way, you’re assured of getting something you really want.

Check out these gift tips for him

Going on holiday

If you are going away during the holiday season, only do so if you have saved up for it. Don’t let your holiday be an impulse buy, as you’ll have to come home to debt in the New Year. Most importantly, be strong willed.

Only you are in charge of your finances. Don’t spend recklessly with cash or card. Don’t open store accounts because you can’t afford presents you think you should be buying and don’t start 2015 with bills and debt.

Instead, break the debt cycle and manage your finances responsibly. If you’ll be receiving a bonus, use a portion of it to pay off some of your debt and start 2015 on the right footing.

Aneesa Razack, head of Strategic Growth, FNB Savings and Investments, says that the festive season is important to many people.

“It’s not a time where people worry about what they spend, instead, it is a period where we let our hair down and enjoy the end of another year.

“The issue, however, always comes in January where many find they have overspent and the next few months are spent trying to pay off expensive debt,” she says.

Razack says that the trick is balance.

“We need to learn how to have fun with the money we actually have available to spend.

“Being aware of the main reasons for an increase in spending will help you make better spending decisions.”

Here are some of the reasons:

• Getting into the spirit. Many have an emotional connection to this season. Memories of Christmas’ past bring with it happiness and excitement. When going into stores, we aren’t just confronted with choices; we see gifts and happiness on the recipients faces. Make sure that you don’t overspend when buying gifts. Allocate an amount you can afford per gift and stick to it.
• Alluring Christmas lights. From as early as October, retail stores display their extravagant Christmas decorations, while promoting their Christmas specials. Walking around, you’re exposed to all the bells and whistles at discounted prices, how can you resist? Don’t end up buying more things than you actually planned for. You need to distinguish between what you want and what you really need.
• Buying to impress. Many people focus more on how people will react to their gifts than the actual meaning. There is always the fear that your gift will be opened with “that’s nice” while your sister gets an “oh wow, I’ve always wanted this”. Keep it meaningful, it’s not the amount you spend but the thought that counts.
• Trying to be everything to everyone. The festive season is the time of year where family and friends get together. Watch out that you don’t end up playing hostess all season without setting some parameters. The end of the season will come and while you have fed and watered your family, you end with only some great memories, crazy photos and a bank account in the red. Don’t be afraid to ask your guests to contribute towards expenses, it’s easy to bring along an occasional salad or drinks, which will ease your financial responsibilities.