SMART SAVER: Avoid the financial crunch this holiday

The festive season is approaching at rapid pace, with stores already decorating for Christmas.

As Newcastillians start preparing for the holiday season, many might find themselves pulling out their credit cards to cover the costs. This endeavour can take up to six months to pay back.

Nolene Parboo, Senior Manager: Savings and Investments from Standard Bank, advised consumers to consider planning ahead by saving in advance to lighten the financial burden.

Ms Parboo offered the following easy ten tips to help get you started in saving and having the ideal holiday:

1. Look at your existing budget

The first place to look for extra cash is in your existing budget. People often waste money on impulse and convenience buys such as fast foods or the latest new gadget on the market. Start reviewing your bank statement to see where you are able to cut costs. This will help free up some cash.

2. Open a separate savings account

Newcastle might not be as large as Durban or Johannesburg, but we have a variety of banks. Consider opening up a separate savings account, one whereby the bank needs notice in order for the funds to be withdrawn. Transfer a set amount of money into this account at the end of each month. Not being able to obtain the cash immediately will help ensure you don’t dip into your savings on impulse.

3. Work out how much you will need to save

Estimate how much the holiday will cost to give you an idea of the amount you will need to save. Knowing how much money you need to put away each month increases your chances of reaching your goal and keeps you focused. It will also allow you to manage your expectations and encourage you to look at affordable options.

 

4. Save without spending

If your leave times are flexible, consider going away out of peak season, as this can help you save as much as 50%. Also review your bank’s rewards programme, which often offers specials or discounts for travel.

5. Sell unnecessary or unwanted items

Consider selling unwanted items that are no longer needed. You will be surprised how much you can earn out of items gathering dust in the garage.

6. Use the “Old money jar”

Take all the silver and bronze coins you have at the end of each day and put them in a container. This might seem rather tiresome, but the trick is to avoid exchanging the coins at the bank until you need the money. Consider getting the family involved by giving each member their own jar and running a competition to see who can save or collect the most amount of change. At the end of each month, do a tally on the money you managed to save.

7. Use your own bank only

Withdraw money directly from your bank’s ATM, as withdrawing from another bank is costlier and fees can add up quickly. Also ensure you are not paying debit orders for services no longer required.

8. Look at the way you use your car

Frequent unnecessary short trips can hike your petrol bill. Furthermore, if you are driving a car with a big engine, such as a V8, by scaling down to a smaller vehicle you can minimise your petrol bill, and also cut on insurance costs.

9. Stick to your current phone if it works

Everyone loves to upgrade their phones, but why change to the newest phone and incur an additional unnecessary expense if your old phone works perfectly well? Also, avoid having more than one contract at the same time. Saving a few extra thousand rand spent on a device during the year will give you extra days of holiday or assist in paying for daily expenses such as meals while away.

10. Be realistic about what you can afford to do

Remember money spent on credit is borrowed from the bank which needs to be paid back. If you can’t afford an expensive vacation, consider an alternative way to relax. Newcastle is close enough for people to enjoy the Battlefields route, Drakensberg and even the Ncandu Falls, Chelmsford Dam and Nambiti Game Reserve.