Financial mistakes to avoid this festive season
JOBURG – Planning your festive season should not be stressful, these helpful tips should put you ahead for the new year.
Financial circumstances have been a lot tougher this year for many South Africans due to increased individual taxes and the rising prices of basic goods. However, this is unlikely to drastically curb consumer spending during the upcoming festive season.
According to Ester Ochse, channel head at FNB Financial Advisory, “Most people struggle to contain their spending over the festive period and unfortunately, some also make vital financial mistakes which could have a long-term negative impact on their financial well-being.” The most common scenarios are that people tend to over-stretch their budget and those who do not have any budget often sacrifice in areas which could potentially ruin their financial position.
Ochse pointed out the following financial blunders as the main ones to avoid:
- Skipping debit order payments
Most people exploit the convenience of getting their salaries early in December by withdrawing every cent, leading to unpaid debit orders. Not only will you have to make double-payments during the following month, this could damage your credit profile.
- Taking up new debt to fund entertainment
‘Silly season’ spending should never be funded through debt. Any debt you take on should go towards financing a worthy cause.
- Using money reserved for school fees
Do not ‘gamble’ with your child’s prospects by using funds which are reserved to pave a better future for them. Resist the temptation to sacrifice school fees in order to generate extra money for the holiday season.
- Cashing long-term investments
It is not advisable to cash long-term investments just to fund your festive season entertainment. You will have to start all over again and take months to build a considerable investment portfolio.
Ochse concluded, “If you believe that now is rather late to start budgeting for the festive season, review your plans to align with your available budget. Better financial planning and discipline during the festive season will certainly put you in a better position ahead of the new year.”
