December is only a few months away, so now is the best time to start thinking about your expenses over the festive season – and planning ahead for them.
Mellony Ramalho, African Bank’s Group Executive: Sales, Branch Network, said often we don’t plan properly for the festive season and end up overspending and having to take on unnecessary debt. This can be crippling as the new year’s expenses start rolling in.
“If you are planning on going to see family and friends during December and want to take gifts, groceries and money, then now is the time to start saving or possibly buying and putting items away.
Remember that prices generally increase a month or so before December in anticipation of the festive season buying frenzy,” she said.
She suggests making a list of the items you will need to purchase and/ or the amount of money that needs to be put aside and create a plan. However, if you don’t have lump sums of cash on hand, there are other payment options you can use to your advantage. The option of a lay-bye agreement can assist you in paying off goods over an agreed period of time. The positives about this option is that no interest is charged on the items and you can purchase now, knowing the items will be available when you want them. On the downside, you do generally need to put down a deposit.
Additionally, a hire purchase (or an instalment plan) is an arrangement where a customer buys goods by paying an initial deposit and repays the other part of the cost over a period of time at an agreed-upon interest rate. The downside is that you will be paying interest on the amount still owing and if you don’t pay an instalment, the item will be repossessed.
The third option is buying on credit. The consumer borrows money from a financial institution to buy an item and pays back the total owing over a period of time at an agreed-upon interest rate. Ramalho explains when you apply for credit, it is important to ask for a quotation or a pre-agreement that shows the different fees and costs that will be added to your agreement. Secondly, you need to make sure you deal with a reputable company that is registered and abides by the National Credit Regulations, so you know that you’re being treated fairly. You will be able to take the items home straight away but you will be paying more for them in the long run.
Whatever your plan is for the festive season expenses, the key is sticking to the plan.
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