Staying on the straight and narrow with finances during festive season is not easy, but it can be done. During the festive season, most people let their guard down and fail to monitor how and what they spend money on.
Stephan Buys, Head of Strategic Collaboration at FNB Cash Investments, says “The best way to get around festive season spending is to set up a festive season fund, which can be used for year-end expenses.”
Buys says the ideal scenarios would have been to save for your festive season spending. “For example, if you had put aside R200 over a twelve month period that would translate to a R2, 400 saving at the end of the year, and depending on the type of your savings vehicle, you could have also earned interest. This money can be used to fund expenses such as presents or entertainment.”
“If you don’t have any savings, be strict with you budget to avoid overspending. Never fall into the trap of spending wastefully because when the festive season ends expenses such as transport, school fees and groceries will have to be accounted for,” he adds.
Having a December fund also means not having to scramble for extra cash at the start of the New Year.
Here are a few additional steps to ensure frugal spending during the festive season:
- Instead of dining out rather prepare meals at home; it works out cheaper especially for a large group of people.
- Never fall into the trap of spending money you do not have, because this only means you will sink deeper into debt.
- When an unexpected expense (big or small) arises, note it down and see how it will affect your budgeting in the long-term.
- Know what is spent versus what is earned; track your expenses as you spend
- Even though the festive season is a time to be merry, it’s important to identify needs and wants; a want is something you can’t live without. So if you can live without it for a while then the gratification can be delayed.
By following these simple steps it will be easy to control spending and also measure success, however, the next step is to maintain momentum.
All too often a commitment to save is made and the right steps are followed but there’s no consistency and its back to the old spending habits.
“A commitment to managing expenses also requires a mind-set change, but it all starts with identifying the problem and then taking steps to address it. It’s important to recognise the long-term impact indiscriminate spending during the festive season; it’s never easy to regain control of finances when you live beyond your means, know you limits and never spend money you don’t have,” concludes Buys