Tips to avoid overspending this silly season
With the festive season upon us, spending is likely to increase for many people, putting some at risk of dropping cash they might not have.
This comes on the back of South Africans spending more during the recent Black Friday events compared to 2020, says FNB Money Management.
It said this spending pattern is most likely to continue into the festive season. The top categories during the Black Friday sales were groceries, clothing, transport and entertainment, and FNB Money Management predicted these could continue as the top categories in the coming weeks.
Head of FNB Money Management, Ester Ochse, said it was possible to manage one's money well during these expensive times.
“The first step is to make a list of everyone you need to give a present to, and the number and size of family gatherings.
“Once you have your lists, decide how much you can spend on each category, like gifts, groceries and entertainment. This is your budget, and it must be realistic. It should be an amount you can afford,” she said.
She advised consumers to try not to use credit to cover their festive season costs.
“Ideally this money should come from savings, a bonus or 13th cheque.”
She advised consumers to try to do some shopping online, as this might reduce the amount people spend on browsing items they do not need.
She urged consumers to use credit cards carefully and advised them to clear the outstanding balance in full at the end of each month and not just pay the minimum amount. This would avoid high interest costs.
People who received a windfall such as a bonus should be responsible with the money.
“Rule of thumb is 80/20 — 80% of the money to pay off debt, save for an emergency or cover January expenses such as school fees. Then spoil yourself with 20% of the money or use that for the festive season,” she said.
She said those paid earlier in the month must avoid the temptation of spending the money during December.
“A good tip is to move the money into a quick access savings account, then 'pay yourself' on your normal salary date. Remember that several financial institutions will process debit orders earlier in the month, so make provision for this as well.”