The festive season is a glorious time for getting together with friends and family, for celebration, for gift-giving, and of course, a little indulgence. The problem is that this time of year can also lead to financial debt and stress if not managed carefully. In fact, as a result of all the spending in December, many South Africans experience what’s known as the ‘January blues.’  

If you’re among the hundreds of thousands of people who tend to overspend during the holidays only to find yourself struggling to meet your financial obligations in the new year, then fear not. We have put together a handy guide filled with practical steps to help you manage your spending and keep debt at bay. 

Plan Your Budget Early 

Sit down and set a festive budget ahead of time. This is an absolutely essential step, because this is your opportunity to be intentional about you can and cannot spend. Take this moment to allocate specific amounts for gifts, entertainment, and other holiday expenses. You should then track your spending to ensure you stay within your limits.  

Every time you put something back and don’t ‘add to cart,’ just tell yourself that by sticking to your budget during the holiday season, you will avoid a financial hangover in January. 

You can even use our Monthly Personal Budget Calculator to help you work out a realistic budget that you can stick to. 

Stick To Essential Monthly Payments 

No matter what, your regular financial obligations, like your rent, utilities, and insurance premiums, are still going to need to be paid on time. We all wish these bills would take a holiday, but sadly that’s not going to happen. That’s why you need to make sure that these expenses are covered before indulging in festive purchases. This is actually a vital part of setting your festive budget – making sure that you have enough for your needs before you spend on your wants. 

This approach will help you avoid falling behind on important payments in January, which could affect your credit record and future borrowing capacity. 

Avoid Using Credit Cards 

It can be extremely tempting to use your credit card during the holidays. The thing is, credit cards have some of the highest interest rates. Spending on your credit card is what will lead to unnecessary debt, so rather stick to your other cards (debit, cheque, or savings) or cash instead. If you don’t have the money available now, think long and hard about this purchase. It might be in your best interests to skip the purchase rather than accumulate debt that will take you months to repay. 

Resist Holiday Loans 

Taking out loans to fund festive spending can seem appealing. Believe us, we know how tempting it can be, but really, this is one super expensive mistake to make. You see, high-interest loans can quickly spiral into unmanageable debt, especially if unforeseen expenses arise. What you can do instead, however, is focus on adjusting your festive plans to fit your budget and avoid borrowing to finance non-essential items. For example, if your budget doesn’t permit a five-course festive feast that requires many expensive ingredients to pull off, then spend some time on Pinterest or perusing your favourite cookbooks for a simpler but no less tasty festive menu that won’t go over your food budget.  

Be Smart With Bonus Payments 

For those who receive a year-end bonus or early December salary, it’s wise to plan carefully. You would be surprised at how quickly this money can be spent if you don’t pay attention and be intentional with this money. What you could do is spread these funds over the holiday period to ensure you can cover all expenses until the next payday. The last thing that you want to do is spend your bonus all at once, leaving you cash-strapped in the new year. 

Feeling informed?  

Our hope that these simple strategies will help enjoy the festive season without compromising your financial health. Essentially, it boils down to giving this month of merriment some thought, avoid the common pitfalls of relying on your credit cards, and stick to your budget. 

Not only will this ensure a stress-free holiday but also set you on the right financial path for the year ahead.  

Don’t forget that AA Inform is home to a range of useful financial tools and resources that can assist you along the way, including access our Monthly Personal Budget Calculator, which provides you with an excellent way to keep track of your finances and help you live within your means.