Avoid a festive financial hangover: How to enjoy the holidays without going into debt
As South Africans continue to settle into festive season spirit, they have been warned to plan carefully to avoid starting the new year in debt.
Image: Pixabay
As South Africans continue to settle into festive season spirit, they have been warned to plan carefully to avoid starting the new year in debt.
Shiree Coetzer, financial adviser at Alexforbes, warned that while the festive season is often a time of celebration and generosity, it can also bring significant financial strain.
"It’s a time when we finally ‘down tools’ for a well-deserved break, yet it often brings added pressure to spend more than usual. For those who celebrate Christmas, there’s the additional stress of finding the perfect (often expensive) gift for loved ones, frequently at the expense of the budget," Coetzer said.
"Many companies also pay out a thirteenth cheque or bonus at this time of year, but for many people, the money is already mentally spent before it even reflects in the bank account. Add to that the excitement of the festive season and the fact that most people are paid earlier than usual, and you end up with a December-to-January stretch that feels more like 199 days than a few weeks".
However, Coetzer warns that the result is often a financial hangover in the new year, with many people starting January in overdraft, tapping into recently cleared credit cards, or taking out short-term loans to stay afloat.
To avoid this, Coetzer recommends that South Africans:
- Cover normal, non-negotiable December expenses first – Make sure essential bills and commitments are taken care of, especially as some companies may debit accounts earlier than usual.
- Budget for January’s once-off costs – Include school fees, deposits, stationery, uniforms, and other irregular expenses.
- Set a festive activities budget and stick to it – Decide in advance how much can be spent on celebrations, social events, and year-end indulgences.
- Plan gift-giving carefully – Focus gifts on children or meaningful recipients, set reasonable price limits, or use a “secret gift” system for adults.
- Share responsibilities for gatherings – Encourage family and friends to bring dishes or drinks, reducing the host’s financial load.
- Include a personal treat within budget – Acknowledge your own efforts during the year, but only spend what your budget allows.
"By planning your festive budget, you’ll know exactly what you can afford as your personal year-end treat. A gift from you to you – the best kind"
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mthobisi.nozulela@iol.co.za