Budget for the Holiday season

South Africa is a buy-now, pay-later society. The effects on young people’s financial literacy are thus characterized by the same behaviour patterns as parents and society. These are high credit and high consumer behaviour with very little savings, and in turn high social risk behaviour. Money Savvy Kids(MSK) is working to change this disastrous pattern

Per the National Credit Regulator, about 10.3 million South Africans are finding it difficult to meet their monthly debt repayments. Octogen, which specialises in financial wellbeing, reports that in 2016 the average household spent a massive 49% of after-tax income on monthly debt repayments making it ‘difficult’ to ‘impossible’ to keep up with their debt repayments.

Far too many South African consumers go into the festive season saddled with debts they can’t comfortably repay, and with little or no savings and after a holiday spending spree, end up even worse off in the new year.

MSK is not just a product. It is a pathway to developing mind-sets that will ensure South Africa’s children not only work their way out of poverty, but that they have the tools to stay out. On that note, we are offering tips to smart spend this holiday season and have a no worry start to the new year.

  • Set a budget for holiday season expenses like presents, gifts and entertainment
  • Budget for January expenses like school uniforms and stationery and do your back-to-school shopping before your holiday shopping.
  • Don’t spend what you don’t have! Don’t shop on credit
  • Gifts are a huge expense. It takes courage not to overspend! Work out some guidelines around buying gifts with your extended family. Once you know who you are buying for, budget an amount per gift, and stick to it.
  • Don’t be tempted to buy anything other than what you’ve budgeted for. Avoid the impulse purchase!
  • Keep in mind the old cliché that it’s the thought that counts. Something small and personal, something homemade, or even a heartfelt card, will be well appreciated.
  • Spend time with friends and family, for instance. If you’re a highly social person, it’s tempting to play host all season. You can just as easily be the life and soul at someone else’s party!
  • If you are entertaining, don’t be afraid to ask your guests to contribute. Ask each guest to bring along a salad or contribute a dish, and everyone should bring their own drinks.
  • Making your own decorations (or swapping old ones with friends and family) can reduce costs and be a lot of fun for the whole family.

With a bit of planning which involves budgeting and a lot of smart spending you will step into 2017 debt free and maybe even with a little bit of extra cash in the bank!

Start planning now and smart spend, and live within your means!