By Bongiwe Zwane-Maseko
With just a short while left before Christmas, the festive spirit is already in the air. Most people are looking forward to a break in December to rest and recharge their batteries.
The festive season is also a time when spending increases and shopping is top of the mind. Economists say around this time of the year, people spend the bulk of their earnings on groceries, clothing, transport, and entertainment.
In South Africa, consumer patterns indicate that people spend about 50 per cent of their December salaries on food and alcoholic beverages! There are no local statistics to compare but Eswatini spending patterns are likely similar. Despite the festive season being short, it leaves many people broke and in debt by the beginning of January.
A Consumer Science lecturer said even people who are usually very vigilant about their spending usually throw caution to the wind in December because they feel they deserve to be rewarded for working hard throughout the year. She shares some tips to manage your money:
Make a list of gifts and groceries
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. Then track your purchases against these lists.
Set a budget
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. Try not to use credit to cover your festive season costs. Ideally, this money should come from savings, a bonus, or a 13th cheque.
Making gifts is a great way of saving money while entertaining the kids. There are all sorts of ways to make gifts, like baking biscuits, making preserves or other keep keepsakes for family and friends.
Use loyalty programmes
This is a good time to use your saved-up loyalty cash or rewards. For example, if you have saved using Shoprite or PnP vouchers during the year, use them to buy presents or fuel if you’re going to travel.
Using extra money
If you do get a windfall such as a bonus, be responsible with this money. The rule of thumb is an 80/20 principle – 80 per cent of the money to pay off debt or save for an emergency or cover January expenses such as school fees. Then spoil yourself with 20 per cent of the money or use that for the festive season.
Avoid the long Janu-Worry
If you are paid earlier in the month, avoid the temptation of spending this 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.
Local financial literacy expert Terrence Thwala said the festive excitement is hard to miss. He said during this time, business owners are looking forward to making a lot of money, and a majority of people are looking forward to having fun with their families.
“One then wonders who is going to be the final winner, much as one will wish to know what determines a winner in this game. First things first, we must caution that your November salary is meant to cater for your December living expenses because your December salary will cater for your January expenses. It is very important to put your ducks in a row so that you do not finish your December salary in December lest you fund your January expenses through debt,” he said.
Thwala said emaSwati need to consider a few things going into the festive season that can make them look forward to January.
- The only way of not misusing money is not to have it: It is advisable to pay all your fixed expenses in advance so that you avoid having cash lying around. If you get paid just pay for your January rent, school fees, etc, and avoid thinking you will do that when you come back because you may come back with no money.
- Planning is everything: Plan your spending so that you do not find yourself spending more than you were willing to. Be it a family gathering or outing with friends, know in advance how much you are willing to spend on it and stick to your budget.
- There is no value in eating: People usually explore things they have never tested, and in the process spend money on things they will eventually discard. We do advise people to buy simple food enough to cater for everyone and avoid wasting leftovers because it may save you during rainy days.
- You cannot attend all the events: As you may know by now, Christmas is usually associated with a series of events. People get several theme colour event invitations, and if you can do your math, each event costs you not less than E1 000 and if you have five invites, you have to budget not less than E5 000. Sometimes sending a gift is good enough, unless it’s a close family or friend.
- Look for expiry dates of the items on sale: Most of the time there is a reason for items to be put on sale, and the expiry date is one of them. Before buying in bulk thinking you are saving, please check the expiry date to avoid discarding a lot of food you have spent your hard-earned money on.
“If you will go by the festive spirit and fail to observe the highlighted pointers, you will definitely be the loser in this game, and your January will feel like it’s 62 days, and you will most likely be going to start your new year with unplanned debt,” said Thwala.