“It’s the most wonderful time of the year,” as the festive jingle goes, painting a joyous picture of celebrations and togetherness. However, the end of the year also brings silly spending temptations. From BIG ‘sales’ to ‘buy now, pay later’ offers, it’s all too easy to fall into the trap of overspending and start the new year with regret.
CreditSmart Financial Services urges you and your fellow South African consumers to make informed financial choices this festive season.
“While we’ve successfully guided over 300 indebted consumers to financial freedom in the past few months, the latest available statistics from the National Credit Regulator show there are still over 28 million credit-active consumers in South Africa, with more than 10 million having impaired records.
“This is quite a concerning reality. We encourage South Africans not to fall into debt traps driven by festive deals and too-good-to-be-true discounts. Excessive debt is not your friend. It’s vital to, instead, get a holistic view of your credit profile, gradually improve your credit score, and stay wary of debt-disguised ‘sales,’” advises Wikus Olivier, managing director at CreditSmart.
Here are Olivier’s recommended tips and considerations to help you manage your money and budget effectively this festive season:
1. Plan for Black Friday, Cyber Monday, and festive spending outings
Why it matters: Planning can help you avoid unnecessary debt.
How to do it:
Create a clear list of your needs versus your wants.
If required for your needs, set a spending cap for sales events like Black Friday and Cyber Monday.
Use budgeting tools or apps to keep track of your purchases.
Key takeaway: A well-thought-out spending plan and budget limit minimise the risk of overspending and credit reliance.
2. Budget for gifts & avoid impulse buys
Why it matters: Sticking to a gift budget prevents emotional or impulse purchases.
How to do it:
Decide how much you can afford for gifts before you shop, whether by item or person.
Pause and reflect before making purchases, especially during sales.
Consider fun, cost-effective gift exchanges during Christmas gatherings, like Secret Santa or Pass the Parcel, with a spending cap.
Key takeaway: Gift-giving doesn’t have to break the bank – stay mindful and creative.
3. Host collective celebrations
Why it matters: Sharing costs can help to make festivities affordable and enjoyable.
How to do it:
Spot deals on non-perishable food items early.
Organise potluck-style gatherings where everyone contributes a dish or activity.
Key takeaway: Collaborative celebrations bring people together while keeping costs low.
4. Shop smart & practice ‘cyber hygiene’
Why it matters: Sales and online shopping can lead to both financial and security risks.
How to do it:
Stick to your outlined plan, avoid browsing without purpose, and be wary of deals that seem too good to be true.
When shopping online, ensure the link that you want to click on (https:// – uniform resource locator/URL) is safe, your connection is secure, avoid using public Wi-Fi, and keep your device’s security software updated.
Key takeaway: A disciplined shopping approach protects both your finances and your personal information.
5. Don’t spend what you can’t afford
Why it matters: Avoiding excessive debt today ensures financial peace tomorrow.
How to do it:
Prioritise essentials like food, living costs, school supplies, or travel responsibilities over unnecessary and unbudgeted-for festive indulgences.
Pause to help resist those tempting credit offers – remember, the bank’s money is NOT your money so think before you splurge.
Avoiding overextending your budget will prevent stress and regret.
Key takeaway: Saying “no” to any shopping sprees now can save you from financial strain later.
As 2024 wraps up, remember that the true spirit of this season isn’t in excessive spending but in celebrating your achievements and cherishing time with your loved ones. By following these top five (5) practical tips, you can enter 2025 not only joyful but also financially sound. “This festive season, celebrate smarter, spend wisely, and prioritise your financial wellness – a gift that keeps giving into 2025 and beyond,” says Olivier.
PERSONAL FINANCE