And There Your Money Goes

The festive season is the most expensive time of year. You can get caught up in the spirit of gifting rather than giving so easily, and a lot of money gets wrapped up in the form of presents for co-workers, family, friends and neighbours. With all of the marketing done by retailers you can even end up buying a present for your favourite aunts’ bulldog.

To survive, you need to budget, is the advice of Niki Giles, financial director at Sygnia Asset Management.

“If you know how much money you have and what your expenses will be, it should be easier to keep your spending in check,” she says.

Sit down and determine how much money you have available for all expenses, such as entertainment, transport, gifts and accommodation. Remember that you will still have to allocate funds for all of your fixed monthly expenses. Always make sure there’s enough to pay for necessities and debit orders.

“Be realistic, it won’t help at all if your budget looks great on paper, but doesn’t work in practice.”

Part of your budget should be deciding upfront how much you can spend on gifts. Only include people on your list you’ll be spending time with and set aside an amount for each.

“Take this list with you if you go shopping and stick to it,” Niki says. “And don’t succumb to impulse buying, there will always be something more expensive and beautiful, but you don’t need to buy it.”

Especially not by maxing out your credit card. If you are tempted with swiping your card too easily and often, request a limit decrease from your bank. It is reversible and you can change it again at a later stage if needed.

If you have a gathering of family or friends you can discuss beforehand how all of you can curb going overboard with gifts. If you managed the expectations around gifts, you should have more money available for necessities.

You can decide on one gift per family, instead of gifts for every person. Many people currently experience pressure on their discretionary income and will probably be glad to spend less on presents.

A Secret Santa, where you put the names of all participating adults in a hat and draw a person’s name for whom you will buy a gift, is also a way to save money and not ending up with a lot of unwanted gifts.

“Try your best to avoid last minute shopping. The worst and most expensive items are usually bought at the last minute. Compare the price of an expensive item in various stores.”

Niki suggests making use of special offers, such as online sales. Online retailers’ prices are often very competitive because they buy products in bulk.

Holidays are expensive, so only go away if you have saved money for it. Save by taking a shorter break or have a staycation. You can also celebrate at home rather than going to expensive restaurants.

Keep record of your spending over the festive season. It will help you to stick to your budget, but it can also be a savings guideline for next year.

“Open a savings account specifically for December expenses and contribute to it monthly,” Niki advises. If you do this by debit order, the money automatically goes into the savings account before you can spend it.

“It will be easier to save over 12 months than to fork out a huge amount from your November and December salaries to cover costs,” she says. If you earn a bonus, try and put some of it aside for holiday costs. In this way you will be better prepared when the silly season strikes next year.