Januworry, the toughest financial month of the year for most South Africans, is soon approaching. Picture: Independent Newspapers.
By: Tyrone Lowther
JANUWORRY, the toughest financial month of the year for most South Africans, is soon approaching. Thanks to a combination of Christmas overspending and the long wait for payday, many will start 2024 with a financial hangover, stretching already bursting budgets past breaking point.
It is possible to have a festive December and a worry-free January without relying on credit and 2-minute noodles. All it takes is some smart money management, a few minor adjustments, and an iron-clad budget.
Lowther offers the following tips for a money-smart festive season:
· Budget like a boss – To draw up the December/January budget, start with a list of fixed expenditures and other essential monthly deductions. Ensure that you have enough funds to cover these expenses, plus a bit extra for savings and for any unexpected expenses. What remains is what you can afford to spend on festive fun.
· Be bonus savvy – Not many South Africans will be fortunate enough to receive extra pay this year in the form of a bonus, but for those who are this is the most important budget-wise tip: don’t blow it. It might be fun to have some extra cash, but it’s smart to use your bonus to pay off your debt (starting with debt with the highest interest rate first), to invest it, or to put it into a savings account.
Entertain smartly – If you are hosting family and friends over the festive season, make it a “bring and share”. Co-ordinate the different dishes guests bring so that you don’t end up with three roast chickens and no dessert.
· Cut down on gifts – Quality time with loved ones and hand-written, thoughtful cards are worth more than any gift, so speak to your family about keeping gifts low-key.
· Smart shopping – Don’t get taken in by the festive season hype. Do your research, shop around, and compare offers to make sure that you get the best deal. Buy in bulk, where possible, and use your loyalty cards to get a discount. Beware of too-good-to-be-true deals – online fraud is rife and criminals are always out to make a quick buck.
· Beware of being too busy – Making the most of your break doesn’t mean you need to break the bank. Rather plan for fewer activities and budget for these properly. For the rest of the time, look for less expensive or free entertainment alternatives.
Road trip – If you are planning a holiday, make sure that your car is road trip-ready before you leave to avoid costly repairs or even an accident. Plot your route. Plan your stops, set aside cash for any tolls, and save on fuel by having your car serviced.
Remember that making some minor adjustments to your driving style can boost your car’s fuel efficiency by as much as 40%. This includes checking the wheel alignment and air pressure, switching off the air con, removing unnecessary items from the car, driving smoothly and not stop-starting, and driving at a lower speed but in a higher gear.
The festive season can be all about spending time with your friends and family rather than spending large amounts of money. The small sacrifices you make, and the restraint you exercise now, will serve you well in the long run and set you up for a money-savvy, successful 2024.
* Lowther is the head of Budget Insurance.
PERSONAL FINANCE