December is on its way, along with the year end expenses that come with entertainment, festivities and holidays. “Now is the best time to start planning for year end,” says Eunice Sibiya, head of Consumer Education at FNB. “With enough time and planning, you can get through the festive season without the stress of adding debt.”
The festive season is the time that most people overspend. You feel the consequences well into the New Year. This year, make a conscious decision to plan appropriately for your year end expenses. Get all your finances in place and have a great end of year rest without money worries.
Review the previous year
Every year people are ‘surprised’ by how much money they spend over the holidays. Most vastly underestimate what they think their year end expenses will be. For example, FNB Credit Card sees a 30% spike in spending over the December period.
This year, before the fun and party season is upon you, go and have a look at your bank statements from last year. This is easy to do as statements are now available from most banks on a digital platform. Don’t go into a branch to do this, it racks up unnecessary costs.
Carefully review your year end expenses from this period. Add up all the spending, including, your credit card, cash withdrawn and anything spent on your cheque card. Don’t cheat as you’ll only be cheating yourself.
You should then have a real view of what you spent last festive season. You may have to go through your statements from before the December holidays if you booked holidays.
Put a plan in place
With an idea of how much you spent the previous year, plan for this year. Put an action plan in place that will stop you making the same mistakes this year.
Draw up a budget and decide on a way to tackle it. This can be tough as there may simply not be the money to go away for the holidays this year. But with a plan you can at least make informed decisions before the time.
Put away money from now
There are two months until year end, so part of your plan should include putting away money each month for a nest egg to get you through the period. Even it is a small amount, a few hundred rands will come in handy.
While finances may seem tough, think of the end goal. Find ways of cutting down for the next two months, with the end goal of having a great year end with friends and family.
Get buy in
Good planning may require the input and influence of your family. “Have an open and honest conversation with your family,” says Sibiya. “Make the decision together, such as working towards going on a holiday at the end of the year. That way everyone will be more inclined to help reach that goal.”