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Does the festive season make you on edge when it comes to spending excessive amounts of money? Well we have you covered. Check out our tips.
The festive season is finally upon us and in just a few weeks, celebrations and gift-giving will be in full swing. With the fun and excitement in the air, we still need to be mindful of our cash.
Many people get themselves further into debt during the holiday period and then take the entire year trying to catch up with their finances.
For the lucky few who do receive a bonus, many tend to spend all the money instead of putting some away to save.
We have a few tips to ensure that you save some cash these holidays, take a look.
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1. Focus On Productive Saving
If savings are the bane of your existence, set up non-conventional ways to put a bit aside. According to our financial expert, Graham Jones, saving a bit of money will ensure that you aren't completely broke by the end of December."One of the main reasons that debt occurs is because of poor planning. Most people get their December pay check early in the month and forget this is need for survival in January. First tip would be side pocket what you need for rent, car payment, insurance and survival for January the rest is your December pocket money."Keep a piggy bank next to your bed and try and put all your small change in the jar. Also, if you have any bad habits, like swearing or lack of exercise, why not 'punish yourself' each time you swear or forget to exercise. That way you are insuring productivity and saving cash. Jones also suggests that people set up a debit order to save without the effort of actually putting money aside. "Set up a monthly debit order to a money market account and actually save, it is a habit. Self gifting is a thing."
2. Travel Alternatives
If you are planning on travelling anywhere over the holiday period, remember that South Africans can expect a fuel price hike in December. This puts a further damper on your budget as many people like to go road trippin' or be out and about on the town. Even if you are heading to the office each day to work, Jones suggests that people should just car pool. This will reduce traffic on the roads, as it is bad as it is and it will save you money! The Fuel Log app is also another way to assist in your fuel expenditure for the month. All you need to do is download the app and you can log each time you spend money on fuel. *The Fuel Log can be downloaded on Play Store.Is January going to be really tight? We have tips on getting through a month on a shoestring budget!
3. Draw Up A Budget
This one is a must before the season is in full swing and the paychecks roll in. "Budgeting is the first step, if you do not know how much your expenses are then you do not know how much you need to have set aside," explains Jones.Once you have drawn up a budget, you must stick to it to insure that you make it through the money without incurring any debt. Don't let all the sales and great Christmas specials lure you into spending more money than you planned. Draw cash out of your account, this will make managing your money a bit easier because you can physically keep track of your spending.
4. Banish The Credit Card
South Africa is one of the most in debt countries in the world. According to a Stats SA report released this year, there have been 48 169 summons nationally that have been valued at over R350 million. Although possessing a credit card is good if you want to maintain a credit record in order to make big purchases on houses or cars, the score has to be good."If you are going to go into debt firstly have a plan to pay it back, a bad credit score sticks around. Try not get into more than three months of disposable cash debt. Then plan to rather have savings next year then use your credit card. Set up a month debit order into a money market account where you do not get instant access," says Jones.Jones also encourages people who already have credit card debt to use their bonus to get rid of the debt.
"If you have debt I would use this bonus to get myself out of the debt trap, this is the best present to yourself for the new year. Then chop that credit card up."
5. Stash It Away For A Rainy Day
Long term investments is a great way to save money while you live your life. Whether it be investing in the stock market or purchasing a property, this type of savings will help you in a time of need. If that is too much effort, there is an exciting app called Stash to do everything for you. All you need to do is download it onto your phone and the app does the rest for you.So What Is It?
Stash invests your spare change on your cheque, credit or savings account. Every time you swipe your card, the app detects the transaction and then it rounds the amount up to the nearest R10. This extra change is then invested into SA's Top 40 Biggest Companies and as the companies get bigger and grow, so too does your cash! The nice thing is that this is a tax-free investment and you can transfer your savings back to your account at anytime. The aim would of course be to save as much as you can and leave it in the stash indefinitely.How Much Can I Stash?
You can currently stash R33 000 from March 1 to the end of February each year. So far, there has been R500 000 stashed by one person in a lifetime but this could increase if you start now. If you have any accounts with the following banks, you are ready to go:- FNB;
- Standard Bank;
- Absa;
- Nedbank;
- Investec;
- RMB;
- Capitec;
- DiscoveryCard (VISA and MasterCard).
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