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Traditionally, people spend more in the build up to Christmas – not only on gifts but on holiday expenses and eating out.
This means that, often, people start the New Year in the red or are pressed for cash until their first paycheck.
With two to three paychecks remaining, we offer tips on how to save now to ensure you are not in the red in 2022 and can afford that little bit extra if you want to splash out.
1. Create a Christmas budget
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It is important to know what you’re working with. Do you have one salary, are you combining two salaries from two people, what are the monthly responsibilities from which you can’t break away?
‘If you’re looking to formulate a budget, take your net salary (after tax) and subtract your monthly debit orders and payments – these could be the monthly instalments on your credit card, personal loans, or cell phone bills. Once you have subtracted these amounts, look at your responsibilities and dedicate an estimate of what you need to spend on each responsibility per month.
‘Subtract the responsibilities, and your possible savings lie in what is left over. Keep in mind the fact that saving 10% of your net salary is an ideal starting point. Out of this tuck some money safely away for the festive period,’ says Sbusiso Kumalo, African Bank chief marketing officer.
2. Don’t make a stressed decision
Most of us leave things to the last minute and end up panic buying and spending way too much. Make a list of what you need.
Kumalo advises: ‘This takes out the guesswork and allows you to really select thoughtful gifts. Stressed decisions are not often the best decisions and planning early helps with this.’
3. Start buying presents now
It may seem strange to start the Christmas present buying process now, but you could save money as well as time. This will enable you to spoil your family, as you will have more money to play with.
Remember, there’s discount holidays that apply between now and Christmas such as Black Friday (26 November) and Cyber Monday (29 November). Keep an eye on the price of the item you want to buy and if it dips then take advantage of it.
4. Plan for compulsive spending
You will undoubtedly be enticed by the marketing and specials that come before and after the festive period.
Kumalo says: ‘It is important to take note of the fact that impulsive spending does happen – whether it’s on a new pair of shoes, a holiday or a lavish dinner.
‘Taking ownership of the fact that spontaneous spending does happen will ensure that you set aside a small sum of money, allowing you wiggle room in which to enjoy life as it happens.’
5. Learn to say ‘no’
If uncle Sophiso wants you to spend more on Christmas than what you wanted to, learn to say “no”. If “no” is too powerful a word, suggest alternatives such as getting other family members to pitch in with the costs or asking them to contribute to a ‘potluck’ Christmas. If everyone pitches in to create and bring a dish the costs of the celebrations can be maintained.
When it comes to gifts, use the Secret Santa approach. ‘Let everyone just buy one personal gift for one person instead of smaller gifts for everyone. This is easier to budget for and usually really appreciated by the recipient,’ say Kumalo.
You also must know when to say “no” to yourself. ‘While a new suit, handbag or car may seem like a good idea now, it is important to remember that you may have to spend months or years paying it off, which can have an effect on your cumulative savings. Practice the art of saying ‘no’ when temptation calls your name,’ says Kumalo.
Affording Christmas 2022 and beyond
We know that Christmas happens every year, but we still get caught out. The key is to budget for festive periods.
Kumalo adds: ‘Don’t be tempted to dip into your December savings or put your plans on hold to make other purchases. If you have followed the rules above, by October you should already have money set aside and you can start planning and buying early.
‘You will see the benefits when the festive season approaches, and you are prepared. You can also start the New Year off debt- and worry-free.’
