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15 Dec 2014

Smart Money Decisions in December Help in the New Year

Debt, Money Management No Comments

The festive season is here and most of us are counting the days until the holidays. For most South Africans, December is a time for family and fun in the sun – but it is also typically a time when spending is at an all-time high.

The National Credit Regulator is urging consumers to be vigilant when entering into credit agreements, says Mpho Ramapala, acting manager of the regulator’s education and communications department.

“Consumers should be wary of misleading terms in advertisements and direct solicitation for credit, such as ‘no credit checks required’, ‘blacklisted consumers welcome’, ‘free credit’, ‘cheap credit’, ‘affordable credit’, ‘low cost credit’ or any wording that has substantially the same meaning.”

“If you want to begin the new year in a financially sound position, be aware of how you spend your money during this period, and save for the new year,” Ramapala advises.

TIPS TO HELP YOU START THE NEW YEAR ON THE RIGHT FOOT

1. Budget
Make sure you understand how much money you have available to spend this festive season. Make a list of all your expected expenses – such as food, accommodation, entertainment, gifts and extra petrol. If there’s a shortfall, accept that you’ll need to scale back.
Don’t cheat by including how much you expect to get from a 13th cheque or annual bonus. If you are fortunate enough to get a bonus, don’t blow the cash, but rather use it to pay off loans, make an investment or save some for a rainy day. Don’t forget about your debt and debit orders.

2. Say no to credit
One of the biggest financial traps over the festive season is the excessive use of credit. This implies that consumers look to finance their festive season through debt, especially when it comes to buying gifts. If you have to borrow money, make sure you borrow only for what is strictly necessary, and ensure that you can afford the repayments.

3. Gifts
There is no way around it: for most of us, the festive season is all about giving. However, this doesn’t mean that you can’t be financially savvy about being generous.
Avoid wasting money by making sure the gifts your loved ones want (or what you choose for them) are within budget.
Giving gift vouchers is also a great way of sticking to your budget; alternatively, for the ultimate act of giving, consider donating to a good cause on behalf of your loved one.

4. Saving for January
There’s nothing wrong with enjoying yourself during December, but remember that January awaits. Don’t forget there are household accounts like water and lights, the bond, the car, groceries, fuel, and other expenses that have to be paid at month end.

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