Saving tips to avoid dealing with post-holiday financial stress

2022 has been a long year. As the holiday season is upon us many people are looking forward to taking a break from work to go on holiday, to visit their homesteads and spend time with their loved ones. Following two years of a nationwide lockdown, many people are looking forward to making the most of the festive season.

As people indulge during the festive season, they will also be spending inordinate amounts of money on food, gifts, drinks, and entertainment. According to Wonga’s annual Summer Spending survey, South Africans spent a whopping R252 billion during the festive season last year, which translates into an average of R6 326 more than their usual monthly expenses.

“While this expenditure is great news for the retail and tourism sectors, consumers should be more circumspect about their spending, ensuring that they don’t spend more than they have, which may lead them to accumulate more debt,” says Boipelo Makgolane, Senior Corporate Financial Analyst at Hollard Insure. “In the period leading up to this time, which is often referred to as the silly season, consumers may be tempted to overspend and take on additional debt so that they can take advantage of the sales and discounts happening around us, or to finance that dream holiday.

“We encourage consumers to take control of their spending by examining their priorities and refrain from spending money on things that are not essential. We also encourage consumers to create a budget specifically for this period, so that they know how much disposable income they can afford to spend over this holiday period.”
Makgolane cautions consumers against the temptation to use credit to buy things that you cannot afford. “Taking out a loan to buy a gift or to finance a holiday means that I need to pay the full amount plus interest back. This makes the loan more expensive,” she says.

Makgolane warns that, amid the festivities, consumers should be mindful that there is life and expenses after December. “The month of January brings with it a set of expenses such as school fees, new school uniform, stationary, and transport costs. Consumers need to look further ahead and think about more long-term expenses and long-term financial goals in order to avoid post-holiday financial blues,” she adds.

She advises consumers to take charge of their finances this festive season by resisting the pressure to overspend. “Often we feel pressure to overspend and show off to friends or family that we can afford it. Your financial goals and budgets should be more important than what others think about your financial status. We should be working towards financial independence and not financial status.”

Some analysts forecast that levels of spending this year may be slightly depressed this because of inflationary pressures and the rising cost of food. These predictions were also made by German-based market and consumer data research company, Statista. According to the findings of their Christmas survey, 41% of the South Africans reported they would spend less money during the holidays in 2022, compared to 19% who said they will spend more.