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With seven weeks to go, South Africans are heading into one of the biggest spending seasons of the year – Christmas. Every December, thousands of us fall into a deep debt trap, but there are ways to avoid this, writes Angelique Ruzicka.
Last year, Stats SA highlighted that we spend an average of R776.22 spoiling dad and R328.74 on presents for mum.
With boys, the average spend was R173.95, while girls got R124.60 worth of gifts.
For a family of four, that comes to R1 403.51 on presents – and that’s not even taking into account gifts for extended family members and the dog (who is apparently gets treated to R140.23 worth of gifts).
It’s extremely easy to get wrapped up in the euphoria and goodwill that comes with the festive season, but this means that thousands
of South Africans find it hard to make ends meet in January after blowing their bonuses and salaries in December on food, presents and entertainment.
Here are a dozen ways to make sure you have money in your pocket when the new year starts:
1. Buy some presents now
It may seem odd to think this far ahead, but if you buy dad’s present in October, mum’s present in November and the kids’ presents in December, you will be spreading the load over three salary months instead of landing the burden on your bonus and December pay.
Gary Epstein, managing director of EasyBiz QuickBooks, says: “Create a budget – gifts, parties, getaways – and divide that amount by the months that lead up to the festive season. However, one may have to be a little more diligent with only two months to go.”
2. Shop alone
If you shop alone, you’re less likely to get distracted by the demands and whims of your children.
Ideally, shop online so that you can buy stuff in the comfort of your own home and don’t feel pressured at the till if you want to return something to the shelf because you’ve gone over your budget.
If you have to go out to the shops, Epstein advises you shop on a full stomach: “That way, you shop for what you really want and not with your hungry/thirsty eyes.”
3. Book your holiday now
There’s always a mad rush to book family trips in December, and the best deals are likely to be over by now.
“Booking early is key here and it also gives you time to spread the costs over a few months.”
4. Only spend what you have
“Take a look at what you actually have available to spend and make it work.
"The easiest way to not go into debt is to use cash instead of credit to buy gifts because you’ll be forced to stick to your budget.
"When you use a credit card, it’s way too easy to lose track of how much you’ve spent and on whom,” recommends Epstein.
5. Do your financial planning
Think about who are you inviting to which gathering, who is staying where and what you want on the menu.
Rita Cool, a certified financial planner at Alexander Forbes, says: “Do your household budget and see how much money you have between now and December to pay for everything you are planning.
"You’ll also be able to see if the menu needs to change from lamb to chicken, or if everyone must bring their own drinks.”
6. Consider a Nupp
Every year, UK-based financial guru Martin Lewis promotes his pre-Christmas Nupp (no unnecessary present pact).
It’s a campaign he says aims to take the stigma out of not giving unnecessary gifts.
He argues that not giving can be a bigger gift because buying someone a gift obliges them to reciprocate, even if they don’t have the money.
He doesn’t think that children should be included in the Nupp as this is aimed more at that pair of R100 socks that you buy for uncle Thami every year.
If this idea makes you feel like a Scrooge, he suggests Nupp Lite, which encourages you to agree to a limit of between R97 and R195.
7. Don’t forget about January
When you do your Christmas budget, remember that your money has to stretch to the end of January.
Cool says: “Most people have annual fees or school fees that must be paid in January, and you don’t want to be short for that.”
Think about all the expenses that you usually pay for in January, and even consider your New Year’s resolutions that may see you spend money in January – like wanting to improve your fitness by joining a gym.
8. Look out for discounts
“There are often discounts on bulk items that can be split and repackaged for individuals – three for two discounts are common ahead of the festive season,” says Cool.
“Perhaps buy big bags of sweets or soaps that can be repackaged to become individual gifts in new baskets or glass bottles that you also purchase in bulk.
9. Cash in your rewards
If you belong to a rewards scheme such as Pick n Pay’s Smart Shopper, Clicks’ ClubCard and FNB’s eBucks, now is the best time to cash in and buy gifts at a discount and in advance.
Remember, if you don’t use some points for certain reward schemes now, you may lose your points in the new year.
If you don’t belong to any reward schemes, consider signing up for free ones in January so that you can save the points and get presents at a discount next Christmas.
10. Club together for gifts
Gifts for people outside of your immediate family can be catered for by sharing the costs.
For teachers’ gifts, for example, ask around if other parents are interested in clubbing together to buy the teacher a gift voucher.
Cool says: “Every year I’ve suggested this, parents were relieved to do this and the teachers love it because they can only handle so many soaps and chocolates at a time.
"If people club together like this, you can actually give slightly less for the same ‘impact’, as you don’t have to spend money on packaging.”
