The festive season is upon us and as much as we all relish letting go, balancing spending and other indulgences with a bit of discipline can go some way to curbing January’s financial hangover.
The festive season hype lures us in. From special deals and discounts to holiday offers, it is very hard to resist temptation. By taking small steps towards changing entrenched habits, you can enjoy the festive cheer without fearing the consequences.
In the wake of what has been a tough year for most of us, with the VAT increase, fuel price hikes and volatile markets, spending more cautiously than usual, and earmarking a portion of any unexpected income for saving, will set you on a steadier course for 2019.
Below are three tips on how to give yourself the gift of balance this festive season:
1. Have a plan, and be accountable
Put a realistic budget together that accounts for your holiday spending as well as the demands of January. Your budget may also include ways to cut down spending, e.g. using vouchers, looking out for specials on items you may need over the festive season, and group discounts on activities or entertainment.
Consider how much you can afford to spend on groceries, gifts and entertainment on top of your standard monthly outgoings and build in a bit of room for unexpected expenses. Remember that the amount you are comfortable with spending should not be a target – if you spend less than intended, you could consider saving the balance. Careful planning can allow you to exercise financial discipline while still having fun and spoiling your loved ones.
2. Think differently about any windfall
If you are lucky enough to get a bonus or an unexpected windfall, take some time to think about how to maximise it. Consider paying off your debt or contributing to a unit trust or a tax-free investment.
While investing deprives you of some short-term pleasure, it may help to keep in mind that investing is just deferred spending – you put money away to grow so that it can meet your needs in the future. Eventually that money should return to you as spending; delaying your gratification just means that you may have more to spend later.
3. Don’t fall for the shopping spending cues
Clever marketing tricks – both online and at the stores – encourage us to spend. Key retail periods, such as the popular Black Friday, are designed to make you spend more, through targeted deals and with tactics such as ‘mega savings’.
Do your research on whether a deal really is a ‘saving of a lifetime’, or whether it is something that you can do without. When you are shopping instore, be aware of your own behaviour. We subconsciously aim to fill up our shopping baskets without thinking about it – a trolley doubly so. When you’re looking for one or two things don’t pick up a basket.
Spending more may feel inevitable this festive season, but smarter planning and savvy saving can alleviate the pressure. You hold the power to your purse strings; make sure that you come out the other side with a financial benefit, rather than a deficit.