How to make your money go further this festive season - TopCo Media

Written by Topco Staff Writer | Nov 25, 2020 11:16:40 AM

 

To ensure you get through the holidays and enter 2021 with some money in the bank and your pocket, here are some clever financial tips from African Bank’s Head of Product and Customer Value Proposition Neil Thompson.

His top-tips to make your money go further are:

  • Work out a budget for gifts, holidays, meals and entertaining and stick to it. Remember that your regular expenses, such as rent and bond repayments remain during December and January.
  • Write down a list of everyone you want to buy presents for and write ideas of whatto get them next to their names. Don’t be tempted to buy extras.
  • Do your research, shop around and compare prices.
  • Buy small and significant gifts, rather than large and lavish ones.
  • Consider debt consolidation if you are struggling to manage your debt. It is especially helpful if you want to simplify your credit by settling other debt and turning several loan payments into one cost-effective payment.
  • Avoid spending money you don’t have. Buying on credit costs more.
  • There’s nothing wrong with being moderate. It’s been a tough few years for consumers and prices aren’t going to drop anytime soon. There is a whole year ahead of you after the festive season. Ask yourself what makes money sense before getting caught up in the festive spending frenzy.
  • Whatever your plan is for festive season expenses, stick to it. Don’t be tempted to dip into your savings.

 

Start 2021 right

The only way to get on top of your finances is to make a budget at the start of the year and stick to it.

“Learning how to budget properly and sticking to a budget is a discipline that everyone should learn,” says Thompson. “A budget should make provision for the here and now, but also include room for future goals, like retirement or education. How well you manage your money and payments now will determine your future financial wellbeing.”

To draw up a budget, make a list of your monthly expenses and debt repayments. Then draw up an income list. Deduct your expenses from your income to see what you have left over or if there is a shortfall.

“If you don’t have money left, it may be time to cut back on luxury items you don’t need. If you have additional income, use it to try and pay off debt.”

Financial goal setting is the next step. Make a list of your short- and long-term goals.

“Think about things like growing your family, education, planning for holidays, savings needs etc. Determine when you want to reach your goals and how long you will need to save. Make sure your goals are realistic, achievable and measurable,” says Thompson.

Start now to make 2021 easier financially.

“Make debt repayments. The quicker you pay off your debt, the less interest you pay. Get strategic and work out a debt repayment plan. If you need help, ask an expert.”

It is also important to start saving. “While setting a portion of your salary aside may seem impossible, especially during these times, sacrificing a few luxuries now will yield fruitful benefits.”

Saving for the future

Thompson’s tips for saving for the future include understanding what you’re working with.

For example, do you have one salary or are you combining two salaries from two people? Once you have drawn up your budget, determine what you can save. Saving 10% of your net salary is an ideal starting point. He also advises to live like you’re earning less. If you set aside 10% of your earnings as savings, you will need to live like you’re earning 10% less

While it might require some sacrifice, living a more frugal lifestyle now will ensure financial freedom. It is also important to practice the art of saying ‘no’. While a new suit or car may seem like a good idea now, you may have to spend months or years paying it off. This can affect your cumulative savings. To ensure that you can save, you must practice the art of saying ‘no’.

Thompson says it is vital to stick to your goals. Do you dream of buying your own home, pursuing your studies or starting a family? If you’re looking for motivation to save, decide on a financial goal and stick to it. Not only will this ensure that you find the motivation to save, it will also ensure that you stick to your goals to achieve a quicker result. You should also plan for impulsive spending. While saving is imperative to ensure a more stable financial future, impulsive spending does happen. 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.