When we’re having holiday fun in the sun, it’s easy to allow spending to get out of hand. As a result, we often get back from a break and are instantly stressed about how we will make it to payday. The situation is even worse if you’ve loaded your credit card with holiday splurge purchases and now have that added amount to pay off.
It’s far better to invest a little time in planning and budgeting ahead of the holidays, says Justmoney Commercial Manger, Sarah Nicholson. This way you know that you’re in control of your spending, and can relax and make the most of your precious time with friends and family.
Drawing up a holiday budget and sticking to it is best tackled in several stages:
· Plan ahead: Start by listing all your expected holiday expenses;
· Spending limit: Decide how much you can allocate to holiday costs this year;
· Assign an amount to each category;
· Make lists; and
· Track your purchases.
Plan ahead: List all of your expected holiday expenses. This includes presents, cards and wrapping paper, travelling and accommodation, entertaining at home and eating out, and donating to your favourite charity.
“Many people only think about gifts and forget that there are a lot of other expenses too,” says Sarah. “This way, you’ll get a clearer picture of everything you need to budget for.”
Spending limit: Make a decision about how much you can set aside for holiday expenses. Don’t plan to spend more than you can afford or have saved for. If you use your credit card for an early bird special, pay it off before you leave for your holiday.
Assign your cash: Allocate your budget according to the different expense categories – assign a specific amount for gifts, restaurants, and so on.
Shopping list: Draw up a list before you head to the shops. Think of individual gifts within your price range and look out for sales. You can also check out special deals at https://www.justmoney.co.za/deals/. Don’t shop when you’re stressed, tired or hungry. Avoid busy shopping times and decide ahead which shops you’ll l visit. Better still, shop online so you can compare prices, avoid the crowds and organise delivery.
Track your purchases: As you spend, subtract the amount from your running festive season budget total. This will let you know how well you’re sticking to your budget and will make it easier to adjust between categories if needed.
A few other holiday saving tips include:
“Secret Santa can cut your spending considerably for groups of friends or family. Each person draws a name, and you buy a gift for that person only,” says Sarah.
“You can also entertain at home rather than eating out. Everyone else is probably watching their budgets too and will be happy to contribute.
“Always add a few extra presents to your shopping list as you’ll probably receive a surprise gift or forget to buy for someone. These should be generic. This way you’ll avoid dashing into a crowded mall and overspending on something expensive.”
Sarah also advises using apps and other handy tools to budget and track spending. Splitwise, for example, allows you to add as many people as you want. The app will divide the bill equally, and you can email your friends the amount they owe you. It also reminds you to pay your own debt. The app will notify you when the members of the group pay up or when the expenses are edited or deleted.
“Some careful planning now will take the pressure off your wallet later. You can come back from your break with fewer worries and can start saving for your next holiday instead of spending the next few months paying off debt,” says Sarah.
Tip: If your friends are over-indebted, advise them to get in touch with a debt counsellor for a free debt assessment. All they have to do is fill in this form and they will get an obligation-free call back.
Justmoney is a personal finance website that provides busy, digitally savvy South Africans with easy, free access to financial information, services, and products.