The end of year holiday season is not a surprise so let’s not treat it like an emergency that will destabilise us financially come January.
It comes by every year, and so it is totally possible to plan it so that it does not leave you out of pocket.
If, however, you have not planned and you are now facing the possibility of a dry start to 2018, here are five ways to help you mitigate that while still having fun in December.
You don’t have to do it all. There are many demands being made on your time and money at this time of year, but you cannot please everybody.
You do not need to go for every party, buy everyone gifts, or host everyone. Sometimes we do more than we should because we want to fit in. This is unnecessary.
To counter it, list all the things you think you want to do, and then prioritise.
Ask yourself why you want to do those things: Do they add value or are you just doing them to fit in with your peers? Eliminate those that are not that important.
Remember, nothing good comes out of spending money trying to prove something to someone else.
Know what you cannot afford. It is OK to not be able to afford it. There is nothing wrong with you if you cannot afford it today. It does not mean you will never be able to do it; you just can’t do it now.
You will know you cannot afford it if it will eat into funds set aside for important items such as rent or school fees. Remember, just because the money is sitting in your account does not mean you can afford it.
If it leaves you in debt, you cannot afford it. If you feel you have to borrow for it, don’t do it. If you want to afford it next year, start saving for it in January.
Celebrate within your means. If you had already saved up for your planned holiday, party or events, do go ahead and enjoy them. If not, then plan a holiday budget with the money you currently have.
The purpose of this budget is to track where your money is going rather than waking up broke in January.
Write down what you would like to do and how much it will cost. If it is more than you can afford, cut it down or be clever with managing expenses.
For example, do a pot luck where people bring food and drinks rather than cater for the expense of an entire party. Take the train rather than taking a flight.
Hire a holiday house rather than a hotel. Cook at home for Christmas rather than go for over-priced lunches at hotels, etc.
Pay bills in advance. Any money that is not for holiday spending should be moved out of your current account. If possible pay for the December and January basic expenses in advance.
Most people get paid early in December so they may have a lot of money sitting in the account, which leads to the false belief that there is money to spend.
The balances look very healthy. However, the next pay day will be at the end of January.
Do your food shopping for the next two months. Pay rent, electricity, water, school fees, car insurance etc. Imagine you had no money in January; what would still need to have been taken care of? Sort that out before you start spending any money.
Waceke runs a programme on personal finance. To sign up, email her at [email protected]| Facebook/centonomy or go to www.centonomy.com