Smart spending: Festive season money hacks

The festive season is a time of togetherness and celebration, but the pressure to overspend on gifts and gatherings can cause tremendous financial stress.

We recommend some helpful hacks to help you navigate the holidays without breaking the bank.

Tip: To reduce your debt and free up cash over the festive season, consider debt consolidation.

Plan for unavoidable expenses

November and December can dent your budget dramatically, as you plan for end-of-year parties and functions, family holidays, gifts, and other commitments.

To make life easier, draw up a list of your fixed expenses, such as debit orders and school fees, and any irregular costs that may arise, and allocate funds accordingly, suggests Farzana Botha, segment marketing manager at Sanlam.

“Expect some trade-offs – you may not be able to host your family or go out to eat as often as you’d like,” she cautions.

Consider clever financial strategies

Botha recommends using reward programmes to stretch your money that little bit further.

“Sanlam Reality’s Entertainer app, for example, offers two-for-one deals, and discounts at selected restaurants, spas, and more,” she says.

If your funds are particularly thin, consider taking a holiday job, monetising a hobby, or selling some household items you no longer need.

Hayley Parry, a money coach and facilitator at 1Life’s Truth About Money initiative, says, “Whether you bake children’s birthday cakes or ‘declutter’ your debit orders, there are steps you can take to alter your financial circumstances.”

Make your savings work for you

If you’ve started putting money away, make sure it works hard for you, advises Johann Rossouw, associate financial planner at Fiscal Private Client Services.

“You’ll need to access these funds in the short term, so they can’t be exposed to too much market volatility. This rules out investing in the stock market and cryptocurrency,” he says.

“For example, if you need R10,000 for the December of your dreams and you invest that amount in stocks, you’ll be left with only R8,000 if the value drops by 20%.”

Rossouw recommends stashing your extra cash in an easily accessible account with a competitive interest rate, such as a current account or money market fund.

Delay in order to save - and do-it-yourself

If your family can’t afford the gifts or experiences they want right now, don’t despair. “You don’t have to deny yourself what you want, but you may have to delay gratification,” says Parry.

“Start setting aside cash for a treat, or for a holiday you can take out of season, or next year. Getting into debt for something transient only leads to stress and regret.”

If you really want a trip away, consider a house swap with friends in another part of the country.

When it comes to gifting, affordable ideas include handmade “vouchers” for quality time with parents or siblings, playing “secret Santa” with your family and setting a limit of R150 per gift, or planning a family outing volunteering at a charity of your choice.

Avoid bad debt

Avoid paying for holidays, gifts, and other nice-to-haves on credit, advises Rossouw.

“Credit cards, store cards, and personal loans may get you something you want, but when used for luxuries, they do nothing to improve your financial situation.”  

Don’t cancel your insurance

Don’t be tempted to cut insurance so you can have more cash in hand this festive season – the consequences could be dire, warns Parry.

“Rather reduce your cover to what you can afford. Insurance provides a buffer so you don’t have to rely on savings or credit in an emergency, thereby protecting you and your loved ones.”

Adapt your money behaviour

Adopt better financial habits by learning more about money. 1Life’s free financial course, Truth About Money, helps you make your money last.

Tip: Learning how to budget? Use this handy calculator to determine your disposable income.