Knowing how to navigate your way this festive season by avoiding impulse purchases and financial commitments that will leave your finances stretched will have your future self thanking you. Here is what you need to know.

Before we start

This is a general guideline that we have put together to help you start your journey of financially planning your future and should not be taken as financial advice.

Curb unplanned purchases

2021 has been a financially challenging year for most South Africans. While tightening a budget and scaling back on expenses is something that some people consider to give more breathing room, it can come undone by unexpected costs. These tend to increase over the festive season when most of us tend to be more relaxed and in a good mood. However, if you are not careful, it can eventually add up.

It can also blow holes in financial safety nets you have set in place such as savings that you plan to use in the following month. According to a survey conducted by FNB, 80% of middle-income customers have limited or no savings to protect them from an emergency they could face. Be prepared by setting a budget, tracking your spending and avoiding impulse purchases.

Making smart moves

Travel, food and gifts are some of the largest expenses that you are going to face over festive season. However, an expensive mistake you will have on your hands come January is not planning.

The holiday season sees 76% of South Africans spending more, with travelling and food taking up 37% of budgets. One way to manoeuvring around making your holiday affordable and avoid spending more than you intend to is planning in advance.

Travelling during off-peak season or carpooling whenever travelling to places to eat out can cut on fuel costs. Carrying cash where possible can reduce the chances of you stepping outside your budget. Make sure that you have your cash stored in a safe place. Saying no to yourself and loved ones can be difficult, but if it is something that you have not planned for financially, it will be something you will have to do.

Avoid taking on more debt

A small loan here, a contract there and a lay-bye there could set you off on the wrong foot when the new year comes. It is tempting to believe that you will have it paid off in no time. Even if you could, it can create a space within your finances where you are constantly playing catch-up instead of creating more breathing room for your finances. A golden rule to stick by is to wait 48 hours before taking out a loan or making a purchase on credit to see if you really need it. The aim should always be to reduce debt instead of taking on more, especially during the festive season when it is tempting to do so.