Black Friday has come and gone and many consumers took part in the hype of the nationwide sales last week. With deals promising discounts of up to 80% and more, they’re often difficult to ignore. If you’ve been on the lookout for a new tv or fridge and managed to save thousands of rands on something you were going to buy anyways, you’ve done it right. Next comes the festive season and all the
Buying Unnecessary Items On Credit Can Leave You Feeling The Pressure
What about all those unnecessary and luxury items that were impulse purchases? Many of these items would’ve been bought on credit. Using debt to fund these types of expenses is risky business and can leave many in a tricky situation.
Paying with a credit card or loan is fast and easy and in some cases may not feel as though you’re spending actual money. The after effects, however, became reality when monthly installments are due and become yet another line item in your budget. Having too much debt can also negatively affect your credit score.
Below from News24:
“A plan helps you get a better idea of how much you can spend over the holiday period. You can also see how much you will need to keep for January – especially because there is a big gap between December and January paydays.”
This advice is given by Vera Nagtegaal, executive head of the insurance site Hippo.co.za, in a press release.
She believes consumers need to tighten their purse strings and have a plan in place to avoid financial pitfalls.
Plan Accordingly This Festive Season
With Christmas, New Years and other festive holidays around the corner, people are planning holidays and events. Often, these extra gifts and expenses are not accounted for. All of sudden it is mid-December and the bank account is looking a bit dry.
While budgeting is important, consumers must also keep a close eye on any spending using a credit card – especially if it is unplanned.
According to Nagtegaal, data of the National Credit Regulator shows that the value of credit granted tends to spike in the last three months of the year, and tapers off in the first quarter.
The types of debt that tend to increase in this period are unsecured credit agreements, credit card debt and short-term credit.
Here are a few tips to help you make it through the December and January holidays:
- Budget for extra expenditure
- It is not necessary to buy overly expensive gifts to try and impress those you love
- Have a family braai or dinner at home to save on the expensive costs of eating out
- Go to the park, beach or local promenade for a holiday activity
- Have a picnic instead of an expensive lunch
- Make sure you have enough money for your monthly debit orders to run
- Invest your year-end bonus or use it to settle debts
- Avoid going to the shops too often
What Can I Do If I Run Out Of Money?
If you find yourself running out of money towards the end of the year, try to avoid using debt to make it through. By using credit cards and loans, you’re only pushing the problem further down the road. Come January, your monthly debt repayments will be even higher. This puts you on the back foot at the start of 2019.
If you already have lots of debt and can’t afford your December installments, speak to a debt counsellor. A debt counsellor will be able to look at your debt profile and determine if you could benefit from a debt solution. If you are over-indebted, debt counseling can assist you by reducing monthly debt repayments, reducing interest and fees and providing you with legal protection.