I cannot believe we are in the last few days of 2023. Sjoe, It’s been a hectic year!
From international turmoil to the craziness in South Africa, in addition to load shedding and the ever-increasing cost of living, if you have made it this far, you should pat yourself on the back.
This will be my final column for this year, and I will return early in January – when most South Africans are flat broke (myself included), and in need of every little bit of financial advice we can find.
However, there are a few tidbits I want to leave you with before the year ends.
If you are lucky enough to be getting a bonus or 13th cheque, Ninety One’s Paul Hutchinson has some tips for your consideration:
Spoiling yourself
South Africans who are not drowning in debt can give themselves a treat for working hard over the years. But be careful about how much you spend.
A good rule of thumb is that you should be investing at least 10% of your monthly after-tax income.
Paying off short-term debt
This is the most expensive form of debt and should be contained as quickly as possible.
Personal loans, outstanding credit-card debt, and any store credit should thus be paid off.
And while you’re at it, make a New Year’s resolution not to take on any new short-term debt in 2024. Doing so will help to change your financial well-being.
Building an emergency fund
This fund is only used for times of crisis and not day-to-day living. An emergency fund will stop you from using expensive credit or long-term investments.
Targeting long-term debt
Use the additional funds to pay off long-term debt. This will reduce some of the pressure on your monthly financial situation, particularly if you have a home loan, as interest rates have increased materially over the past few years. Should you have an access home-loan facility, consider this additional contribution as part of your emergency fund.
Wikus Olivier, managing director at CreditSmart Financial Services, says that since the festive season is here, mense might feel the pressure to splurge on expensive goodies and once-in-a-lifetime deals.
However, he points out that it is time people embrace a money-mindful approach by saying no to festive overspending and yes to invaluable experiences – so that they can enjoy a worry-free and stress-free January.
Here are some of his handy festive season tips:
Christmas budget
Having a budget will give you an idea of your current financial position and help you allocate an amount you can spend during the festive period. Make sure that the money you allocate includes money you can spend on gifts, celebrations, travel expenses, etc.
Spending
Keep track of your spending and use an “envelope” or cash-only system to avoid racking up a big credit-card balance. Don’t forget also to make use of some of the savings you have gathered via your reward programmes, as this can lower your overall spending amount.
Gifts and spoils
By reducing the number of Christmas gifts you buy and instead getting creative and making a home made gift, you can save money for the necessities of January.
You can also encourage your family to take on a “Secret Santa” initiative so you can spoil one person within a spending limit instead of splurging on multiple gifts, or you can create a “gifts for kids only” rule.
Affordable meals and food considerations
You can plan and host a potluck get-together where your friends and family members bring their favourite dish, side, snack or dessert to the celebration occasion.
Home made decorations
No product that you buy in a store can match the creativity or uniqueness of Christmas and table decorations that you have created yourself; plus, this option will allow you to save money. Think of a Christmas-related theme or let your kids choose and then create decorations that go along with your theme.
The real meaning of the Christmas season
During this festive season, it is important that you stick to your “needs” and not “material wants” this Christmas period. If you want to spend something, spend time with your loved ones because joy is found in experiences.
No happy-go-lucky shopping outings and super expensive activities can replace the precious sit-down with friends and family, and create memories that will last you a lifetime.
And on that note, I wish you all the best of health and happiness over this festive season. May you and your loved ones be under the protection of the Almighty and may 2024 be all you wish it to be!
Be safe and God bless. And that’s a wrap!
dailyvoice@inl.co.za