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Don’t Get Wrapped Up In Holiday Spending

December is a time when people tend to spend more due to the summer holidays, the festive season, travelling, driving long distances and for those who prefer to stay at home, taking the go-slow to do some DIY around the house. Being financially prepared is vital as holiday expenses add up and can easily leave you in an awkward position in January, the “longest month of the year”.

The South African economy is taking strain. This is reflected in the findings of the 8th Momentum/Unisa Household Financial Wellness Index; only 25% of South African households are financially well: they can afford their planned and unplanned expenses, now and in the future. The research also shows that behaviour is the most critical component of financial success.

Various macro-economic factors affect the financial wellness of South African households, including political decisions and economic events that influence exchange rates, price inflation, interest rates, employment and cost of living, to name a few.

Individual financial activities and behaviours can soften the blow and enable households to become financially stable during trying times. Jeanette Marais, CEO of Momentum Investments, has the following tips to help you get through December and effectively manage your finances:


A financial strategy enables you to take control of your spending and has many long-term benefits. Such a strategy should include living within your means, curbing your debt and having attainable long- and short-term financial goals. If you start this December, make sure that you include gifts, fuel, holiday activities and any other unplanned expenses into your budget. In doing so, you can ensure that you only spend what you have and not in January, when you look at your bank statement, wonder where your money has gone.

Reduce your debt

In South Africa, immediate gratification and living on credit is not unusual. TransUnion’s South African Consumer Credit Index shows that consumer credit health is deteriorating and consumer stress is on the rise.

According to Marais, “Most South Africans find themselves tangled up in various debt traps owing to a lack of financial education. They are enticed into buying things that they think will uplift their wellbeing without fully understanding the consequences.”

There are different types of debt. Borrowing money to buy an affordable house or pay a student loan is considered good debt as it generally bears low interest. Bad debt is short-term debt used to acquire non-essential items like an expensive car, clothes, furniture and household appliances. Paying for a holiday or extravagant gifts with your credit card will end up costing you double with the interest you incur. The best way to make the festive season affordable is to make it part of your financial planning and saving for it throughout the year.


Saving is a critical component of any financial strategy. Attainable long-, medium and short-term saving goals means one is more likely to achieve them. A good plan underpins any savings strategy. If you are planning a trip, find out how much it will cost and look at the different savings products available to help you achieve your goals.

According to Marais, “Each individual’s investment journey is unique. Various investment options with different risk profiles are available, so you are bound to find one that best suits your needs. Whether it is to save for a holiday, nest egg, renovations or even your children’s education, a qualified financial adviser can assist with a savings strategy and guidance on how you can benefit from compound interest and, where applicable, use tax incentives to minimise the effect of tax on your investments.”

Marais, concludes “To avoid getting wrapped up in holiday spending, go in with a solid plan, stay focused and only spend what you can afford. You can even give yourself and your loved ones the gift of investing and saving rather than spending. Not only will you reap the benefits at the end of the set term, but if you have children, you will also teach them the benefits of saving and working towards a goal.”