Avoid new year financial stress

The upcoming silly season often comes with costly obligations and extra expenses, but as economic conditions remain challenging, consumers are urged not to get caught up in the festivities and waste their hard earned money.

This is according to Henry van Deventer of acsis, a leading financial services company, who says it is vital that consumers budget wisely this festive season in order to prevent starting  2013 with unnecessary bills and debt.

Van Deventer says that 2012 has been a tough year for consumers and many households have felt the financial pressure. “While recent reports, such as TransUnion’s SA Consumer Credit Index (CCI), reveal how consumer credit health has stabilised in the fourth quarter of 2012 and that household cash flow on the whole remains positive, healthy credit and household cash flow continues to be on-going battle for consumers, due to rising day-to-day costs and bills. All of these factors ultimately affect disposable income and monthly budgets.”

Van Deventer warns that it is important that consumers don’t fall even deeper into the debt trap by obtaining further unsecured loans this holiday season in order to fund year end activities and shopping excursions. “Consumers should carefully assess their planned expenditure for this period in order to avoid starting next year with unplanned debt.

Van Deventer says that debt is often a continually-worsening spiral that consumers cannot control and then get stuck in. “Once in it, escaping the vicious cycle of debt can be daunting. It is thus better to avoid the situation completely.”

Jason Bernic, financial planning coach at acsis offers consumers some budgeting tips for this festive season:

–          Your lifestyles should rely on your salary only. If you receive a bonus, enjoy some of it, but save most of it;

–          Spend money you have, not credit you have;

–          Increase your debt repayments in line with your salary increase;

–          Plan holidays far in advance. Christmas is a very expensive time and last-minute holiday planning can be costly, never mind scarce;

–          Focus on family activities instead of going to the mall;

–          Agree on a family budget for gifts;

–          Avoid temptation and resist ‘sale’ signs – ask yourself whether you really need it;

–          Budget for next year’s expenses e.g. school fees. Also, where possible, pay annual premiums – you’ll often find that you get a significant discount.


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