As the year draws to a close, most of us are looking forward to taking a break to recharge, spending valuable time with family and friends and rewarding ourselves after a year of hard work. While w all deserve to let our hair down, it is essential to keep financial fitness principles on the radar even during this time.
Notably, 2014 has presented its fair share of socio-economic challenges, such as rising levels of debt and new interest rate hikes after their lowest levels in 30 years. This, together with increased pressures from rising costs of electricity, food and transport among other obligations, makes it more enormous for consumers who are already cash strapped.
With the Consumer Financial Vulnerability Index for Q3 2014 revealing that approximately 73.1% of South African consumers felt either financially vulnerable or financially exposed based on their cash flow, it is critical that they take proactive steps this festive season to keep their finances in check going into 2015.
Justin Bradshaw: Head of Personal Financial Management at Nedbank notes that the festive season can also present anxiety if money worries arise. ‘For those who have the privilege of receiving a 13th cheque or bonus during this period, you have an opportunity to pay off or pay in advance, existing debt to reduce the balance owing or monthly instalments – better yet, put a portion amount (at least 10% of your income) away towards savings.’
Bradshaw also advises consumers to register for MyFinancialLife™, a personal financial management tool which makes it easy for consumers to manage their finances and achieve their aspirations. ‘MyFinancialLife™ assists you to manage your day to day financial management, save and track how well you are doing against your goals. It also analyses spending habits and shows you where you may be wasting money – that way you, it also empowers you to fix it before it’s too late,’ said Justin.
To encourage the youth to save and be savvy with their money, MyMoneyMap™, an allowance management tool, is aimed at empowering kids and teens to build financial fitness from an early age – working with their parents.
Simple steps to keep you financially fit this festive season:
Assess your financial obligations:
Firstly, assess your fixed financial obligations and then write down what you are likely to spend during this period. It is easy to draw up a budget for the holiday season, but unless you are realistic from the outset on what your expenses are, you will most likely overspend. More importantly, always keep in mind that salaries are paid earlier in December, meaning that there is a longer stretch to the next pay cheque. Furthermore, 2015 come with new prospects and renewed set of new obligations such as back to school expenses if you are a parent.
Keep your budgetary priorities on your radar:
Once you have a clear assessment of your financial commitments and remaining allowance for social activities, or to spoil your loved ones, ensure to keep your budgetary priorities firmly on that list, keeping in mind unforeseen circumstances.
Spending on Christmas gifts:
Make a list of family members and/or friends you plan to buy Christmas gifts for. Once you have compiled the list, allocate an allowance to each person based on the identified budget. Is money is tight, it is okay to send them a festive message to express your gratitude and love for them.
Plan with the end in mind:
If you plan ahead, you can spread the cost of holiday shopping over November and December, ensuring that you don’t get caught up in the last-minute frenzy of Christmas shopping. This often causes one to cave in and blow the budget out of sheer desperation to find the right present.
MyFinancialLife™ and MyMoneyMap™ are first to market in South Africa and available to both Nedbank and non-Nedbank clients for free and can be accessed via www.nedbank.co.za
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