Beat the financial hangover this festive season

The festive season is fast approaching and while the current economic climate may keep consumer’s purse strings a little shorter, this time of year can often lead to the feeling of a ‘financial hangover’ when the New Year comes round.

According to Gillian Buchanan, Corporate Communications Manager Sub Saharan Africa at Visa, “The holiday season is a time of heightened emotions. Most people spend their time sharing love and laughter with family and friends, which often leads to overindulgence at more places than just the dinner table. Very few people are able to resist the temptation of treating and spoiling a loved one or even themselves, which in turn leads to a lot of unplanned expenditure.”

While the best way to eliminate New Year debt is not to have incurred it in the first place, Buchanan suggests some simple tips to reduce arrears and ensure consumers are able to survive the first few months of 2009 without a financial hangover.

1. Plan ahead. Before spending all your money, ensure that you’ve saved some money throughout the year for all those unexpected or expected expenses that may arise over the festive season. In future try and start buying Christmas presents a few months in advance as this will assist with financial pressures.
2. Define a budget and stick to it. According to reports from the Deloitte 2008 year-end holiday survey; for the first time the majority of respondents intend to maintain control over their spending, with 64% of South Africans intending to budget his or her year-end shopping, compared to a mere 34% of South Africans a year ago.

So join this statistic and set a limit on how much you are going to spend on the different areas of expenditure (food, presents, entertainment etc) and don’t let the season to be jolly affect the planning.

3. Shopping spree. Write a list of everyone you need to buy presents for over the festive season. Work out how much you want to spend on each person, and make sure the total is not more than what your budget allows. Use your Visa credit of debit card to make all these purchases – it is more convenient, safer and you will be able to keep track of your spending with receipts and statements. Not to mention saving time avoiding long ATM queues.
4. Block out time to shop. The easiest way to stick to your budget is to set aside specific times that you will go shopping and make sure that you finish it all in this time frame. Browsing leads to overbuying.
5. Make the most of your card. Pay directly with your Visa card. If you are travelling, remember to make use of pre-paid payment cards like Visa’s prepaid debit card option especially when travelling with children. Not only will this spare you constant requests for pocket money, but more importantly it can help you teach your children how to responsibly manage their money.

‘While there is no single solution to help consumers avoid financial overindulgence, these are some of the simple techniques that can be followed. The best advice is to know your financial limitations, draw up an action plan and then stick to it,” Buchanan concludes.