Focus on saving for the future this festive season

The temptation to over spend in December and January is pretty hard to control, but this desire really needs to be managed or it can lead to future problems through robbing from the future to pay for the present and past financial indiscretions.

 

For those fortunate enough to be receiving a bonus or a 13th cheque, it’s sensible to use this windfall as effectively as possible. This doesn’t mean you shouldn’t have fun with some of it, but it does mean you should not be "blowing” it all and then wondering later where it went.

 

The fact is that it is very easy to get too caught up in the festive season’s celebrations. It takes some serious discipline, resolve and delayed gratification appreciation to focus on putting extra money to good use to safeguard your future.

 

There are many avenues one can pursue when it comes to adding to one’s savings – it could be through unit trusts or ETFs, it could be through an education plan for your children or grandchildren, it could be saving towards a specific goal, or it could be towards beefing up your retirement savings. Paying down bonds and other accumulated debt is also part of a savings plan as it helps to free up capital.

 

What is also important to realise is that everyone should have a "rainy day” fund that can be easily accessed in case of an urgent need for funds – ideally, this should contain the equivalent of three to six months’ income in it.

 

Importantly, apart from having some sort of savings strategy, limiting debt is a big factor, especially at the end of one year and the beginning of another year. Building up credit card and other loan debt as a result of having too much fun during the festive season could cause you cash flow problems in early 2014, so think before you spend.

 

Having a budget for the "silly season” is a very good idea, limiting your spending to a certain amount for a holiday, gifts, parties etc. Then you can plan ahead to next year for items such as school and university fees, other holidays, cars, home improvements and the like.

 

But first – and not last – you must quarantine what you can afford to save. Get it working for you as soon as possible and keep it out of immediate reach. By saving whatever the amount you can afford, you are paying yourself and rewarding yourself, rather than stealing from tomorrow to pay for now.

 

One of Stephen Covey’s famous "habits” is beginning with the end in mind – saving is very much driven by having an idea about what you want to achieve. However, saving without a specific goal is still a heck of a lot better than spending recklessly.

 

Significantly, in today’s technologically advanced world, there are abundant opportunities to save in an ad hoc fashion and on a regular basis. You just have to take the plunge in the knowledge that you are doing the right thing for yourself - and your family!

 

So, this festive season, have fun, but give yourself a precious gift – money saved and invested for the future. You can only be glad that you did.