The New Year: Avoiding the Debt Trap
Recovering from the financial strain of the festive season, you need to take time to organize your money with the goal of avoiding the debt trap. Returning from holiday is always a tough one, coming back to the real world, escaping the fantasy of endless holiday, this is a time that most South Africans don’t look forward to.
While the December/January stretch is jam packed, this festive season is not a reason to overspend. Getting into the full swing of the holidays, many will splash out over this time. Rather than cutting yourself short for the coming year, this should be the time to curb spending and aim for responsible solutions. While the times have been tough with financial stability, there are many ways to enjoy endless fun and family time without breaking the bank. All it takes is consideration and careful planning – the ins and outs of debt management.
Tips to avoid the debt trap
Holidays are not for spending
As much as we like to get carried away, December and January is the time to spend wisely. Often getting paid early in December, we forget that the money needs to last until the end of January. This money needs to last around 2 weeks longer than usual. Because of this, this holiday period is a time to spend wisely so you can start the year on a high note.
- Monthly requirements
Every month we are required to cover certain costs of living, be it rent, clothing or food. These are not to be sidelined this January due to over spending in the festive season. Getting your finances to where they need to be is of the utmost importance.
- Credit check before spending
Before you go on any type of spending spree coming into the New Year, first get a credit check. Sometimes we can get carried away and forget about the details, checking your score helps you get an idea of what sort of expenditure you can allow yourself.
- Debit not credit
Use your debit card when spending rather than your credit card for everyday purchases. Ensuring you don’t overextend yourself this season, stick to buying what you have cash for and save credit for when you really need something.
- Find sales
After every big holiday or season there are sales, and Christmas shows this more than any other. January is prime time. Post-Christmas is the perfect time to get your shopping done without ruining your finances.
There are endless ways to ensure you make your money last in 2018, responsible spending and financial management allows you to take hold of your financial freedom.