You might be ready for December but are your finances? The harsh reality is that most South Africans are living hand to mouth and can not even save.
Those who can are looking at a mountain of personal responsibilities that demand cash amid steep price hikes, inflation and looming recession.
The holiday season can be financially stressful as there is more food that people have to buy, more travel expenses, and other costs.
According to the annual Summer Spending survey by Wonga, South Africans will spend more than R226 billion this festive season. This will be an 11% less than the spend in 2021.
The survey was conducted on over 8 500 individuals in the country who shared what they would splash out on during the holidays.
‘’Our survey revealed that almost a third of people think they’ll spend less this festive season. The decrease in predicted spend overall is significant and the figures this year reflect the impact of the rise in inflation,’’ said Wonga marketing head, James Williams, in a statement.
Food and drinks will account for 35% of the festive season’s shopping. while 17% will be for travelling. Investment manager at Luthuli Capital, Mduduzi Luthuli said that the simplest way to make your salary last longer is to make it more difficult to waste it.
Here is how you can curb the festive spending according to the financial expert:
Be more strict with your spending
You must create spending barriers. These barriers act as nudges for improving your financial behaviour and thus are easy to implement and sustain.
A “nudge” is a small aid that leads people to adopt a desired behaviour. The underlying idea is that small cues or changes in our environment can have a major impact on our choices and behaviour.
Make a cash diet
The cash diet concept is fairly simple: instead of using credit cards or payment apps to make purchases, use cash.
Swiping your debit or credit card is simple; however, because you cannot see what you are spending, it can feel as if you are not spending your own money.
Be cautious of digital transactions
Some purchases, such as online shopping, necessitate the use of digital transactions rather than cash. This is fine, as long as you remain mindful of those expenses, and track them like you would a cash transaction.
“It Is easy in our digital world to get caught up in swiping the card and not even realise what you’re spending. Even with a budget, there can be a disconnect between seeing the numbers on a spreadsheet getting smaller versus watching the actual cash disappear,’’ said Luthuli.
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