Tis the season to be jolly…well almost if the shop decorations are to be believed. And I have also had two calls from people looking for advice re magazine articles they are writing for January editions on “how to avoid over-indulging” during the month of December. So perhaps it is fitting to start thinking about it and planning now before it is too late.
One of the biggest issues we face is the length of time between the November, December and January pay cheques – traditionally the December payment comes mid-way through December, 15-20 days after the November salary. About 45 days later (after the longest month in the year) the January salary arrives…only problem is that because of the usual December over-spend, January’s salary already has its hat and coat on by the time it arrives.
So what could you do differently this year?
Plan ahead…I know it’s boring and not really the stuff of exciting articles but then again, as with most financial issues and indeed with life, it is mostly about common sense. Since you know that there will 2 salaries within 20 days and then a further 45 days between the next pay cheques, put aside some (most) of the January salary in a savings account. Plan your Christmas/holiday spend and put the rest into a savings account for January (Capitec bank will give you 7% interest on amounts under R10000, else use a money market unit trust for this purpose). And a really good thing about a separate account is that old “out of sight” principle.
One of the people I spoke to also had a great idea about creating a “December-fund”. This would be money that you put aside each month so that you can spend it in December – much like creating your own 13th cheque. Again, an account like Capitec would work really well for this – at R200 pm you would have an additional R2200 to spend if you started in Jan.
On top of this, in the same way that we are advised never to go food shopping on an empty stomach, you should also not go Christmas shopping without a list/plan…the temptations are just too great and there are too many “cute” things that just have to be bought (for someone). So make a list and better still, if finances are tight (and they are for many people) then chat to family and friends and either agree to limit what you spend per present or maybe agree to put all the names of people attending your Christmas function into a hat and then each draw one name and buy one present. That way you could buy a really nice gift but also spend a whole lot less.
It is probably also a good time to sit down and review your budget as you think ahead to creating/setting New Year’s resolutions. And one of the areas that you can really save on is bank fees – if you are paying more than R70-80 per month then you are over paying. A simple change of bank could result in a saving of more than R1000 in a year (that’s half of your December fund).
