How to be frugal in the festive season
Categories: Financial wellness
Tags: Managing your Money
It was a tough year for all of us, but one important job remains to be done before you can dive into December: your festive season budget. Invest the time now and save yourself the post-holiday money blues.
No matter how old you are, December in South Africa feels like a holiday, like throwing your schoolbag in a dark corner of your room and with it all the worries and challenges of the previous 11 months.
However, unlike that teenager, the adult-you is the only one who can deal with the realities that arrive when the holidays are over – especially those to do with money and balancing the budget.
The best way to avoid a post-December headache is to do a pre-December budget. And no, drawing up and sticking to a budget is not as difficult as going back to school.
Start with a plan
The starting point for your festive season budget is your mindset. Especially during holidays, a budget can feel like a thing that spoils the fun, but the opposite is actually true: a budget is there to keep the fun going by helping you to not run out of money through reckless and unnecessary spending. Your budget really is your friend.
When you think about a budget as nothing more than a plan to spend your money, it becomes a useful tool rather than a restriction. Here is how to use it:
- Before you even look at the money you have available, draw up a plan for your holiday and/or festive season celebrations and activities. A vague idea to have as much fun as possible is no use when it comes to planning your spending, so take 30 minutes or so to really think about what you’d like to do and experience this December. If you have a spouse, partner or children, involve them too.
- Now look at the money you have available for non-routine spending. But wait – how do you know what that amount is? The answer is your budget. If you have a budget planner that you use every month, it will be easy to know how much you have available for holiday spending. If not, you have to make a list of all the have-to’s – the bills you have to pay and the things you have to buy (like food, electricity and loan repayments) to get through the month. When you have that amount, you subtract it from your total income for December. The balance is – in theory – what you have to spend on holiday fun.
- Before you turn your mind to your holiday list, remember that January is around the corner. Have you made provision for back-to-school expenses, for example? Remember that your December salary – which is often paid early – has to stretch all the way to the end of January.
- Now it’s time to look at the fun list. Chances are that your list will be longer than the money you have available. You can deal with this in two ways: cut back on your holiday plans or find savings in your budgeted expenses. A budget calculator can be a very handy tool for this exercise:
- You might find, for instance, that it is possible to put some of your subscriptions on hold for the time you will be away from home.
- Rethink outings and combine trips to save on fuel and parking costs.
- Plan your meals a few days in advance so that you only have to go shopping once, only buy the ingredients you need, and use everything you buy.
- Drink more water and less soft drinks.
- Always compare prices to make sure you get the best value for your money.
- Do your own nails and skincare. Even if you buy salon products but do the treatments yourself at home, you are bound to save a bundle.
- Instead of buying something the moment you see it, stop and ask yourself whether you need it or only want it. If you really need it, wait one full day before you buy it, just to make sure.
- Check your receipts to make sure you were charged correctly. Also keep those receipts so that you can track your spending and, if necessary, can return items to the store.
- In terms of trimming down the holiday budget, consider a picnic in the park instead of a restaurant meal, or joining forces with a friend or family member to do bulk food preparation.
- Gifts are a huge money guzzler, and you can often save a lot by thinking about them differently. Focus on experiences rather than things, or agree with your loved ones on a limit per person.
- Use these savings opportunities to adjust both your budget and your holiday list to give a new, and more accurate picture of your finances.
- Track your spending throughout the month so that you always know what your money situation is. If you overspend on one day, it is easy to cut back until you are back on track. And if you show a saving, it can either be spent on a treat or, better still, help you to clear debt quicker or boost your January savings.
Give yourself the best gift this December, which is spending with a plan. Use the Bayport budget tool to help you manage your money.