Tips to help you manage festive season debt
Don’t wait for the New Year to tackle your 2017 debt.
Don’t wait for the New Year to tackle debt, manage your festive season spending and start 2018 financially fit.
“Every year we see an increase of about 28 per cent on credit card spending over the December period, but with careful planning and clever management of this inevitable increase in spending, you can enjoy your festive season without adding to your debt responsibilities,” encouraged Chris Labuschagne, CEO of FNB credit card.
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Here are a few tips to help you manage your holiday season spend:
• Understand your debt responsibilities:
Don’t sweep your debt responsibilities under the carpet until the New Year. Take time to plan your finances.
Make a note of all your repayment responsibilities such as your car, home loan and credit card repayments, and make these a priority.
Pay these as soon as your salary hits your account so that these are accounted for.
“Remember there are also other important expenses on the other side of the festive season, such as school fees,” said Labuschagne.
“Planning for education is vital, so ensure you have factored these into your budget.”
Once the big expenses are accounted for, ”stress test” your budget, which means if you are to add an additional 28 per cent to your credit card, will you be able to repay this and meet all your responsibilities in 2018?
• Use your rewards and value-adds to cut down on spending:
The festive season is the best time to take advantage of your rewards programme or to make use of any value adds that you have at your disposal.
“Now is the time to take full advantage of any alternative ways of paying for your holiday expenses, gifts and travel,” suggested Labuschagne.
“It’s well worth taking the time to discover additional benefits you can use to your advantage over the holiday period.
“Helpful features to check for include free travel insurance, access to local or international airport lounges, roadside assistance, or even a designated driver service that will get you home safely.”
• Track your spending:
One of the easiest ways to keep tabs on your spending is to swipe your card.
Not only is it more convenient and cheaper than cash, it also creates a transaction history that is easy to follow.
“If you use cash, it is unlikely that you will keep each slip for each of your purchases and you could, potentially, lose track of your festive season spending.
“However, if you swipe for every purchase, you will be able to log into one of the various electronic platforms and check your transaction history at any stage,” Labuschagne said.
At all times, you can trace money spent on your purchases through various electronic platforms like online banking, cellphone banking or an app.
This makes it very easy to track what you have spent on each purchase and to keep tally.
• If you don’t use it – lose it:
If you are sitting with a large credit limit that you are not utilising, request a limit decrease from your bank; it’s easy to reverse and will ensure that you are not tempted to over-spend.
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