Festive overspending warning: Don’t fall into the trap
Debt experts warn West Rand residents to avoid the overspending trap this festive season.
The festive season can be testing for even financially disciplined consumers, and by the time residents return to work, many will have spent more than they can afford.
According to René Moonsamy, chairperson of the National Debt Counselling Association (NDCA), this overspending cycle repeats every year, with debt-counselling enquiries spiking each January and February.
She said key factors include aggressive retail marketing from Black Friday into the New Year, holiday-related spending, early December salary payments that must stretch until the end of January, and the lack of year-end bonuses due to a weak economy.
“Added to this, many households forget to budget for back-to-school costs and annual price increases that hit in January.
“By mid-January, many consumers find themselves borrowing just to get to payday. But with households already under pressure, these loans add long-term strain. One unexpected expense can push them into serious financial trouble,” Moonsamy warns.
The NDCA urges residents to plan and spend cautiously by:
* Budgeting early: Consider how long a mid-December salary must last and factor in January expenses before holiday spending.
* Ensuring debit orders are covered: Bounced debits hurt credit scores and attract penalties.
* Using bonuses wisely: Prioritise reducing debt, saving or investing before discretionary purchases.
* Borrowing responsibly: Only borrow for essentials and only from National Credit Regulator (NCR)-registered lenders. Avoid illegal lenders, unclear fees and inflating income to secure bigger loans.
* Keeping up repayments: Missing December instalments can take up to two years to recover from.
“If you can’t keep up, seek help from a registered debt counsellor sooner rather than later. Waiting too long can worsen your credit profile and even risk asset repossession,” Moonsamy concludes.
