During the holidays, especially the festive season, people tend to overspend, leaving them in the red in January.

The Polokwane Observer spoke to DW Schoeman, a certified financial planner at Daan Schoeman Financial Planning Solutions and a portfolio manager at Victory House Capital, on how to reduce the chances of overspending during the festive season.

“Overspending can be very easy, given the current economic climate we as South Africans are finding ourselves in now. The statistics on retirement show that a shockingly small percentage of us will be able to retire comfortably, which is only one of the events in life that serve as a reminder for us to save.”

To establish a new habit takes time, and December might be just the opportunity to cultivate a new one, says Schoeman.

“Start to build a strong foundation one small financial step at a time. December is always a time for reflection on the year that was and setting goals for the year to come. Many of us cannot wait for that well-deserved holiday but there are a few steps one can take to avoid those financial pitfalls. The most important is to keep up with any existing debt repayments. Missing one payment in December can cause serious financial constraints in the months after.”

He advises readers to set a budget for themselves and stick to it, remembering that January is not far off.

“Now might be a good time to sit down with your accredited financial adviser to review your life and short-term insurance portfolio. There might be that old cell phone or laptop on your home insurance that you no longer own but still pay premiums on. Also, look at your cell phone bill, are there old apps that you no longer use but keep paying annual subscriptions on? Now is the time to eliminate them, and those unnecessary in-app purchases that drive up your bill.”

While on holiday, avoid withdrawing cash from banks other than your own as these will incur high bank charges and in most instances, higher additional interest charges. Most retailers will have early special offers for Christmas gifts. It is a good idea to use these; now is an excellent time to use all those accumulated store rewards.

“Buying early will also save a lot of last-minute stress and time that can rather be spent with friends and loved ones. Adhering to these will in time establish that savings habit and will be the first steps to financial freedom.