THE temptation to splurge on big ticket items and non-essentials will be great this month.
However, it will be wiser to avoid wasteful expenditure in order to be able to comfortably meet serious financial obligations long after the festive season.
This is the advice from financial services provider Ithala SOC Limited which advocates saving through formal interest-bearing accounts as well as group saving schemes such as stokvels.
A stokvel is a saving or investment society to which members regularly contribute an agreed amount and from which they receive a lump sum payment.
A thriving stokvel community exists in South Africa and is becoming an increasingly popular mechanism of generating long-term wealth and savings.
It is estimated stokvels have a membership of 11 million people with a cumulative savings of R45bn.
‘Before splurging all your hard earned cash this silly season budget for priorities such as school fees, uniforms, renovations, groceries and emergency situations,’ said Ithala SOC Ltd Marketing and Communications Manager Sandile Xolo.
It is understandable that most people would want to spoil themselves after a long and challenging year. However, one must also caution against falling prey to emotional buying.
‘Lavish spending over the festive season leave people cash strapped,’ he said.
Xolo’s advice for Zululanders, ‘fixed deposit accounts enable individuals to deposit money for a stated period of time at a guaranteed fixed rate of interest. A key benefit is the higher your balance and longer the term, the higher the interest you will earn.
