The Average Consumer Holiday Spending and How to Stay Out of Debt

Another year is almost done, and although we are ready to start festivities, it seems like we still need to keep a tight rein on our finances. 

Despite the pandemic, South Africans spent on average R5 673 during the holiday season during 2020, and that’s excluding their usual monthly expenses. That’s more than a third of the average South African take-home pay. It is essential that we budget before spending our money during the holiday season to avoid making unnecessary debt. 

According to Wonga’s 2020 Festive Spending Survey, 50% of respondents claimed that they relied on their thirteenth cheque or end-of-year bonus to help cope with festive season expenses. And almost 20% of respondents said that they would need to borrow money from a creditor to help fund the extra expenses. 

It is concerning that we as South Africans rely so heavily on a thirteenth cheque or end-of-year bonus to help cover financial costs during this time. For those of us who don’t receive these year-end benefits, often credit is the only way to fund the expenses that this time of year brings. And unfortunately, that leaves many of us in a worse financial position when January comes round. 

Here are 5 tips to help you control your spending this holiday season. 

1. Plan before you act 

It’s always difficult buying gifts for friends and family and planning to get away with the family. It becomes expensive very quickly. And it’s even more difficult when you’re struggling financially. 

To help you stay within your budget, plan your holiday and gifts ahead of time. 

Make a list of people you would like to purchase gifts for and how much you can spend on each person. Once you have your list, stick to that budget! 

If you plan on going away with family or friends for a few days, check your financial situation first and plan your trip around the money you currently have. 

2. Use cash as much as possible 

It’s fair to say many of us learnt the value of money over the past 2 years. Swiping a credit card may be convenient, but making more debt has its consequences. 

To help you stay out of debt, try making all your payments this holiday season in cash. That doesn’t mean spending physical cash, but using the money you have available to you.

Sticking to cash will prevent you from making unnecessary debt.

3. Trade in memories, not gifts 

When you’re on a tight budget there’s no reason for you to splurge on expensive gifts and holidays trips. Instead focus your holiday season on making memories with your loved ones.

Giving gifts that are an experience or have greater sentimental value than material items would serve you better financially and spiritually. 

4. Rethink those ‘holiday deals’

The holiday season means big business for retailers and the travel industry. Many retailers will inflate their prices during this time of year, so do your research when you come across a ‘good deal’. If you do believe it is a good deal, consider whether you really need it. And search for cheaper options available. 

If you really want to trade gifts, try and make something yourself. It is the thought that counts and not the actual gift. This will help you save money on the “good deals” the retailers put out there.

5. Keep track of your spending 

To keep your spending under control, track your expenses throughout the holiday season. Keep a record of what you’re spending and calculate how much money you have leftover for the rest of the holiday season. 

Keeping track of your expenses will help you stay within your budget. If you’re in a tight financial situation avoid reaching for that credit card. 

Debt Rescue is the #1 debt counsellor in South Africa. We have helped thousands of consumers take control of their finances through the debt review process. Debt review will help you reduce your monthly debt repayments and help make monthly household expenses more affordable. 

If you’re over-indebted, contact us today. We can help you.

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