Most of us will start the new year feeling like we have overindulged. Our bodies will show the effects of too many mince pies and festive drinking while our finances will be looking the worse for wear as we swiped our plastic one too many times.
Often the overspending and the resulting debt can make us feel so miserable that we tend to continue the eating and drinking spree, hoping to drown our sorrows. So for both our health and bank balances, let’s make 2009 the year we start with a healthy balance sheet.
According to Linda Smith, financial coach and author of Financial Freedom Abundance Diary, the key to surviving the festive season is to have a positive attitude and a plan of action. The plan will enable you to make informed decisions about what you can and cannot spend this holiday.
By having a healthy and positive attitude, you will find that sticking to your budget will give you a sense of control and achievement rather than a feeling of despondency that you couldn’t have it all. Smith says human nature is such that whether we have R10 000 or R50 000, we will always wish we had more money. Appreciating what you have is the first step to financial wellbeing and also reflects the spirit of this holiday season.
Gifts from the heart
The starting point is to get a handle on what this holiday is going to cost. Work out your entertainment needs, gifts and holiday expenses. “When you realise how much you need, you will most likely get a shock. We are used to just whipping out the credit card and spending without realising it,” says Smith.
If your spending expectations are more than you can afford, you need to draw up a list of priorities and that should start with gifts. There are better ways to express ones emotions than getting into debt.
“We need to stop and ask why we are buying these presents. This time of the year is about showing people that you love them and to be thankful. A card with the right words and a small gift can achieve that,” says Smith.
Families can sit down together and discuss how they want to manage gifts. For many people Christmas has become about presents and not about giving in the true sense. Having a family dinner and each person contributing something special to the meal will mean a great deal more than a last-minute grudge purchase. Smith says this is also a valuable exercise to do with your children. However, the focus should not be on not having enough money, but rather to appreciate what one already has. If your budget shows that you have R1 000 to spend this holiday, see that as a gift in itself, don’t turn it into an “if only” scenario.
How to pay for it
Smith says a plan will also help you work out where you will find money to pay for the things you need. You may want to use some of your end-of-year bonus to pay for the holiday.
While paying off debt is always a good plan, Smith says we also need to feel that we have done something for ourselves, so putting a portion of one’s bonus towards having a good time would be a good way to spend some of the extra cash.
The temptation is always there to use our store cards or credit cards rather than to cut back a bit, but the joy of spending will be a distant memory when the first set of bills arrive. Smith advises going on a cash diet where you draw just enough money to pay for each expense, be it groceries, gifts or entertainment. You will have a better sense of what you are spending.
People tend to spend more when there is a distance created by plastic cards between the cash and the purchase. “Walking the harder path now will mean that you start the new year feeling much better about yourself,” says Smith.
When facing your financial situation, you need to stay positive. Most of us have debt, but rather than feeling desperate, put a plan in place and focus on the fact that you have a payment plan, which will see you debt-free by a certain date. Smith says you would be surprised how often you can actually find the money to meet your needs.
“If you really need the money, it will often be provided. You may receive an unexpected tax refund or find something you can sell. But, to tell the universe you need the money, you need to know how much you need and that starts with a plan.” Of course, this doesn’t work if you are just spending and not honouring yourself by cutting back and making what money you do have work for you. Smith strongly believes that if money is coming in, it is your job to save a portion of it. We all feel better if we are financially secure.
Plan for next year
Set yourself these two new year’s resolutions. First, save a reasonable amount each week to put towards next year’s December holidays. Just saving R50 a week will give you R2 500 for next year’s holiday budget. Second, start a financial diary. The Financial Freedom Abundance Diary has a spending plan and counting sheet for day-to-day spending and each month focuses on a specific area of personal finance. To find out more, go to www.financial-freedom.co.za.
Make your property safe
Santam supplies a few tips on securing property prior to going on holiday
It is important to maintain a “lived-in” appearance. Overflowing rubbish bins and mailboxes, newspapers and other regular deliveries piled up in front of a house are a sure sign that the house is vacant.
o Make sure your mail is collected by a neighbour or held at the post office.
o Cancel all deliveries and try to get a neighbour to clear your mailbox regularly.
o Ask your neighbour to put your rubbish bin out for collection at the usual time or lock it away in a garage.
o Arrange to keep pathways free of papers and other debris and ask neighbours not to inform callers that you are away on leave.
o Turn the volume down on your telephone to ensure that unanswered telephone calls do not alert others to the fact that nobody is home.
It’s usually a good idea to leave some lights on, as well as a television or radio, to give the impression that someone is at home — even during the day. Invest in external floodlighting that is linked to a passive infra-red detector that automatically activates lights when someone enters its field of vision.
Securing your home
o It is easy and cheap to fit locks to your windows, which is where most burglars gain access.
o Good quality steel security doors at your entrances will help too.
o Fit security deadlocks to your main exit doors.
o Make sure that your most valuable possessions are stored in the most secure area or room in your home, or placed in a safe at your local bank.
o Ensure all tools are locked away in the garden shed or garage.
o Ladders, wheelie bins and large items can give easy access to the roof, so don’t leave these lying around.