As the festive season approaches and economic confidence in South Africa rises due to recent interest rate cuts and reduced consumer inflation, major retailers are gearing up to attract shoppers. However, it’s crucial to remain vigilant about pricing and promotions this December to avoid unnecessary debt in the New Year.
Even though consumer interest is on the rise, shoppers should be wary of potential price manipulation tactics employed by retailers. Many stores utilize “loss leaders” during this holiday season—selling products at a slight loss to entice customers into making a purchase.
ADVERTISEMENT
CONTINUE READING BELOW
Retailers depend on strategies like loss leaders because they recognize that once consumers enter the store, there’s a strong chance they will add unplanned items to their carts.
Moreover, with the New Year around the corner, consumers need to consider the bills and premium increases that often accompany January. To successfully avoid falling into a debt trap during the festive period, it’s essential to plan for December while also keeping January and subsequent months in mind. Given the expected increases in household premiums, such as medical aid, and ongoing inflation impacting grocery prices, being prudent with financial decisions is vital.
Here are some key tips for managing your budget throughout the holidays:
1. Stick to your budget: Assess your income and expenses from the previous month, then outline your festive expenditure to ensure you don’t overlook any bills or incur unnecessary debt.
2. Organise your spending: Create a list of necessary purchases for your household and compare prices at different retailers. Prioritize buying these items first, using any leftover money for non-essentials.
3. Choose online shopping: Shopping online helps curb temptation, allowing you to stick to your planned list. Opt for retailers that offer free home delivery.
4. Avoid last-minute shopping: Impulsive purchases can lead to inflated prices. Stock up during sales to prevent urgent last-minute gift buying.
5. Foster the spirit of giving: Establish guidelines for family gift-giving, such as limiting gifts to children or organizing a Secret Santa, to keep holiday spending in check.
6. Utilise rewards: Sign up for rewards programs and use your accrued points to make your holiday shopping more budget-friendly.
ADVERTISEMENT:
CONTINUE READING BELOW
7. Steer clear of borrowing: Avoid the temptation to rely on credit cards or loans for holiday expenses. If necessary, discuss early wage access options with your employer instead of accruing debt.
8. Teach children about finances: Use the festive season to instill financial literacy in kids by emphasizing the importance of giving and appreciating simple pleasures.
9. Prepare for January: Keep in mind that January often brings extra expenses, such as back-to-school costs, requiring careful financial planning.
10. Update your budget: As the New Year approaches, revisit your financial goals and budgets. Creating a clear budget can help you visualize your spending and identify potential savings.
As the saying goes, “a goal without a plan is just a wish.” With proper planning, you can avoid falling into a festive season debt trap and enter the New Year with improved financial control, ready to seize the opportunities that await.
Denise Neethling is the head of marketing at Earned Wage Access (EWA) company Paymenow.
Stay informed with Moneyweb’s extensive finance and business news on WhatsApp here.
