The festive season is slowly approaching and in most cases where the average South African buys a holiday on credit, it can take up to six months to pay back.
The festive season is slowly approaching and in most cases where the average South African buys a holiday on credit, it can take up to six months to pay back.
Receiving a credit card bill after a relaxing holiday can be an eye-opener. Standard Bank saving and investments manager Nolene Parboo advises consumers to consider planning ahead and to try and save in advance as this will help lighten the financial burden.
She offers the following tips to help get you started:
* The first place to look for extra cash is in your existing budget. We often waste a lot of money on impulse and convenience buys such as fast foods or that new gadget on the market – so start by reviewing your bank statement to see where you are able to cut costs. This will help free up some cash.
* If your leave times are flexible, consider going away out of peak season as this can help you save as much as 50 percent. Consider an all-inclusive trip or package deal as they offer great value for money and will help you to stay in budget. Also review your bank’s rewards programme which often offers specials or discounts for travel.
* Consider selling unwanted items that are no longer needed. You will be surprised how much you can earn out of items gathering dust in the garage. Run through each room and collect as many unused items as possible.
* Take all the silver coins you have at the end of each day and put them in a container. Consider even breaking notes from small purchases to collect as much change as possible. Do a tally at the end of each month to see if you are on track. The trick is to avoid exchanging the coins at the bank until you need the money. Converting the coins into notes often tempts us to spend the cash. Consider getting the family involved by giving each member their own jar and running a competition to see who can save or collect the most change.
* Withdraw money directly from your bank as withdrawing from another bank is costlier and fees can add up quickly. Review your accounts to ensure they are optimised fully, take the time to talk to your financial consultant and go through your accounts to see if you can streamline them. Using the right account for your needs can save fees. Also ensure you are not paying debit orders for services no longer required.
* Frequent, unnecessary short trips can hike your petrol bill. This may sound extreme, but if you are driving a car with a big 4 litre engine, scaling down to a 2 litre car will not only help free up to R2 000 per month of your fuel bill, but also cut on insurance costs.
* Consider keeping an existing phone – why change to the newest phone and incur an additional unnecessary expense if it works perfectly well?
* Remember that money spent on credit is borrowed from the bank which needs to be paid back. If you can’t afford an expensive holiday, consider an alternative way to relax. While an opulent holiday creates good memories, selfie opportunities and fun Instagram pictures, huge bills will create an unpleasant and stressful financial burden on your return.
