The Festive Season is a time when many feel tempted to spend all their money.
As the festive season approaches consumers need to be smarter with how they spend their money and think about the deals that they get into.
The Credit Ombud, Nicky Lala Mohan says that many households rely on credit to cover their day-to-day expenses, which suggests that they are not living according to their means.
“Overspending during this time of year is often an emotional response. Consumers feel that they have worked hard all year and deserve to spoil themselves and family members,” said Lala Mohan.
However, consumers need to be warned that it is irresponsible and dangerous to spend too much on credit just because it seems like everybody else is doing so in the shopping malls.
“What consumers should realise is that come the end of January, you have to pay back the loans as well as school fees etc. If you cannot afford the repayments and once you fall behind, it can be very costly in terms of interests.
“This is usually the first step to a debt spiral. If it’s not in your budget, don’t borrow to get it,” warned Lala-Mohan.
Tips to spend wisely:
- Avoid new debt
- Have a festive budget
- Save for next year’s school requirements: fees, stationery, uniforms?
- Eat at home
- Compare prices
- Be creative with gifts
- Avoid end of season sales.