OPINION: Stick to your financial plan this festive season

It is no surprise that most South Africans tend to overspend during the festive season, failing to remember that there is still a full month of expenses in January. During this time, people are more relaxed and are trying to have fun, so they naturally neglect to plan properly and end up spending money carelessly.

In order to avoid overspending, it is very important to have a clear picture of your finances prior to embarking on any adventures or spending sprees this festive season. The cornerstone of that planning should be a realistic budget. This involves determining what you want to do during the period and setting up a budget to make sure you can afford the things on your to-do list.

A budget is not a once-off thing, but rather a process where you have to apply discipline to keep within that budget. If you have a dedicated financial planner, they should be available to soundboard with you. Also, they would be able to help you place your holiday goals into perspective in relation to your lifestyle financial goals i.e. your long term goals.

It is important to understand what you would like to get out of your holiday and how you envision spending your time and resources. Then utilise your planner to ascertain if this is affordable in your current lifestyle financial plan. In the end you should be clear on what you can achieve and how that will be funded. This may involve compromising on certain aspects, but in the end there should be a balance between the wants, needs and cans.

If you have spent time with a proper financial planner and you have set lifestyle financial goals, it is critical that “windfalls” like bonuses be discussed with your planner to fit that into your global financial plan. Spending a bonus all at once will be a huge waste, it is much better to put at least a portion of your bonus towards long term financial goals.

By taking the time to plan your holiday budget, you will be able to enjoy your holiday free from stressing about your spending.

The stress of sticking to a budget is actually less than the stress of overspending. By planning comprehensibly you will find that sticking to a budget isn’t a chore, but simply a natural outflow of your planning. The stress will simply disappear and you’ll be able to enjoy every moment of your holiday. Most of all, be safe, prepared and enjoy the well-deserved break.

When it comes to budgeting, it is always best to contact your financial planner to provide advice based on your unique circumstances.