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Being Money Smart this Festive Season

“Money is a very emotional topic, and in December, we want to switch off, recharge, be really silly and have a fabulous time.”

Money is the last thing you want to stress about over the festive season. Yet, with the right tools it doesn’t have to be something that creates stress in our lives. To find out what the do’s and don’ts are regarding our finances over the festive season, MYD Smart spoke to Financial Advisor, Professional Speaker, Dynamic Facilitator and owner and founder of Chase & Associates, Afra Schimming-Chase, to find out what the smart money tips are for the festive season. Afra prepared the following info piece to keep us free of money worries this festive season.

Smart Money Tips for the Festive Season – How to ensure you start the New Year with Money by Afra Schimming-Chase

Every year, just around this time, the question comes, always relative to how to balance having a great and festive season, whilst ensuring that there is money left for the New Year.  For many, it is really a challenge to find this balance, and there are some useful tips, universal money principles that ensure that there is enough money left at the end of your month of December and into the month of January, I am so happy to be able to share with you, just how:

1. Define a Purpose for your Money

There is a saying that goes something like, “if you stand for nothing you’ll fall for anything”, this is true for money too.  It is so important to have a purpose for your money, so much more so during the Festive season than at any other time of year.  Money is a very emotional topic, and in December, we want to switch off, recharge, be really silly and have a fabulous time.  And this is all possible, but like with everything, in moderation.  Take some time now, find a quiet space where you have 20 minutes to spare and determine what you’ll do with your cash during the festive season.  Give yourself some room, create some guidelines, give yourself some boundaries and work within these lines.  Look at what matters to you, what makes a difference for you and is important to you.  What does this time of Christmas mean for you and your family.  Use these inputs to create a vision board for yourself, a constant reminder of where your money should be going to, because you said so, that’s what you’ve defined as important for yourself.  That becomes your something to stand for, which prevents you from falling for anything that may tempt you to forget your purpose, your vision as you enjoy the festive season.  In addition, this process calms your emotions, ensuring that you use your executive brain to make decisions and not the emotional one which really tends to be at the forefront when we don’t want to do the thinking.

2. Keep a Spending Diary

Sometimes, all we need is clear awareness of where our money is going in order to curb overspending.  Keeping track of every cent you spend, whether in cash or in card, gives you a sense of your outflow.  A process considered cumbersome at times, yet effective in directing the flow of your money.  I advise clients to focus on this process, mostly when they feel that their income and spending is out of whack, it’s a call to order, a means to come back to the centre, purely a way in which to take control of your money matters.  It’s not something that needs to be done all the time, but it works especially when the temptations to spend run high.  And this is how it is when retailers are pulling out all the stops, advertising specials and making it so easy to deviate from your spending plan.  This is where and when your self-care is of primary importance, and taking care of your money is a form of self-care.

A caution when it comes to swiping with a card, “credit cards effectively anaesthetise the pain of paying”, says George Loewenstein, Professor at Carnegie Mellon University.  I couldn’t agree more, therefore, be sure to track all the plastic purchases too.

3. Draw up a Spending Plan

When you review your spending habits, through your spending diary, you are able to determine where to cut spending, and you are clearer on any wastage that may be happening, and trust me, wastage there always is, and it’s easiest to find once it is written down.  Next step is to devise a plan for spending, not just for the festive season but for January too.  Typically, what gets people down, is the waking up in January after an amazing “silly” season, only to be reminded of periodic expenses conveniently forgotten during the festive times.  January is a month of huge periodic expenses, ones that do not occur regularly or every month.  These once-off expenses are what break the bank, because they are not generally planned for in the monthly spending plan, because they occur sporadically.  By planning for January now, you get a good sense of exactly what you need to keep the spirit of the festive season all the way to the end of January.  Seeing your needs on paper, also serves to curb unnecessary spending habits and give you the freedom to determine how to live financially responsibly when it’s far easier to go with the flow.  There are a number of awesome budgeting tools and spending plans online, it doesn’t take long to prioritise all the spending that you expect, and seeing what January may look like now already, may be an effective means of ensuring you have money in the New Year.  Start off strong, and inform yourself, check out mint.com and numerous other sites for tools to plan your spending.

4. Make it a Habit to put a little bit away

Many salaried employees receive bonuses or 13th cheques during the months of November/December.  These extra cash amounts are perfect to put away to cater for the New Year’s starting expenses.  You could stash some of the cash in a unit trust account that you may already have serving your emergency needs, by instituting a once-off debit order against that account, or you could do the same with your savings account.  Taking the money out of your current account also does a whole lot to allow you to resist the temptation of using whatever is available in your bank account.  And it takes us back to the principle of “You are your most important creditor, pay yourself first”, by taking the action to put the money away, you are once again executing a form of self-care.  Putting yourself in a position of power to start the New Year, strong and armed with the control of your expenses.

I have also found that purchasing stamps or coupons for grocery shopping in the other months of the year, provides an extra cushion for the additional shopping needs for Christmas time.  Many have managed to save up to half the extra cash needed to eat, drink and be merry on Christmas and New Year’s Day.

5. Get creative

The festive season is a time to celebrate, enjoy, restore, rejuvenate, share and so much more.  It is a time when gift giving can be done in so many creative ways, some ways may include money, others get your creative juices flowing.  I found some interesting ideas on the internet and these go a long way to helping you stretch your dollars during this time:

  • Instead of buying gifts for each of the important people in your life, engage in gift exchanges, where each of you draw a name and purchase one gift per person, rather than each getting a gift for the same person.
  • Determine a price range for gift giving, making it far lower than what you would usually spend.  It makes the gift that much more thoughtful, because you do not have the luxury of unlimited funds to determine your choice of gift.
  • Make something, with holiday time on hand, it’s an ideal opportunity to get creative and make original gifts, after all, it is a time of remembrance, and what a wonderful way to remember through hand-made gifts.
  • Instead of buying gifts for family and friends this year, agree to donate to a charity or other well deserving organisation making a difference in communities where often support is far from sufficient, make a difference in the hearts of many, who may not recall your name but will always remember the value of something new in their lives.
  • Clear your cupboards of clutter, we all have so much more than we could ever wear in shoes, accessories, clothes; even items we have never worn.  Clearing out your clutter makes space for the New, and the saying goes, “one man’s trash, another man’s treasure”.
  • Use old gift boxes and newspaper for creative wrapping, rather than purchasing new ones.

There are so many ways to ensure that this New Year is one where you experience your money as an effective tool, a means to live the life you want, a way to create that which you wish to experience.  All you need is the courage, and some time to connect to what is important to you and to chart your future as you deem it fit.

Have a blessed Festive Season, enjoy family and friends, may you connect to your ultimate meaning for Christmas, and always have that which you need to create the life that you want, because after all, “how you do money, is how you do life.”

You can get in touch with Afra Schimming-Chase by emailing : AfraS@chase.com.na