WANANCHI OPINION: The dos and don'ts to avoid becoming broke this festive season

The December festive season is a time of joy, celebration, and togetherness.

However, it can also be a period of financial stress if not handled carefully.

Overspending, impulsive purchases, and poor financial planning during the festivities can leave one burdened with debt or struggling to recover financially in the new year.

To avoid these pitfalls, it is essential to understand the money dos and don’ts of this period.

The Money Dos of the Festive Season include the following:

Setting a budget. Establishing a clear budget is the cornerstone of responsible festive spending. Start by listing all anticipated expenses, including gifts, decorations, travel, meals, and entertainment. Assign a reasonable amount to each category and stick to it.

A well-thought-out budget ensures you avoid unnecessary expenditures and stay within your financial limits.

Plan your purchases. Advance planning helps you avoid the pitfalls of last-minute shopping, which often leads to higher costs. Research prices, look for discounts, and compare deals across stores or online platforms. Planning also allows you to make use of sales events to purchase festive essentials at reduced prices.

Prioritize savings. While the festive season encourages spending, it is crucial not to neglect your savings goals. Allocate a portion of your income to savings before setting aside funds for celebrations. This ensures that you are not compromising your long-term financial health for short-term enjoyment.

Only give thoughtful and affordable Gifts. Thoughtful gifting doesn’t have to be expensive. Handmade presents, personalized items, or experiences like spending quality time together often carry more meaning than costly, impersonal purchases.

Opting for affordable yet meaningful gifts helps to manage costs while spreading joy.

Track your spending. Keep a record of all your expenses during the festive season. This practice helps you stay accountable and ensures that you remain within your budget. Regularly reviewing your spending allows you to identify areas where you may need to cut back.

Plan for the next year. Use this festive season as a learning opportunity to plan better for future ones. You may consider starting a savings fund dedicated to festive expenses. Contributing a small amount each month can help you build a sufficient fund for next year’s celebrations without financial strain.

On the other hand, the following are the don’ts of December festive season.

Don’t rely on credit cards excessively. Credit cards can be tempting during the festive season, offering convenience and rewards.

However, relying too heavily on them can lead to significant debt if you fail to pay off your balance in full. Avoid making purchases you cannot afford to repay immediately, and limit your credit card usage to planned expenses.

Avoid impulse buying. Festive displays, advertisements, and promotional offers are designed to encourage spontaneous purchases. Resist the temptation by sticking to

your shopping list and avoiding unnecessary purchases. Impulse buying can quickly derail your budget and lead to regret later.

Don’t ignore hidden costs. Festive celebrations often come with hidden costs, such as delivery fees, wrapping costs, or travel expenses. Ignoring these can inflate your overall spending. Be mindful of these additional expenses and factor them into your budget.

Don’t overcommit financially. It is easy to overextend yourself financially during this season, whether by hosting lavish parties, buying expensive gifts, or taking on extra travel costs. Remember, it’s okay to set limits and say no when necessary.

Overcommitting can leave you struggling financially after the festivities are over.

Don’t borrow for festive expenses. Taking out loans or borrowing money to finance festive celebrations is a significant financial mistake. The festive season is temporary, but the burden of debt can linger for months or even years. If you cannot afford certain expenses, consider more affordable alternatives instead of resorting to

borrowing.

Don’t forget to plan for January. The excitement of December can overshadow the financial needs of January, a month that often comes with its own set of expenses, such as school fees, utility bills, and rent. Avoid overspending in December to ensure you are financially prepared for the new year.

The festive season should be a time of happiness, not financial regret. By practicing financial discipline and mindfulness, you can celebrate without compromising your financial well-being. Emphasize the value of experiences, relationships, and thoughtfulness over materialism. Educate yourself and your family about the importance of budgeting and prudent spending.

Ultimately, the key to a joyful and stress-free festive season lies in striking a balance between celebration and financial responsibility. Adhering to the money dos and don’ts I have outlined above can help you navigate the festive period with confidence and enter the new year in a stable financial position.

Celebrate wisely, and let financial prudence be one of the best gifts you give yourself this season.