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Tips to avoid the festive season debt trap
Super Contributor
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It’s easy to get carried away over the festive season seen as a ‘time for giving’. Don’t fall into the overspending trap again year and think of your financial future.

First things first, sit down and set a budget. Work out how much post-Christmas debt you have and how to reduce it.
This requires discipline but if you stick to the plan, you’ll be reaping the rewards of a debt-free new year.

Tips for a successful budget
• Write down an accurate and honest list of your expenses and income. Use your recent bank statements, invoices and receipts as a guide

• Use two columns on the same page. You’ll then be able to get a realistic picture of exactly what expenses you’ve incurred, no matter how small. Remember: it all adds up

• Compare the totals. If you spend more than you are making you need to change you’re spending habits. Make a list of essentials and non-essentials. Essentials should only include things like rent or bond repayments, school fees, groceries etc.

• Open separate bank accounts for each category. Don’t be tempted to dip into the essentials account

• South Africans aren’t saving enough. Budget to save a minimum amount every month, and put it into a savings or investment account. If invested at 12% per annum a mere R200 saved per month will translate into R32 994.55 over five years

• Pay off your credit card debt by paying the specified amount in full at the end of each month, to avoid paying interest

• The festive season comes around every year, so budget for it. List your extra expenses for this period, including January

To be successful, it’s important to understand your bank charges as well. For example, try to do your transactions online, it’s cheaper than going into a branch.

The rule of thumb is, don’t spend money you do not have.
To find out more information go to Managing your debt - Standard Bank.
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