Salt Employee Benefits

Avoid the holiday debt trap

Holiday season is here. Time to chill. And shop. And spend.

Given the state of the global economy and the impact it is having on most South Africans, “chill” might be the only therapy for many of us!

Here are some tips to manage your budget in the holiday season:

  • Budget: Set a holiday budget and stick to it.
  • Forecast: Consider the impact of any December-January spending on your cash flow for February and March.
  • Avoid: A loan is easy to get but tough to service, especially high interest bearing personal or short-term loans, including ‘salary’ loans, made worse by rising interest rates. Good friends and family do not expect you to get into debt to buy them gifts or entertain them.
  • Desist: Giving yourself a ‘payment holiday’ by skipping essential commitments such as insurance, contractual savings, medical aid, rental / home loan, or vehicle finance to fund festivities will bite you in 2023 in terms of cash flow, credit ratings, claim exclusions and lost growth.
  • Reset: Make a list of the things you’d like to do that won’t crunch your budget. Re-discover life’s simple joys.

The reality is that the whole world (that includes your friends) is feeling the pinch right now so you won’t be the odd one out. You may well be one of the only honest one’s (who avoids the dreaded holiday debt trap).

You cannot change the world but you can determine that this holiday will be one of your very best!