LIFESTYLE NEWS - If the latest Eurozone crisis and resulting markets meltdown has taught us anything here in South Africa it must be that this holiday season it will be far more worth our while to manage our money wisely instead of flashing our cash.

That’s according to Gcinisizwe Ndebele, Head of Bank Channels and Emerging Products at Stanlib, who urges South African employees to think carefully before spending their hard earned money this festive season.
"There’s a reason, the December period has become known as the silly season in South Africa," says Ndebele, "and it has less to do with people’s relaxed holiday attitude and more to do with the fact that many of us give into the temptation to spend money without thinking."

According to Ndebele, the negative impact that the latest European financial crisis has had on South Africa’s markets and currency is proof that we are definitely not immune to global economic turmoil, and those consumers that are fortunate enough to still receive a 13th cheque or December bonus this year, would be well advised to spend it wisely.

Ndebele explains that the ‘festive’ nature of this time of year often results in people quickly spending, or overspending, their December bonuses and, in many cases also their regular monthly earnings – before realising that they are likely to face substantial cash outlays on school uniforms, fuel or transport, school fees, and other living costs at the start of the new year.

"The temptation to spend at year end can be overwhelmingly strong," he explains, "but before we all rush out to enjoy the parties and spoil our friends and family members with lavish gifts, it’s worth considering that the New Year invariably brings additional expenses after the holiday period."

While he is not suggesting that people don’t spend any of their income on spoiling themselves and those they love at this time of year, he is adamant that the best way to manage your finances at year end is by formulating and, more importantly, adhering to a household budget.

It is essential that you list all your expenses for December and January and then set aside the money you need to cover those before you spend on anything else," he explains, "and if you don’t have the money to splash out, just don’t’ do it – getting into long-term debt for the sake of short-term gratification is never a wise approach to life."
For those who recognise the challenging times South African consumers are set to face over the coming months and years, and are serious about empowering themselves to cope with them, Ndebele has the following three pieces of advice:

1. Decimate your debt. No it’s not as satisfying as spoiling yourself or others, but it will be far more gratifying in the long term. Ploughing some or all of your bonus into a high interest debt is undoubtedly the wisest action you can take these holidays.

2. Save. Save. Save. The fact that we don’t have a lot to invest into a savings product is a very poor excuse not to start one. There are many products that you can open with small initial deposits. Look for a vehicle that offers good interest.

3. Make a plan. It’s too late for 2011, but there’s no time like right now to start planning for next year’s festive season. Use that savings account you set up to put away a set amount of money every month. Even if you can only manage R100 a month, by next January, you’ll have R1200 plus interest available to cover those unexpected expenses - then you can spend more of your bonus on yourself.

"Regardless of whether or not you receive some extra income this December, there can be no doubt that you need to spend wisely and manage your finances well," Ndebele notes, "and if financial worries make this season a little less festive for you, use the experience to plan for next year, because if the situation in Europe is anything to go by, it looks like we’re all in for a bumpy financial ride for some time to come."