As the festive season draws to a close, the reality of overspending, debit orders and holiday debt becomes real for many households.
Money coach Marnita Opperman says beating holiday debt starts with proper planning and better money management.
A qualified accountant, Opperman herself once racked up debt of R95,000 due to overspending and poor financial planning.
The amount of debt you have is all relative to your lifestyle and your income.— Marnita Opperman, Mindful Money Coach
People tend to overspend this time of the year... Most people hadn't planned or saved for December and didn't watch their spending.— Marnita Opperman, Mindful Money Coach
Opperman shares some tips on how to recover from holiday debt and avoid falling into the same trap in future:
- if you have to decide between paying your overdraft or credit card first, start with the overdraft and gradually decrease the limit at the bank
- avoid taking out overdrafts altogether where possible as the interest rates are higher than credit cards
- be aware of your "money personality" so you can identify what your triggers are and improve your relationship with money
- dedicate yourself to at least one financial goal in 2019, such as creating a savings buffer
- create a separate bank account and set up a direct debit order to start saving
- plan early for the holidays and don't leave the grocery budget and gifts to the last minute
- use your bonus or 13th cheque wisely, equally splitting it three ways towards spending, debt and savings
- set a realistic and manageable monthly savings amount and increase it every three months
Listen for more expert advice on how to manage your money better:
This article first appeared on CapeTalk : Feeling the repercussions of overspending? Top tips on how to beat holiday debt