Don’t be led into holiday season temptation

Laura du Preez | 24 November 2021

Laura du Preez has been writing about personal finance topics for more than 20 years, including eight years as personal finance editor for two leading media houses. 


The festive season and end-of-year break are a great time, but it is so easy to be led into temptation – gifts, food, seeing friends and family or being away from home all cause overspending. It is also easy to blow a bonus.

Smart About Money asked three women who think a lot about money to share their insights on how you can avoid a financial hangover and the dreaded Jan-u-worry.


Is it a good idea to draw up a separate budget for December? Do you?

“Absolutely! Holiday spending can quickly get out of hand. Our guards are down,” says Jean Archary, financial planner and financial wellness coach at Money Messages.

Archary says December spending is different from other months, so while ordinarily frugal, she has a holiday budget and can then “spend freely without guilt”.

The past two tough years should remind us not to overspend and to be better prepared financially for adversity and challenges, she says.

December is eventful because many people take time off. Your bills may all go up when everyone is at home, Sindi Mondi, a financial adviser at Liberty, says. 

It is summer and exciting, but summer essentials cost. Some people get paid a bonus, she says. This means you need to be cautious, and have a specific spending plan for the month, she says.

Dr Gizelle Willows, an associate professor at the University of Cape Town researching behavioural finance and founder of Nudging Financial Behaviour, says she sets a monthly budget for regular expenses every year.

However, she also sets aside savings for the unexpected. When it is time to put down a deposit for a holiday, or spend on the festive season, the money is already saved, she says.


Sticking to your budget

As tough and tempting as it may be, Mondi says she tries to stick to her budget. She makes use of special deals, like those for Black Friday, to stock up on essentials for December and January.

Exchanging gifts is wonderful, but saving for this season’s expenses should be every family member's responsibility, she says. Kids should be involved.

Willows suggests you list those to whom you give a gift and allocate an amount. Keep track of additional gifts as they arise, so that the following year you can be better prepared. 

If you struggle to stick to your budget, take note of what leads you into temptation. You may need to avoid the malls, Willows says. If Black Friday trips you up, remove it from your life. Be honest with family and friends if entertaining breaks your budget – say you would prefer a picnic to a restaurant, Willows says.

 “Just don’t try to pretend – because then you will go from one expensive event to the next and you will be in trouble in January.”

Archary sets her initial spending target lower than the amount she has – for example R8 000 when she has R10 000 allocated. She then has a R2 000 buffer in case her spending goes over.

She recommends planning Christmas gift spending based on what you can afford.

“Covid has taught us that presence not presents is more important to celebrate.”


If you receive a bonus, should you plan how to spend it?

There is plenty of research showing that you are more likely to spend a bonus or tax rebate frivolously than you would your salary earnings, Willows says.

This may not be a problem if you are living within your means, she says, but if you have costly debt, you should use your bonus to pay off that debt. The sooner you do so, the sooner you will be able to use a bonus as you would like, she says.

Mondi says without a plan on how to spend your money, “you find yourself wondering how the money got finished!” A bonus spending plan will identify where the need is and help you to prioritise accordingly, she says. You can then look back and see how much you covered just with your bonus. 

Applying the rule of paying yourself first is a great habit to get into, Archary says. Take out a minimum of 10% on the day you receive a bonus and save it for a future goal, you won’t miss it, she says. Use a portion to pay off any debt and if you have kids, remember school fees and related expenses that will need to be paid in January, she says.


How do you avoid Jan-u-worry?

After every December comes the month when pay day takes forever to come around.

Mondi says she pays the January school fees in December and suggests making use of discounts schools offer if you pay fees for the year in advance. She also buys uniforms and stationery before Christmas clothes to reduce the January challenges. 

If your salary increases, use this to start, or add more to, your emergency fund.

“A salary increase is as exciting as getting a new job. Know what that opportunity brings to your household, so you can plan for it well,” Mondi says. 

Willows says she uses the holidays to set her budget for the year ahead and give her finances a complete review.

Archary says financial security is extremely important to her as an entrepreneur with a variable income. This is why she relies on a spending plan to manage her cash flow. “I know exactly what fixed expenses need to be paid for each month, as well as the average amounts I spend on variable expenses.”

Each year she creates a new budget and starts the year off “on a clean slate, so no credit or store card debt to add to Jan-u-worry”.

In 2019, as a then employee for a large corporate, she did not receive an annual increase and learned to live without it.

“It was hard, because everything else went up, but we survived. It is all about how we frame our thinking. If today, you were told your income was going to reduce by 10%, you will find a way to cut down expenses. So why is it so hard for us to put away 10% for a future goal?”