So what are the practical ways that we can be centsible™ this Christmas?
1) Plan your expenditure. Set a limit for how much you will spend on presents and the various activities you would like to do. When the money runs out, accept it has run out and do not borrow or dip into other sources to fund this consumption. Also remember you don’t have to do everything e.g. be the perfect host as well as buy presents for everyone. You can decide to skip presents so that you can have a family gathering instead, or forgo everything to travel. Also consider shopping or pursuing certain activities before or after Christmas. A lot of prices are hiked up during Christmas because of the demand. This is particularly true for holiday destinations where prices drop significantly after the holiday season.
2) Don’t become emotional about your purchases. Do not succumb if you can’t afford it. We need to stop comparing ourselves with others and trying to keep up appearances. Fact is five years from now people will remember the time you spent with them not what you bought them. For those that are shopping for young children, is the gift you want to buy really about them or you? They really can’t tell that they are in designer wear! It may be you who wants to see them in designer wear. Be prepared to look around and get the best price. If it’s not in your list, don’t get it. There will be many stores advertising SALES but remember it is not a good deal if you had not planned on buying it.
3) Don’t borrow to consume. This is what is termed as bad debt. It gives us instant and temporary gratification but the painful long term effects will be felt. Many of us take on debt, spending more or going on a holiday that we can’t afford and delude ourselves with the notion that some unspecified event will come around in the New Year to sort our financial situation out but it never does. The credit card is surely a temptation to contend with in this season. We don’t feel the pinch and the payment is spread out to look so small but the interest costs are massive, many times over the amount initially spent. If you are not disciplined with it, leave it behind and walk around with a debit card instead. Also decline offers from your bank to increase your limit.
4) Plan how you will spend your time. How we spend our time is usually directly proportional to the amount of money we end up spending. Particularly after mid next week demands at work decrease. We start entertaining ourselves in various restaurants, pubs and spending can really go out of hand here when you are having a good time. You don’t actually have to go to every pub that you are invited to by friends. This is also a good time to pursue other activities that you have not been able to do in the course of the year such as catching up on reading, learning something etc. Not every activity needs to involve spending loads of money.
Remember January does exist (though in December people are in denial about this) and comes around with its own financial demands. Planning ahead is extremely important as many people are also paid their January salaries during this holiday season. These funds have to sustain you until end of January. Since we now know from experience the euphoria of the holiday season can dull all our senses, after calculating what you need for January, put those funds away in a separate account. Do not leave them in the everyday transactional account you will be operating this season.
Responsible Shopping during this Merry Christmas leads to a much happier New Year!
Waceke Nduati
waceke@centonomy.com