Mbo Luvindao
As the festive season approaches, many people are getting ready to take time off, go on holiday and spend quality time with loved ones. Yet, while the Christmas holidays are meant to bring peace, joy, and goodwill to all, they can also strain one’s finances, especially with added Christmas expenses and the start of a new year just around the corner.
When I started my professional career, I had a colleague, whom for the sake of anonymity, we will call John. John was a young professional who, like me, was excited about the holiday season. One year he bought lavish gifts for his friends and family and booked a spontaneous holiday trip. Without a budget or plan, he relied heavily on his credit card. By January, John faced the reality of an empty bank account, overdue rent, and he additionally owed high- interest payments on his credit card debt. He struggled to meet essential expenses for months, including food and transport. So, he borrowed money from anyone who was willing just to pay for daily needs. John’s situation is a cautionary tale of what happens when we fail to plan, budget, and save for unexpected costs.
Proper planning and budgeting can help you enjoy the festive season without falling into financial hardship like John. Here is a guide on how to manage your expenses, and budget for gifts, travel, and celebrations, while also saving for unexpected costs and the new year.
- Set a Realistic Festive Season Budget
The logical starting point is to set a realistic budget that encompasses all the expenses you anticipate during the festive season. This includes gifts, food, drinks, and travel.
Review your income and understand how much extra money you can spend after paying for your essential expenses like rent, transport, electricity, water, and your loan repayments (or any other financial commitment you may have).
Then allocate the remaining extra money to categories such as gifts, food, and travel. You need to stick to these amounts to prevent overspending.
Remember that January often comes with its own set of financial demands, including school fees and, uniform purchases, in case you have school going children.
- Be Thoughtful About Your Gifts
Giving and receiving gifts is a wonderful part of the Christmas season, yet it can be costly.
Aim for thoughtful and meaningful gifts that are within your budget. Consider personalised or handmade gifts which could be highly appreciated and are often more affordable.
Consider strategies such as, allocating a specific amount for each person on your gift list or taking advantage of specials at retailers early during the festive season- plan in advance.
One may also consider a secret Santa arrangement; this works well for large families.
Everyone buys one gift for someone else, reducing the overall costs for each person.
- Plan for Festive Travel and Events
Whether you are traveling to see family or hosting gatherings at home, travel and entertainment can be extremely expensive. Early planning and budgeting are key to reducing these expenses.
Consider strategies such as making your travel arrangements in advance. Booking early can help you get lower rates. Some transport companies offer discounts for holiday travel if you book in advance.
If your budget is tight, consider options closer to home. There are many affordable holiday places to visit for the day that allow you to enjoy a break without the excessive cost. Avoid at all costs to borrow money for short term expenses like Christmas traveling and gifts.
- Budget for Unique January Expenses and Save for Unexpected Costs
As mentioned earlier, the start of the new year often brings additional costs such as school fees, school uniform and other stationery. Preparing for these expenses during the festive season is particularly important.
Budget for school fees, uniform and stationery from your October, November, and December income. Don’t leave these to the new year unless you have sufficient disposable income to pay for it all at once or enough to repay a loan at your nearest Letshego branch.
Save some money for emergencies. This could cover unexpected expenses, like last-minute travel or unforeseen repairs that may arise during the holiday season. Letshego offers a range of savings products such as the TermSave, FexiSave, and LetsInvest designed to help you achieve your financial goals, with competitive interest rates and flexible access to your funds.
A thoughtful, realistic approach to planning for your finances can help you genuinely enjoy the festive season and family time without unnecessary financial pressure. Letshego Holdings Namibia reminds the public to embrace the true spirit of the season by finding balance—celebrating joyful moments while staying prepared for the year ahead.
Mbo Luvindao is the chief commercial officer of Letshego Holdings Namibia