by | Dec 1, 2021

As we approach the proverbial finish line after a long year, most of us are looking forward to a well-deserved break. However, as we focus on making memories with our loved ones and living in the moment, it is easy to lose sight of our long-term goals – particularly when it comes to our finances. Phiko Peter and Tinashe Kunaka share some ideas to help you stay on track this festive season.


Last year, South Africans pumped R210 billion into the economy over the festive season. With vaccination rates on the rise and the world gradually reopening, spending is likely to increase this year, giving the local retail, hospitality and tourism sectors, and our economy, a much-needed boost.

With the holiday spirit in the air and our inboxes flooded with Black Friday deals and tempting travel offers, it’s no wonder that many of us are already finding it hard to resist the urge to spend. When you work hard and remain committed to achieving your goals, it is important to reward yourself. That being said, bad financial behaviour, even for just a few weeks over the festive season, can have far-reaching consequences for your pocket down the line. The good news is that planning your spending in advance can allow you to indulge over the festive season without leaving you with a financial hangover.

When it comes to our personal finances, most of us know what the right behaviours are, but knowing them isn’t always enough to control our impulses. Bearing in mind that our actions determine our outcomes, here are five suggested actions to consider taking to remain on track:

  1. Plan your festive spending 

Create a realistic budget that factors in how much you intend to spend over the festive season and accounts for January’s financial demands.

  1. Save before you spend:

With the best intentions, many of us promise to save whatever is left after the festive season. This often results in not being able to save at all. To make sure you meet your goals, spend what is left after you have contributed to your investments.

  1. Don’t overspend:

There is nothing wrong with treating yourself & revenge spending can be a good thing as it helps to restore industries and local economies that have been decimated by the pandemic. Think tipping, eating at restaurants, going to shows and live events, and visiting tourist sites and attractions.

Before you book your ticket, have an honest conversation with yourself. Consider whether or not you can stick to your financial plan and holiday budget. It doesn’t make sense to live above your means if you are borrowing against your future self. Be mindful of spending too much, especially as “Jan-u-worry” is also around the corner. Being realistic about your limitations and communicating these limits to your dependants will allow you to indulge without sabotaging your long-term goals.

If you are struggling to stick to a financial plan, or if you need help, speak to a good independent financial adviser.

  1. Don’t confuse your holiday fund with an emergency fund:

Going on a trip should form part of your short-term savings goals. While you may use a similar low-risk unit trust as you would for your emergency fund, such as a money market fund, you should have a separate account so as not to confuse the purpose of each.

An emergency fund should not be used to fund a holiday or treat your loved ones over the festive season; rather it is a safety net for unexpected expenses and shocks to your income. Life happens – as we have so clearly been taught over COVID–19 – and we need to be prepared.

Another helpful way to think of an emergency fund is to see it as a form of personal insurance for your long-term investments, as it will provide you with access to money and prevent you from abandoning your long-term financial plans when emergencies threaten to compromise your financial health.

Money market funds are low-risk investments, which aim to deliver higher returns than a bank deposit and can be accessed in a short space of time. They don’t always keep up with inflation, which is why they are regarded as a short-term parking place for your money.

Ultimately, and like most things in life, make sure you do your homework so that you are prepared, and not out of pocket if the unexpected happens.

  1. Top up your investments:

If you are lucky enough to receive a windfall, like a bonus or savings club payout, this presents you with an opportunity to make additional contributions to long-term investments, such as retirement annuities and tax-free investments, before the end of the current tax year. You can also use this money to pay off debt.