The joy and excitement of the holiday season can often lead to overspending and accumulating debt. As January approaches and expenses such as children’s school fees loom, how can you make sure to stay within your budget?
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Teddy Kaberuka, an economic analyst, said that the festive season involves celebrations that require spending money on food, gifts, or outings, however, he stressed the importance of responsible buying and spending.
"Be conscious, don’t be extravagant, and spend on something that has value for money. Don’t overspend as a lot more requires money after the festive season. Be aware that January is like any other month.”
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Kaberuka recommends budgeting what one needs to spend, revisiting the list, and spending where necessary.
He stressed that when one efficiently manages their finances, the money saved can be invested in something else.
"In order not to be a burden to others requesting loans, you require financial discipline,” Kaberuka said.
For Caroline Musuhukye, a financial expert in Kigali, those who receive a bonus can utilise their December salary and keep aside their bonus. Those who don’t obtain bonuses should first check their expenses for January, set aside that amount, and spend what’s left.
She explained that setting a clear goal for the money you save will help you meet your overall financial goals.
"If there is no budget, financial constraints will set in. Know your priorities and make a list of what you need to buy―and then stick to it,” Musuhukye said.
She urges working out how much you can afford to spend and allocate funds to cover all your expenses for the holiday period.
Musuhukye suggested setting spending limits, whether for gift shopping or other items, to avoid a financial hangover in the New Year.
"Look for means to cut back on spending. Instead of heading to an expensive hotel, bar, or restaurant, consider having a barbecue or small party at home.”
Consider a staycation instead, she suggests. Purchase games, movies, and other fun activities for the family. This way, you save money on travel, hotel, and other expenses.
According to Angello Musinguzi, an expert in tax advisory and accounting, measure your income and spend sparingly.
"Purchase items that are necessary for your family. Avert peer influence shopping, for instance, it is not a must to have a Christmas tree and decorations just because everyone else is doing it,” Musinguzi said.
He discourages borrowing to have a memorable Christmas, stressing that it can be catastrophic. "Don’t change behaviour, buy what is essential, don’t get excited, and buy things you don’t need.”