Dr. Andrews Ayiku writes: How to avoid post-Christmas debt in an unpredictable economy

Economic uncertainty has been a continuous background in our financial world in recent years. Financial planning has become more difficult as a result of inflation, supply chain interruptions, and unpredictable employment rates. Many people are dealing with the overwhelming reality of post-Christmas debt in the aftermath of the holiday season, especially in the context of an uncertain economic outlook. The pressure to fulfill expectations, exchange presents, and partake in seasonal festivities sometimes causes financial distress. When combined with economic uncertainty, this debt load can intensify stress and jeopardize one’s financial well-being.  However, by employing realistic tactics, it is feasible to manage these turbulent times without falling into post-Christmas debt.

Make a budget and stick to it

The holiday season is a time of joy, celebration, and, in many cases, increased expenditure. Creating and sticking to a budget at this time, on the other hand, is critical to preserving financial security and preventing post-holiday stress. Begin by taking stock of your financial status. Take an inventory of your earnings, spending, and any outstanding obligations. Understanding your financial situation is the first point for developing an efficient budget.  Define your goals for the holiday season. Determine how much you can spend without jeopardizing your financial situation. Setting defined goals aids in the creation of a realistic budget.  Divide your spending into categories like presents, decorations, travel, meals, and entertainment.

Avoid impulsive purchases

Begin by creating a clear and realistic budget for the holiday season. Consider all prospective expenditures, such as presents, décor, food, transport, and entertainment. A predetermined spending limit will act as a guide and avoid impulsive purchases that may exceed your financial limits. Make a comprehensive list of the products you truly need to buy before going shopping. Include specifics like particular present ideas, food for scheduled dinners, or essential décor. Stick to this list religiously to prevent impulsive expenditures that might put a burden on your finances.  Plan your purchases and do extensive pricing research. Look for sales or special deals, compare prices amongst retailers, and look for savings.

Prioritize critical payments

Assess your financial situation by first assessing your present financial situation. Take an inventory of your earnings, spending, and any outstanding obligations. Make a detailed budget that includes all of your usual spending as well as any additional costs associated with the holiday season, such as presents, decorations, and activities. Differentiate between necessary and non-essential payments. Rent or mortgage, utilities, food, insurance fees, and debt repayments are all examples of essential payments.  These are the essential costs that must be prioritized to keep your job and financial security. Prioritize necessary payments depending on their importance and the repercussions of nonpayment.

Begin a savings plan

Setting clear and attainable targets will offer direction to your savings strategy, whether it’s building an emergency fund, saving for a specific item, or budgeting for the future year.  Examine your financial situation thoroughly. Examine your current income, spending, debts, and savings. Understanding your financial situation is critical for calculating how much money you can set aside for savings throughout the holiday season. Create a precise budget for the holiday season spending. Include all expected expenses like presents, décor, travel, and entertainment. Consider automating transfers to a savings account. Each month, allocate a percentage of your money to your savings account. This “pay yourself first” strategy guarantees that savings take precedence over frivolous expenditure.

Explore Alternative Income Sources

Make use of your talents or hobbies to give holiday-themed services. Provide gift-wrapping services, holiday decoration, baking, event organizing, or bespoke gift-making. Use internet platforms or social media to reach a larger audience with your services.  Consider renting out any extra space or assets you have. During the holiday season, offer your property on sites like Airbnb to tourists. Renting out equipment such as cameras, tools, or event supplies may potentially provide extra revenue.  Investigate options to monetize your material if you have a strong social media presence or creative abilities.  Collaborate with sponsors to provide sponsored content, affiliate marketing, or seasonal content for your audience.

Keep an open mind and be adaptable

Spend mindfully by deliberately examining goods. Before making a purchase, take a moment to consider whether it is in line with your budget and objectives. Focus on purchasing products with long-term worth and avoid making impulsive purchases that may strain your finances.  Create a precise budget covering all of your planned holiday spending. Include costs for presents, decorations, travel, entertainment, and any other outlays. Make sure your budget is sensible and in line with your financial resources.  During the holiday season, be flexible and willing to change your expectations. Consider reducing festivities, having potluck events, or limiting gift purchasing. Instead of lavish spending, prioritize the creation of meaningful experiences.

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By: Dr. Andrews Ayiku

Lecturer/SME Industry Coach

University of Professional Studies Accra

[email protected]

linkedin.com/in/andrews-ayiku-31000374/

IG: andy_ayiku

@AndrewsAyiku

F: Andyayiku

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