The week before Christmas is always a scramble. You’re uncertain about what to get your loved ones – and, once you figure it out, you rush from one store to another.
You promise yourself “never again” - next year will be different. We have a look at how you can plan ahead for your Christmas shopping, and we consider alternatives to purchasing gifts upfront.
Tip: Get your debt in order so that you can afford your Christmas shopping.
Get an early start
According to Sbusiso Kumalo, chief marketing officer at African Bank, most of us leave things for the last minute during the holiday season, and we end up panic buying.
“Rather than battling the mall crowds, Christmas should be a special time that you spend with your family and friends,” says Kumalo.
In order to avoid the exhaustion and worry that comes with Christmas shopping, he suggests that you buy gifts in the months before Christmas so that you can spread out your budget.
“This will also allow you to look for specials. If you plan ahead, you could benefit from flash sales. For example, online sites often have a 24-hour sales boost,” says Kumalo.
When it comes to setting up a budget for the holiday season, he says you should start with a gift list. Your next step would be to look at how much money you can afford to spend, once you have paid all your necessary expenses.
“A great way to ensure you’re prepared is to start a savings wallet for Christmas. You can do this early in the year, and put a small amount away each month. You’d be surprised at how it all adds up, and how much it helps when November and December come around,” says Kumalo.
What other options do you have?
If you haven’t set aside cash reserves, Kumalo says that there are other options. He outlines these.
1. Lay-bye
A lay-bye allows a customer to select an item and pay for it over an agreed period of time. The retailer keeps the goods until the full price has been paid over a series of regular payments.
Several retailers offer this option. The upside of these agreements is that no interest is charged, and you can purchase now, knowing the items are available. The downside is that you usually need to put down a deposit, which might be a stumbling block.
2. Hire purchase
A hire purchase, or instalment plan, is an arrangement where a customer buys goods by paying an initial deposit, such as 40% of the total cost, and repays the rest over a period of time at an agreed interest rate.
This option is generally used for high-cost items, such as electronic goods and furniture. The upside is you get to take the item home straight away. The downside is that you will continue to pay interest on the outstanding amount, and if you miss an instalment, the item may be repossessed.
3. Buying on credit
The final option is buying on credit. This is when a consumer borrows money from a financial institution, takes the item immediately, and pays back the total owing over a period of time at an agreed interest rate.
It’s important to remember that credit isn’t free. Initiating a loan with any registered financial entity entails interest, and service and initiation fees. This means that you pay more for the item than the purchase price.
Kumalo says that whatever your plan may be for the festive season, the key is to stick to it. Don’t be tempted to dip into your December savings or put your plans on hold to make other purchases.
“You will see the benefits when the festive season approaches if you are prepared. On top of this, you can start the new year debt- and worry-free.”
Already in a bit of a pickle? Start debt consolidation today and be debt-free during the holidays.