John Manyike, Head of Financial Education at Old Mutual
With October’s sharp fuel price increase, consumers should start planning now for how far their money will need to stretch over the festive season.
Higher fuel prices affect more than the cost of filling a tank. Transport inflation rose 8.8% year on year in August, while annual headline inflation increased to 4.4% and food inflation to 1.1%.
Old Mutual Head of Financial Education John Manyike says these developments should prompt consumers to review their festive season finances now, rather than wait until December.
“The festive season may still feel some distance away, but financially it is time to prepare. When pressure builds in areas such as fuel and transport, we should ask what we can do now to make sure our money is working towards the things that matter most,” says Manyike.
“We cannot control the price of petrol or the global economy, but we can control how we respond. Starting early gives us more room to adjust, rather than facing difficult decisions once the money has been spent,” he says.
Consumers should take stock of what is coming in, what is committed, and what remains after essential expenses and debt repayments. They can then plan for travel, fuel, food, gifts, entertainment and family commitments, while setting aside enough for January expenses.
“A festive season budget should start with what you can afford, not what you would ideally like to spend. Once you know what is available, decide what matters most and plan around that,” says Manyike.
Consumers planning to go on holiday during the festive season should start booking early for flights and accommodation and planning their itinerary to cash in on early booking discounts. As brent crude continues its volatility, flight or bus costs might become more expensive for holiday makers who book late.
The same level of early planning is equally important for those expecting visitors during the festive season. Your biggest costs would be food, electricity, entertainment and transport costs when you are hosting a big family.
In the weeks ahead, consumers can review discretionary spending, reduce or postpone non-essential expenses, save for known festive costs and avoid unnecessary debt.
“The earlier you start, the smaller the adjustments may need to be. Several small decisions over the next few months can create meaningful room in your budget by December,” he says.
Manyike cautions consumers not to let others’ expectations dictate their spending.
“There is no single definition of a successful festive season. The important thing is that the experience fits within your financial reality,” he says.
“The goal is not simply to get through December, but to enjoy the festive season while still meeting your responsibilities in January,” says Manyike.
“Do not wait for December to tell you what you can afford. Know where you stand, decide what matters most and adjust while you still have time. You may not control the price at the pump, but you can control the decisions you make around it,” Manyike concludes.
ENDS
