After a long and hectic year, working South Africans are looking forward to some time off with loved ones. Many of us also get some financial breathing-room at this time, thanks to year-end savings payouts, bonuses or 13th cheques. It’s also when we plan to start the New Year with resolutions to get into better physical and financial shape.

The reality is that these plans to get fit often come to nothing. Every January finds many of us regretting our spending sprees and festive binges.

John Manyike, head of financial education at Old Mutual, says: “Too often, South Africans who’ve worked hard throughout the year end up being pressured to overspend. Many succumb to aggressive marketing and clever advertising to buy stuff they don’t need to impress other people.

“Buying stuff we don’t need becomes a real problem when it means we can’t afford the stuff we do need come January for expenses like school fees, uniforms and text-books.”

There are some direct correlations between physical fitness and building personal wealth. Neither can be achieved instantly and both hold long-term benefits for you and your family if you’re willing to stick to basic principles.

“It’s never too late or too early to start getting into shape and to get advice on financial planning.”

Good personal financial management and financial advice is more important than ever, points out Manyike. “The most recent Old Mutual Savings and Investment Monitor found that more than 80% of working, metropolitan South Africans want help on how to save.

“The pressure to ‘splash out’ can put breadwinners and especially parents in an unenviable position. Some breadwinners spend their bonuses excitedly before they’ve even been paid and end up in more financial trouble than if they hadn’t been paid a bonus at all.

“Many – too many – feel it’s easy to spend on credit and deal with the consequences in January or February,” says Manyike.

This can be hard on relationships too, he adds, especially when one partner is more careful with money than the other. “The cautious one can end up feeling like a killjoy who’s always saying no.”

It’s not only marketers who are putting pressure on people to spend. Youngsters who expect the kind of gifts their friends get, or expect expensive holidays, put pressure on parents who don’t want to disappoint their children or make them feel neglected. This can trap families in a spiral of high interest and debt, and can even lead to blacklisting, garnishee orders and repossessions.

One way to try to avoid this is to enlist your family’s help: “Kids can be subject to peer pressure and pass that on to their parents, who end up feeling they’re depriving their families by not splurging.

It can be a difficult conversation and it can initially lead to tears and tantrums. But it’s worth working through this. Instead of being badgered into buying new cellphones, for example, keep using the same ones and save up for a seaside holiday or something the whole family can enjoy.

But more importantly, says Manyike, turn budgeting and being debt-free into a family project. “This may require a complete turn-around in your attitude towards money, from ‘spend-first-and-save-the-rest’ to ‘save-first-and-spend-the-rest’.”

He suggests the following steps, adapted from Old Mutual’s On the Money financial education programme.

Where am I?

· Make a list of what you spend. Nowadays, money can seem unreal, just a swipe here and there and a number on a screen. Many of us know that we’re overspending, but hide from the ugly truth.

· Write down your fixed expenses: rent or bond repayments, insurance premiums, school fees, union membership fees.

· Now list your variable expenses: food, transport, rates, cellphone, clothing and entertainment. Don’t sabotage your efforts by underestimating costs.

· List your irregular expenses: car maintenance, home repairs and so on. Try to work out an average monthly cost. Again, if in doubt, it’s better to overestimate slightly than get caught short.

· Add them up. If they total more than your earnings, you need to act. But even so, pat yourself on the back: now that you know exactly where you are financially, you’ve already put yourself in a stronger position.

Back in the black

· List your expenses in order of importance. You need accommodation, transport and food. Apart from that, ask yourself whether an expense is crucial, or whether it can be cut out. Typically the items that can be eliminated will be things such as entertainment and clothing.

· Use the money you’ve saved to reduce your debt, especially credit card and store card debt, which carries high interest.

You’ve got the power

· Once you’re debt free, establish a basic emergency fund for unexpected expenses. A month’s salary is a good start. While it may take a while to build up, it’ll give you a real sense of security once you have it. Many people are just one month away from poverty because if their salary was not paid for a month, it would take nearly 12 months for them to recover financially.

· Invest some money each month for your long term and medium term financial goals, like saving for your retirement and your kids’ education. This excludes your employer’s pension scheme or your own retirement investments. A financial adviser can help you.

· Empower yourself with knowledge: Old Mutual’s free On the Money programme helps people develop clear and specific plans that are realistic, achievable and inspiring.

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