Your brain is pounding…the room is spinning…your heart is racing…yup, we’re talking about the dreaded hangover, folks.
But we’re not talking about your regular, run-of-the-mill hangover…we’re talking about something a little more painful: the financial hangover.
And trust us, there ain’t no Panadol or Nurofen that can fix this one.
Wait. What exactly is financial hangover?
A financial hangover happens when you spend a ‘lil too much over the holiday period, and you wake up in the New Year with a small bank balance…but a big bag of unwanted gifts.
So let’s avoid the financial hangover in 4 simple steps
1. Make a budget – and stick to it
Like drinking a glass of water between each gin and tonic…making a budget is your #1 tool to steering clear of a financial hangover.
That means budgeting for:
- Socialising (aka your work Christmas party, Friendmas, beach hangs)
- Gifts (use this guide to help you)
The 50/30/20 budget rule says you should dedicate 50% of your after-tax income to entertainment, so try and keep the above categories within that 50%.
2. Shop with a list
When you go grocery shopping without a list…you can run into trouble.
It’s the same deal with Christmas shopping. Always be prepared with a list for what gifts you need to get. By setting a list, you’ll already know how much the items cost, and whether they fit into your budget. And the bonus? You can be in and out – no need for dawdling!
3. Sell your junk – before it piles up again
Have a look around. What do you have? An old iPhone? Some old gym weights? What about some home decor you’re not into anymore? Get on Gumtree or eBay, and start selling. It doesn’t take long – and it can help you clear out your house before it fills up again after present exchanges.
4. Switch to cash
Credit cards, debit cards and buy now, pay later platforms making spending online simple (some would say…too simple)…And this can also lead to us spending more than we originally planned to.
So this year, go card-less. When you head to the shops, take out enough cash for what you need and ditch the card at home. That way, you can only spend what you’ve got, which eliminates the risk of overspending.