Everybody knows that December is accompanied by heavy spending. No matter how hard you try to avoid it, somehow, you will still find yourself spending so much within the month. You spend money on clothes, food (you even buy more groceries than you needed within the season), gifts, transportation and so many other things (both the necessary and the unnecessary ones).
I was caught up in this year’s spending spree since October. I wrote down all the things I needed to buy for the festive period in a jotter and kept it close to my pillow (so I can add or remove items as the case might be). My list kept growing and re-growing everyday. I even noticed there is nothing in the list for me; everything there is for others – neighbours, blood relatives, friends and close associates. I really wanted to make sure I sent out as many Christmas gifts as I could.
Each time I went through this list, I asked myself how I was going to fund it. I had believed that planning early will help me achieve my goal of sending out gifts to people that have been there for me and still be able to have enough savings for myself. But each day made me realise that it wouldn’t be possible. So I needed to cut my coat according to my cloth (I can’t come and kill myself). But I wasn’t sure of how to go about it.
To say I wasn’t disturbed by my long to-do list will be a great lie. Each time I remembered I haven’t been able to achieve a thing from the list, my heart goes flip-flop. I was literally over-thinking and unhappy until I shared my worries on my WhatsApp status and received lots of enlightening responses from my contacts.
A lot of people responded to my post with hilarious memes of how large their Christmas budgets were and how little their salaries are. Of course those memes made me feel better but my decision to cut down (or rather slash my list) came through pieces of advice from some financial experts.
The suggestions I received (and the ones I read up elsewhere) on how I could manage my finance this festive period and still save up for January included:
Budgeting for Christmas Season
Of course I made budgets for this season and that was why I came out with a long to-do (or rather, to-spend) list. But from what I understood, my list is supposed to be within the limit of the amount of money I earmarked for the festive period.
This advice is good but it doesn’t really work within Nigerian context. A good example of how this method won’t work is that most of us are going to receive last-minute invitation cards to weddings and traditional marriages by our close relatives and they will expect us to honour their invitations. These people won’t understand when you tell them that they aren’t in your budget. So, you see, you may plan yourself very well and still be caught up unawares.
Make your Purchases Early
Everybody knows that Nigerians increase the prices of commodities during the Christmas period (when they are supposed to give promos). So it will be better to make some purchases early so that you don’t get yourself caught up in the price hikes.
This method is good if you are purchasing non-perishable goods like rice, vegetable oil, clothes, shoes and the rest. But you can’t buy meat, tomatoes and other perishable commodities early.
Cut Down on Expenses
Someone said here that I should make sure I don’t spend more than I earn. This is very necessary, especially for those of us that made long lists of things to buy. This season has a way of making people spend more than they have. I believe it comes from seeing others spend theirs and the expectations of people close to us. But, if we keep hammering it into our heads to cut down on expenses, I believe we will spend less.
Save for January
January is always the longest month of the year because a lot of people have little fund to see them through the month. The Christmas celebration has its way of getting the best of people and eating deep into their pockets. For this, people need to save for January.
Someone said that those that can’t help spending whatever they have should consider investing in money market funds, which they can withdraw in January. Another person said the best way to save for January is by moving a certain amount of money into an account that has no ATM card so that you don’t force yourself to withdraw it during the festivities.
I buy both ideas; they are good. But, the best way to save is by disciplining ourselves. If you lack discipline, you will still withdraw from those accounts within the period.
Creating an Emergency Account
I learnt this from Toyin F. Sanni, the Group Chief Executive Officer of Emerging Africa Capital Group. She advised that everyone should have an emergency account that should be fed every now and then. She said that this account should be fat enough that, in case of job loss, it will feed the owner and his dependents for a minimum of six months.
Now, just as in the case of moving money into an account that has no ATM card, there is still a need for discipline for this emergency account to work.
All these suggestions are good, but they failed to solve the problem of how we can spend the little we have in order to show appreciation to people that have been there for us throughout the year. I believe it is important to show gratitude to these people as the year runs out because we still need them in 2020. An article on how we can spend little to achieve greatly within this Christmas period will be posted later.