Don't let debt ruin your festive season

THE FESTIVE season can be a real financial buzzkill! Overspending on gifts, food, and fun can lead to a January blues hangover, leaving you feeling stressed, anxious, and, let's be real, a little guilty. The pressure to keep up with the Joneses (or in-laws) can be overwhelming, but remember, debt is like a grinch – it can ruin the holiday cheer!

Take control, set a budget, and prioritise joy over joy-riding credit card debt. Your mental health (and wallet) will thank you!

According to JJ van Wyk, Financial Adviser at Momentum Financial Planning, "Financial management is one of the most underemphasised components of comprehensive financial planning, despite having a disproportionate impact on mental health."

Positive financial behaviours like regular saving and paying credit card balances on time are linked to improved mental health.

Actionable tips to reduce money-related stress and anxiety:

1. Create a simple budget

Use the 50/30/20 rule: 50% for needs (rent, utilities, groceries), 30% for wants, and 20% for savings and debt repayment. Consider engaging a financial adviser to help you understand your financial situation and instantly reduce ambiguity and anxiety. A budget helps you track your expenses, identify areas for improvement, and make informed decisions.

2. Build a small emergency fund

Start with a modest goal, like one month's expenses. This buffer is primarily a mental health tool, ensuring that a small, unexpected expense doesn't derail your stability and trigger a panic spiral. Aim to save three to six months' worth of expenses for added security.

3. Tackle high-interest debt

Use the "snowball" method (pay off the smallest debt first for a quick win) or "avalanche" method (pay off the highest interest rate first to save money). Focus on paying off unsecured debt, like credit cards or short-term loans, to free up cash flow and reduce the mental burden.

4. Automate good habits

Set up automatic transfers for your savings and debt payments. Removing the need for constant decision-making makes good behaviour habitual and reduces the mental energy you spend on finances. Take advantage of employer-matched savings plans, like retirement funds or savings schemes.

5. Schedule a "money date"

Dedicate 15-30 minutes once a week to review your bank accounts, pay a bill, or check your savings goal. Approach this with curiosity, not judgment. This practice prevents financial anxiety from festering in the dark and keeps you proactively in control.

6. Utilise the services of a financial adviser

A financial adviser provides objective expertise, acting as an important support system and partner to help you navigate complex financial decision-making and tracking. This reduces the mental fatigue associated with financial planning and ensures you're making progress towards your goals.

By taking control of your finances, you can reclaim your mental peace and enjoy the festive season without the weight of debt.