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Are You Ready For The End Of The Year?

It might seem strange to talk about the end of the year already, but time flies and if you are to avoid dropping out of the debt review process at the end of this year, you need to prepare for it now.

A lot of consumers, both outside and in debt review, struggle to deal successfully with the end of year madness that December brings.

For many, it is a month where you earn less or where you are paid early, and then have to stretch your funds until the end of January. Most people find the gap between their two pay checks hard to navigate, especially with so many reasons to spend more.

This is made even trickier, when you can’t just reach for the credit card to make it through.

If you are under prepare and over-spend, you may find it hard to make your restructured debt repayment, and could lose all the protection of the debt review process.

So, what can consumers do now to prepare for December?

Earning Less

Some industries close early in December, which is great for relaxing and re-cooperating, but not so good if you are paid by the hour or day. It can seriously impact how much you take home in December.

Similarly, January can be the same, with some businesses only opening a couple of days into the month.

How do you cover your costs when you are earning less?

One thing you can do right now, is figure out what you are going to need to make it through December. With that figure in mind, you can look at how much you are probably going to earn, and if you see that you will not have enough, you need to make some plans.

For example, you might try to set aside a little over the end of October and November, in advance, to help bolster your December income.

You might also make plans to do some small jobs or sell some things to make a little extra cash over that time of year. Line up those clients now, to ensure you have what you need, come December.

Paid Early

Money tends to burn a hole in our pockets.

You will probably find that you spend most of your money in the first few days after you get paid each month.

‘Money tends to burn a hole in our pockets’

If you are paid early in December, this could also cause some issues. We may end up overspending too early in the month, and not have enough to cover our obligatory debt repayments later.

Missing that payment will throw your whole world into financial chaos.

What you can do is speak to your Debt Counsellor in advance about making your regular debt repayment earlier too. This can help you avoid temptation and problems.

Holidays & Gifts

Some parents like to reward their kids for doing well during the school year. Others give gifts as part of religious holidays at the end of the year.

These additional costs do not fit in your usual monthly budget, and it may be hard to suddenly find the extra cash.

If you are going to have some extra expenses, for whatever reason, in December or January, then it is good to save a little over the next pay days to help make that possible.

Alternatively you can focus on more affordable gifts or activities to reduce expenses.

School Holidays

When your kids are home, it’s easy to end up spending more money to keep them amused.

But it can quickly make a serious dent in your purse or wallet.

If money is tight, have an honest chat with your kids in advance, and try to focus on low cost fun activities, such as heading to the beach or a walk in nature. Hanging around with friends can be fun, and doesn’t have to break the bank.

Advanced planning is your friend. You can even pool your resources with other parents to help share expenses.

Count The Cost Before You Commit

It might have been your habit to go away every December, or to join family far away for some relaxing time.

While this is very nice and totally enjoyable, you may need to properly evaluate if you can realistically afford it this year.

If you add up the cost and realise it can’t be done, then perhaps think about asking them to come to you, or to meet you half way to reduce travel costs.

Explore options like staying with friends, rather than paying for accommodation, or even consider delaying the trip for a future date when you have saved up enough.

Don’t over-commit and put your entire financial future in jeopardy for a few days away.

End of Year Impulse Spending

It is not uncommon for your friends to suggest something fun while you are hanging out in December.

But, it may be something that causes you to spend money you had not planned to. It may be an ice-cream on the beach or a trip to the movies.

Beware of impulse spending while on holiday. It can be fun to just forget about your financial pressures and spend without thinking, but even small impulse purchases add up.

What can you do now to avoid overspending?

It is a good idea to plan for unplanned spending.

‘you deserve something nice (as long as you can afford it)

That’s right, if you know that you are going to be relaxing with friends and family, why not adjust your budget over the next few weeks to make sure you have a little set aside for random fun purchases? After all, you deserve something nice (as long as you can afford it).

Bonus Time

Though it is perhaps unlikely, you might be one of those very few who get a small bonus in December.

Some companies even split bonuses across December and January.

If this is the case then sure, use a little of the bonus for some fun. But also consider what else you could accomplish with those funds.

You may be able to settle a smaller debt that is almost paid off. Chat with your Debt Counsellor about that.

You may be able to take care of things you have neglected, like a car service or new tyres that will make driving safer.

If you have kids, you may be able to set some of the funds aside for the scary amount of January school related costs that come along.

Have some fun, but also chat to your Debt Counsellor about how best you might use some of these funds.

If You Fail to Plan, You are Planning To Fail

Planning ahead for any added pressures that December or January bring you, can result in a relaxing year-end for the whole family.

All it takes is a few quiet minutes with a piece of paper and a calculator.

Why not do that right now?

Stop reading and think about it.

Work out when you will be paid and how much. Figure out what extra costs you might face, and then plan for how you can set aside funds now for when those expenses arrive.

That way you can have a relaxing end of the year, instead of a stressful one.