The long awaited festive period is finally upon us. With it comes merry-making, shopping for Christmas and New Year’s, that well-deserved treat; either a holiday or outing and, that special meal, among others. All these are very costly, so to speak and so deplete your savings in a day or two, if you are not cautious and plan your festive season expenditure.

Financial experts warn against extravagancy and impulse buying during this period, arguing that spending money saved for the past 12 months within a week or even a few days is recipe for financial hardships in the New Year.

Therefore, spend your savings wisely and ensure to put aside some money to cater for emergencies and keep your family running smoothly after Christmas.

After all, remembering the birth of our savoiur does not call for irresponsible expenditure or drinking oneself silly in the name of Christmas or celebrating New Year’s Day.

Worse days could be just around the corner if you engage in reckless spending to keep up appearances or because of the bandwagon influence.

Claude Ngendahimana, a Kigali-based financial analyst, says watching one’s expenditure this month is even more important, especially for salaried workers that are likely to be paid this week before Friday and then at the end of next month.

"This almost a 40-day wait for those that do not have side income, which could be a long and stressful wait if one spends all their money during the festive season without a fallback plan,” he says.

Therefore, be wise enough and spend within your means to avoid the January blues.

Pay January bills first

Humphrey Ngotho, a senior relationship manager at Equity Bank Rwanda, says spending within your means will see you smiling come January.

"Regardless of what other people say, since you only have the money for that month, spending it for a day or two is foolhardy. Remember, the money is supposed to take you through an even long period of close to 40 days.

"Therefore, prioritise the needs, including paying rent, water, electricity and other monthly bills that can’t be postponed. After you have put this money aside, you can then use the balance to budget for Charismas or New Year’s expenditure. After all there, will be another festive next year,” he argues.

He says this approach will help you sail through the festive season without incurring unnecessary costs or incurring debts.

However, it is important to understand that drawing a budget and following it religiously will enable you stay out of financial quagmire and start the New Year on strong foundation, according to Ngendahimana.

"One needs to be financially disciplined and to sacrifice a lot to avoid going into the red. For instance, setting limits on what to buy is good preventive measure that will secure your savings. Budget your income according to your festive season needs and those of January so that you are able to stay within the limits and even save some cash,” he points out.

He adds that if you income is already planned for, there is no need of straining yourself organising parties that will leave you broke and set you on a wrong financial footing next year.

Ngotho cautions against impulse shopping, saying that it is essential that you carry your credit/debit card or cash only when you want to buy something planned for earlier.

"Also limit your shopping time to avoid being tempted to buy stuff that you never budgeted for,” he says.

Georgette Gatesi, a financial expert in town, says one always requires a lot of money in January, especially for school fees, noting that wastefulness expenditure over the festive season could create a debt burden.

Gatesi argues that some people save for the festive season, saying, in such a case one will only use the money put aside for that purpose. However, as you make merry and take more bottles of beer or favourite wine, remember that there are bills to pay at the end of the month and next month.

So, to safeguard your cash and keep your lifestyle throughout this Christmas and New Year’s Day, spend within your means and only for budgeted items. In addition, resources are always scarce, while needs are insatiable.

Therefore, the trick to ensure financial health and wealth accumulation is through budgeting all your expenses and developing discipline to spend according to budget. This way, you will forever avoid the debt rut.

A Merry Xmas and A Happy New Year, 2017.business@newtimes.co.rw