Balance the books this Christmas

Next week we celebrate yet another Christmas Day. And, whether you will be having a “low key” celebration or otherwise, the fact still remains that during this time of the year, you will be spending more than you normally do.

The reason for this, however, is not far-fetched at all as whereas Christians in general celebrate the birth of Christ exchanging gifts, to perhaps symbolise what those who first saw baby Jesus did, others believe that it is just proper for one to show love and appreciation to those who have supported them during the course of the year, by giving away nice presents.

So the norm now is; exchange gifts on Christmas Day! And it doesn’t come cheap though.

This means that you must exercise caution with your spending as it is very easy to fall over; landing into serious debts in the process, and ruining your start of the new year.

It is all too easy, again, because at this time of the year a lot of money marketing companies intensify their advertising campaigns to increase their loan portfolio, coming up with many seemingly juicy loans and credit deals.

You can easily fall for the bait because you need cash to spend on friends and relatives during this period.

If, however, you remember at all times that there is nothing like free cash, you will become a bit more cautious before taking a loan and signing up for other credit advances; if you remember also that your life does not stop after the Christmas celebrations, you will be concerned about how you spend the savings that you have accumulated throughout the year, and if you pause a little to reflect before you buy your gifts, you will notice that you can still have good gifts but at bargain prices.

The trouble with many is that they often try and go the extra miles, sometimes borrowing huge sums of money to buy presents to impress others. The sad reality also is that sometimes most of those who receive the gifts don’t even care anyway!

If you are really fond of getting yourself into trouble every Christmas by getting into a “spending overdrive”, this year you may have to look at things differently.

There is every reason for you not to get around in the “business as usual” mode. There is certainly no need.

This year especially has been a tough year for both companies and individuals, and l guess you did notice it too.

Whereas companies have had high cost of utility bills and other incidental costs to grapple with, increasing their cost of operations and therefore reducing their profit margins, austerity measures introduced by the government, especially with the introduction of full cost recovery in the provision of certain products and services have had consequential effects on household budgets and disposable income.

The net effect is that low disposable income has led to low demand of goods and services and in turn a much lower high street sale for companies and industry and finally low employment. The cycle can go on and on.

Do you need any more reason(s) as to why this year has been different? I don’t think so. So with this proof, why would you want to continue in the usual fashion? Listen: The government recognises this too, in case you had any doubts.

Committed to ensuring that the public purse is protected and used for the intended purpose that serves the nation well, the government authorities have reminded heads of ministries, departments and agencies not to use public funds to buy Christmas gifts.

Indeed, a step that is in the right direction. With tight household budgets and incomes, it is certainly not prudent for the tax payer’s money to be spent on gifts for others when many such taxpayers will not be able to afford gifts for their children.

You must therefore adopt this act by government to balance the books. You can have very simple plans that can involve promising not to borrow money to spend on gifts. In effect, spending part of what you own and not spending other people’s money secured through bank loans.

President John Mahama thinks there are challenges meaning that there is the need for some changes to be made. That means we need to alter our habits a bit too.

“There are some things you’ll have to do when you are faced with economic challenges”, the President said in a recent interview with an international TV station, admonishing that in situations of that sort, there is the need for one “to put on the brakes”.

His brakes are the austerity measures introduced. So the natural reaction is for you to take a cue and tighten up.

Well, with the extended family system, which comes with its own support and dependency situations, it is during festive periods that we go overboard with our spending.

My advice is that to prevent financial hangover in 2015, be firm and spend well.


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