‘Tis the season of annual leave, Christmas gifting, and school holidays. For most of us, this means that a whole new budget needs to be drawn up to accommodate all the once-off expenses that come with these perks of the season. Rather than ruining your credit score on a month of lavish spending, it is advisable to set up a budget before December starts so that you do not have to resort to purchasing everyday items on credit and start the New Year under undue financial pressure.
To help you budget for the month ahead, Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, lists some of the expenses homeowners will need to make room for over the holiday season:
Factor in the interest rate hike
“Last week the Monetary Policy Committee (MPC) announced that interest rates would increase by 25 basis points, bringing the prime lending rate up to 10.25% and the repo rate to 6.75%. This means that your instalments on your home loan will increase as of 01 December. Falling into arrears on your home loan is a dangerous slide towards financial ruin. If you are really struggling to keep up with your payments, perhaps consider renting out a room in your home if you have the extra space. Alternatively, you should consider downscaling, but this should be done before you reach a dire point in your finances which would lead you to accept low-ball offers out of desperation,” Goslett warns.
Eating through your grocery budget
“Particularly for those who are taking a few days leave over this period, be prepared to add onto your grocery budget. The tendency to snack increases when you are at home and within reach of your fully-stocked food cupboard. The festive season also encourages us to indulge and give into our food cravings, which means that you’re likely to stock up on all kinds of snacks that you normally would convince yourself you don’t need. If you are inviting people over to enjoy meals together, this will also have an affect on your spending habits,” says Goslett.
Super-charge your electric bill
“Along with the tree and the stockings, Christmas lights are an integral part of setting the Christmas spirit. Depending on how often you plan to switch these on, along with any other electric decorations (singing Santa’s, glowing reindeers, and the likes), you should be prepared to spend more on your electric bill over December. For those who don’t celebrate the holiday, it is likely that their electric bill will also rise if they’ve taken leave over this period. Being at home means that they are likely to use electric devices more often than when they are at work all day, from switching on fans and air-conditioning units to watching more television and cooking bigger meals more frequently – all of which will increase your electrical usage.” Goslett warns.
Stocking up on cleaning supplies
“For those who plan on hosting house guests for the holidays, you should also budget for the extra cleaning supplies you are likely to use in preparation for their visit – especially for those who are hosting demanding in-laws. It is likely that you will purchase expensive scented cleaning products over this period to make your home look and smell sparkling clean. Even if you aren’t planning on hosting guests, having time at home might inspire you to tackle some cleaning projects you don’t have time for during the rest of the year,” says Goslett.
For pet-owning homeowners who are planning on travelling over the holidays, Goslett reminds them to budget for pet-sitters or holiday kennels. “Holidaying homeowners should also remember to make sure they have enough electricity and non-perishable food at home so that they do not return to a dark home with nothing to eat. The last thing you want to do on your way back from a long drive or flight is to stop at the grocery store, so be sure to budget and plan for this before you leave for your trip,” Goslett concludes.
To get in touch with a real estate professional who can help you find the gift of the perfect home this festive season, visit www.remax.co.za.