Interview with Hardi Swart, CFP® by Nompu Sizibaon SAfm Market Update with Moneyweb
Publication: 11 November 2019, Moneyweb
Avoid the Black Friday trap, budget, and don’t spend January’s money: Hardi Swart –director, Autus Private Clients.
NOMPU SIZIBA: Overspending in December is a consumer pitfall that many fall into. It’s holiday season. Some have got their bonus money and they are feeling a bit generous, and so on. But it’s easy to get carried away by the mood and overdo it. Of course, January comes out of nowhere soon thereafter, and the routine of bills and extra expenses like school fees, stationery and uniforms kicks in.
So, being prudent in the so-called silly season is worth a try. To give us some tips on how not to fall into the feel-good trap, I’m joined on the line by Hardi Swart, a director at Autus Private Clients.
Hardi, it’s been a tough year. We’ve all been working terribly hard under tough economic conditions, and we have a little extra cash to play with. How do we balance our need to say, “Well done for working hard this year,” to ourselves and our families, while at the same time being mindful that next year’s expenses will be barking just around the corner?
HARDI SWART: For sure, Nompu. I think the biggest thing is we are all very excited that it’s a time for family and friends, and spending time with the people we love.
But I think our biggest concern is we should be careful of not spending money that we don’t have, specifically spending money on the credit card or overdraft facility. It’s money that actually doesn’t belong to you; it’s more the bank’s money.
What I would recommend is, if you are planning on spending money over the silly season, over the holiday season, focus on preparing a sort of budget for December, so you know where you can spend money, and you don’t need to worry about expenses creeping up on you.
NOMPU SIZIBA: Presumably that budget that you are talking about is a budget that you should have prepared earlier in the year, because December is but one month, and you will have needed to build up enough resources to cover any fun that you want to have in December.
HARDI SWART: Yes. Presumably that’s correct. But unfortunately most people keep off their budget – that’s unfortunate. But I still believe, even if you haven’t kept a budget for the year so far, it might be a good time to have a look at your expenses over November and then, based on that, with a few tweaks of course, budget for December and all the great times you’ll have.
NOMPU SIZIBA: You have a few pointers on how consumers can still enjoy the festive season but not spend a fortune – like nice home-cooked meals as opposed to going out, for example. Just share some more tips with us.
HARDI SWART: For sure. One thing that we do in our friend circle is, instead of everyone buying everyone else presents, we have this sort of nomination where you nominate a person that you are going to buy a present for. So, everyone buys for one other person, instead of everyone buying for each other. That’s one way to save money.
Another way, of course, is just by being vigilant and, instead of, like you just said, going out and spending at a restaurant, maybe just go and buy food, cook at home, and just have an amazing time spent with family; the preparation of the food will also crate memories. That might also be a very good idea.
And then the other thing also is to think twice before making a purchase. I know it’s extremely difficult, especially if you walk into the retail store and there are all these bright lights and Christmas decorations and the festive music playing. Just think twice before you buy a present or unnecessary items.
NOMPU SIZIBA: Of course, when you are holding your budget paper in hand, it’s going to be easier to do that, isn’t it?
HARDI SWART: For sure it is. It’s going to help you to think twice before you make any silly decisions.
NOMPU SIZIBA: Hardi, what about when it comes to holidays away from home? How can households make those more affordable – what factors would they need to consider?
HARDI SWART: Nompu, I think saving the price of a holiday at home as well, setting up a budget and being vigilant about the amount your spend. Maybe doing something like putting up a daily budget for yourself, so you know while I’m on holiday out of the home this is a budget for each day. And if I’ve save a little bit today, then I can maybe spend that tomorrow. But always be aware of how much money you are spending in this time.
NOMPU SIZIBA: Black Friday has created some issues in the whole retail sector and among consumers, with people splurging at that time to try and catch a bargain. What’s your advice to consumers for that particular time at the end of November, which is of course just before the festive season?
HARDI SWART: I think my biggest concern with regard to Black Friday is that a lot of people, because these things are on sale at ridiculous discounts, often buy items they don’t really need just because they are on sale. So my suggestion would be to sit down and think what you really need and, if that is on sale, buy it. But don’t go to the stores just because there is a sale, because you’ll end up buying a lot of items that you don’t necessarily need or you are not going to use.
NOMPU SIZIBA: Hardi, on a more sombre note, you have some further advice for the listeners, especially for those travelling during the festive season.
HARDI SWART: For people travelling on the road and so forth, it’s very important to make sure that your financial affairs are in order before you go on holiday, because we all know a lot of accidents happen. Make sure, especially, that your will and testament is in place. If something unfortunate should happen, then you’ll have peace mind that all the necessarily documents are in place.
NOMPU SIZIBA: Thank you very much, Hardi, for your festive tips this evening.