PAYBILL: 151987

9 Financial Mistakes To Avoid This Christmas

Posted on 2017-12-11
9 Financial Mistakes To Avoid This Christmas

There is no doubt that the Christmas season is one of the most anticipated holidays of the year. A time to spend with family and loved ones. A time to let loose and celebrate.

Well that time of year is upon us again and there is already excitement in the air and especially with life slowly going back to normal after the long electioneering period in Kenya.

Though this one holiday that excites us all, it comes with a few downsides; one of which is the state it leaves our finances in once it is over.

Everyone will admit that at one time or the other they have spent a little more than they had planned to over the Christmas holidays. It is a common saying in Kenya that January has over 60 days pointing to the financial squeeze that most find themselves in after over spending in the month of December.

In the spirit of celebrating and making merry, we make financial mistakes that set us back and leave us struggling in the following months. Well we saw it fit to highlight eight of the most common financial mistakes we all make over this festive season and how you can avoid them.

  1. Not having a budget
  2. For the average Kenyan, the December salary is usually the same one expected to cover expenses for the month of January. This means one cannot afford to spend arbitrarily but often times this what happens forcing you to take out money from areas that should have been left untouched, for example savings.
    To help you keep a reign on you expenses therefore, a budget is needed. A budget is a guide to what you need and how much you will spend on that thing.
    A budget will also help you keep a track of your expenses. For example say you want to have a party for your family and friends. The budget will outline everything you need for the party and how much you will need to make it.
    Without a budget, you may end up buying things you may not even need and spend money that would have otherwise gone into something.

  3. Failing to stick to the budget
  4. wallet

    So you have created this brilliant budget and if you stick to it you might save some money this year round. That is great but it means nothing if you do not stick to it.
    Different factors can lead to you not sticking to your elaborate and well intentioned budget. You could walk into say Garden City or Two Rivers or any other mall of your choice and realize your favorite clothing store has a mega sale. In that moment the budget might become irrelevant but you need to remember why you created it in the first place. The point is to avoid impulse purchases so stick to the budget as tempting as the mega sale is.

  5. Not having any insurance cover
  6. You may ask why we talk about insurance cover in the at Christmas time? Very simple, during the good times we tend to forget that bad times and bad people also exist. Take for instance, during the holidays we always a spike in road accidents in Kenya with alarming death toll. As people leave the towns for the villages, with all the merry making and drinking there is always road carnage. Having the right car insurance cover in Kenya can ensure your valuable asset is secured. Home and domestic package contents insurance is yet another one that you need to take for your household. As the season approaches, criminals use this time to cause havoc in residential neighborhoods as most occupants have either travelled or are lax about security.
    umbrella Lastly, a medical insurance plan in Kenya will no doubt come in handy.During the season, there is a lot of eating far and wide and many will end up in hospital for checkups from things like food poisoning and stomach complications. Travelling up country also tends to cause a lot of Nairobians especially kids all manner of fevers, coughs and small disorders.

  7. Spending more than is planned for to please others
  8. We all give in to pressure from our peers, family and basically society when it comes to some matters. To put it into context. Imagine a situation where all your friends have decided that since it is Christmas and practically the end of the year, they will go to one of the high-end restaurants in Nairobi for a six course meal. You are aware that the entire experience will cost you more than you would have been willing to spend to ensure your finances are not left in disarray.
    In such a case, be willing to say no to remain on course with your financial plans. The same applies to gifts. Being a season for exchanging gifts, do not feel the need to go overboard on spending for a gift. Buy what you can afford because the thought is what counts.

  9. Not planning for the holidays all year long
  10. You have known all year long that Christmas will be coming but you have not taken time to plan for it. The likely thing to happen is that when it does come around, you will try to fit everything that comes with the holidays on a tight budget. And it is also likely that you may over extend in the spirit of festivities and forget that the same amount of money needs to cover other expenses.
    So how can you best avoid being caught up in this situation? Plan ahead. Even if it is just two months to the holidays, have a plan on what you want to do for the holidays and how you will go about doing it.
    currency If for example you want to take the family for a couple of days in Malindi; do not wait for you to be paid the December salary so that you can take that trip with that money. I am sure the decision for that trip was not a sudden one so save towards it. Plan and save for the expenses that are going to be incurred. Calculate how much will be needed for transport, for food and accommodation and the sight seeing.

  11. Relying on the end of year bonus
  12. Most companies usually give their employees an end of year bonus as a way to show appreciation for the work they have done all year.
    In most cases when people get a surplus in the amount of money they usually receive, they often do not plan on how to spend it. The danger with not planning is that you cannot track your spending so there is the risk of over spending and even go into a deficit.

  13. Not thinking of January
  14. The holidays have a way of making us thinking that it will never end. The festivities have a way of making us forget that there is a life a head that needs us to plan for.
    So as you celebrate Christmas and go on road trips, remember that January will be waiting on the other side and your next pay check will come at the end of January and not at the end of the holidays.

  15. Not comparing prices
  16. santa

    The beauty of the holidays is that there are deals everywhere and though that can tempt one to overlook their budget and overspend, it can also work in their favor. Double check these offers, many shops and websites give promotions around the holidays but there is a lot of psychological manipulation behind these, geared solely to get you to spend your hard earned cash.
    The thing about deals is that stores try to outdoor each other so use that to your advantage. Before going out to do that massive Christmas shopping. Do a little of window shopping and compare prices and you might be amazed but just how much you end up saving.
    If you do not compare prices, then you might end up spending a certain amount of money only to realize you would not have spent as much on the same items had you shopped at a different store.

  17. Trying to out-do yourself from the previous year
  18. Sometimes we have this idea about how we want our holidays to turn out but they do not live up to expectation. Then you promise yourself that next year will be bigger and better. If you do not plan to actualize this idea you have of making it a better holiday then it is likely you will hurt your finances in the process.
    Moral of the story is, celebrate within your means and do not forget there is a life after the holidays.

    Merry Christmas.

Back to all posts

Popular Posts

Email Subscription

Get In Touch
1st Floor, Rhapta Heights,
Rhapta Road
Nairobi, Kenya

Our Partners



IRA Registration