FRIDAY BRIEFING | Surviving the Christmas cash crunch

Surviving the Christmas cash crunch

If the 8% drop in Black Friday spending this year is anything to go by, consumers are hard-pressed by pressure from sky-high interest rates and inflation. 

An interest rate cut was expected in May, but traders have brought their bets forward that the Reserve Bank could make the cut sooner, in March, as households show strain. 

The average South African is facing lower take-home pay amid higher living costs, high unemployment and high interest rates. 

The country’s energy crisis is also not helping the economic climate. 

At the end of last year, short-term lender Wonga released a survey saying that South Africans were expected to spend over R226 billion over the 2022 festive period. This meant consumers were expected to budget nearly R6 000 for extra expenses over the holidays.

Everyone wants to make the holidays special, whether it be through food or gifts, or spending money on travelling, but 2023 has been hard for many, financially.

In the current economic climate, the festive season will likely be a more toned-down affair than in previous years. Not everyone can afford to put aside extra money for the holidays, especially if they don’t get a bonus. 

In this week’s Friday Briefing, with just 24 days to go to Christmas, we examine whether it is likely to be a bleak affair this year as consumers face a cash crunch. 

Dr Lumkile Mondi from the Wits School of Economics and Finance reflects on where the country is currently at economically, and why you should be tightening your belt even if an interest rate cut is on the horizon. 

We also have a submission from Smart About Money’s Laura de Preez, who writes that a richer life is one spent with those you love, doing the things you love within your means. Those moments create memories. Spend your money wisely with this in mind, remembering to save for future Decembers.

Debt Rescue CEO Neil Roets also warns against overspending. He argues that the consequences of spending more than one can afford over the festive season extend far beyond the immediate financial strain.

Finally, News24’s Lifestyle deputy editor Kaunda Selisho gives a few tips on fun ways to spend the day with your kids over the holidays – without breaking the bank. 

We hope you enjoy the read and pick up some tips so that you find ways to stay out of debt and don’t feel the full force of “Januworry”. 

Best, 

Vanessa Banton 

Opinions editor. 

Click here to listen to the full article: https://www.news24.com/news24/opinions/fridaybriefing/friday-briefing-surviving-the-christmas-cash-crunch-20231201

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