In describing how most people manage their finances over this period, ‘The Silly Season’ couldn’t be a more appropriate clue.
We all like to think of ourselves as smart, rational people who make sensible decisions that serve our own best interests and the wellbeing of those we love. But ‘smart’ and ‘rational’ are not words I would use to describe human behaviour over the festive season!
Words like, ‘irrational, impulsive, short-sighted, frenzied, conditioned, bizarre’ and even, ‘foolish’ spring to mind a whole lot easier and the fact that this time of the year has become widely referred to as, ‘The Silly Season’ is a strong hint that I may be onto something here.
In describing how most people manage their finances over this period, ‘The Silly Season’ couldn’t be a more appropriate clue.
Consider this... most employees receive their bonus over the festive season and they tend to receive their salaries earlier than usual, meaning that people have more money at their disposal early in December than at any other time of the year. Logic says that overall, their coffers should be filling and debts reducing during this period, but the reality is quite different... coffers empty and household debt soars.
Is this an unavoidable function of 21st century living, or just a destructive social trend and bad habit that few have stopped to question?
The 2008 global financial crisis was a warning to individuals, organisations and world leaders that the irresponsible use of credit today comes with devastating consequences tomorrow. Since then, a small but growing number of people have started taking this warning very seriously and are breaking away from the herd, defying their social conditioning, turning their backs on mutated tradition, to avoid falling off the cliff of financial despair that the masses are heading for.
These are the smart people and rather than allowing their financial decisions over the festive season to be dictated by guilt, instant gratification, habit, obligation and conformity, which is leveraged by the media, upheld by tradition and promoted by social pressure, they’re taking back control and making smart financial decisions.
Are you being smart with your money this festive season?Take the Acid Test below to determine whether you’re making smart or silly financial decisions this festive season.
|
# Smart Financial Decisions |
# Silly Financial Decisions |
| 1 |
Bonus used wisely to pay off debts, build financial reserves and grow investment portfolio |
Bonus used impulsively to buy lavish gifts, pay for expensive holidays, host decadent parties and purchase unnecessary ‘toys’ |
| 2 |
Seize opportunity to reduce credit card debt and associated interest charges |
Apply for more credit to finance indulgences and pleasures with no consideration for the future financial consequences |
| 3 |
Earn the love and gratitude of friends and family with thoughtful, creative and endearing gifts that cost little more than time and a bit of effort to create |
Succumb to the obligation to buy gifts of equal or greater value than last year, which are quick and convenient to buy over the counter or online using the credit card |
| 4 |
Budget carefully to ensure that income over the festive season carries all the way through to the first pay cheque in the New Year |
Use the ‘Budget’ facility on the credit card to buy even more over the festive season and to survive the first few weeks of the New Year |
| 5 |
Host parties where guests contribute to the spread of food and drinks, or enjoy a night on the town with friends, where everyone gladly pays their own bill |
Host parties or get-togethers at restaurants or clubs, generously picking up the tab for everyone in the ‘spirit of giving’ |
| 6 |
Ignore the marketing hype leading up to the festive season and buy gifts and other wants or needs at a massive discount during the January clearance sales |
Get sucked in by the marketing hype of ‘limited stocks’, ‘buy 1 get 1 free’ specials and other ‘killer offers’, buying more than is needed... at a premium! |
| 7 |
Plan holidays out of season, avoiding the crowds, the traffic and the exorbitant prices of in-season holidays |
Plan holidays when demand is at its highest, prices are at their peak and the dangers on the road are at their worst |
| 8 |
Work while everyone else is getting into the spirit of things, earning double the overtime and kicking off the New Year in a stronger financial position |
Use time off to spend twice as much because that’s the way it’s been done for decades, feeling deserving of it yet ensuring that the New Year starts by facing financial hardship |
| 9 |
Committed to consuming and spending no more than at other times of the year, reaping the financial and health benefits of this decision for months to come |
Look forward to over indulging and throwing caution to the wind, regretting the financial and health consequences for months afterwards |
| 10 |
Choose to do what’s SMART over what’s EASY knowing it’s for the enduring benefit, wellbeing, success and happiness of loved ones |
Choose to do what’s EASY over what’s SMART believing the short term benefits outweigh the long term drawbacks that loved ones will have to endure |
We’re all guilty of making silly financial decisions at times. I know, I’ve made them all and even now I slip up occasionally. Making mistakes is part of being human, which is why I say, “As long as we are imperfect, we are perfectly human.”
But that doesn’t excuse us from repeating our mistakes. We have a responsibility to ourselves to learn from and grow through our mistakes, which is why, “the only mistakes that are regrettable, are the ones we choose not to learn from.”
More than 60% of credit active South Africans are one month or more behind on their debt repayments and almost everyone else is no more than one month’s salary away from defaulting on their debts. Over indebtedness is a social epidemic that is moving speedily towards a social disaster of epic proportions.
Become a pioneer of social change This isn’t a function of 21st century living, it’s a function of social conditioning, entrenched habits, short sightedness, instant gratification and many other weaknesses inherent within our nature. But at the end of the day, we can buck the trend using the overriding power of choice, which we all possess.
Join the pioneers of social change and do what’s SMART this festive season, not what’s EASY. Set the example while setting yourself free from the shackles of debt:
- Break destructive spending habits,
- Push against social obligation,
- Resist the emotional blackmail of advertising that misuses ‘the spirit of giving’ for economic gain,
- Defy social traditions that have long since lost their authenticity.
Give yourself and your loved ones the gift of financial peace of mind, financial security and financial freedom this festive season by choosing to be SMART with your money and choosing to make this a way of life. You deserve it.
If you have some cool ideas about how to be SMART with your money this festive season, click here [http://blog.wilde-insights.co.za/?p=256] to join the discussion on my blog, share your ideas and get more great ideas from other smart people like you.
Until next time, be SMART with your money, be generous with your knowledge, love with all your heart and be grateful for everything you have.
About the author
Gary Wilde, CEO of Wilde Insights is the developer of a unique and highly effective approach to getting out of debt and creating wealth that’s producing remarkable results and attracting the attention of the media. His programs, The Secret To Living Debt Free™ and The Wealth Apprentice™ challenge conventional wisdom and reveal the missing ingredients that society has never been taught about. For more, check out www.blog.wilde-insights.co.za