Splurging on unnecessary ‘summer essentials’ and gifts or flashy vacations can however lead to a financial hangover in January, warns Lizl Budhram, Head of Advice at Old Mutual Personal Finance.

While it’s important to relax and enjoy yourself at the end of a demanding year, this shouldn’t result in unnecessary debt and a compromised lifestyle in 2018. “It’s possible to find a balance between enjoying your year-end break and maintaining financial health. The key is to focus on having quality time and meaningful experiences instead of expensive luxuries.”

She offers the following tips to avoid a money hangover in 2018:

  • Set your festive season budget long before 1 December to prepare yourself mentally for the choices you’ll need to make.
  • Make a dent in your debt. This will help you feel confident that you’re in control of your finances as you head into the new year.
  • If you are struggling to both manage your debt and save, consider partnering with a financial adviser who can help you build a plan to achieve your financial goals.
  • Avoid tapping into credit and stay away from ‘easy’ credit and store cards. Resist the temptation of buying the newest summer fashions, trendy gifts and end-of-year treats on ‘easy credit terms’.  
  • If you are lucky enough to receive a bonus, use a portion of it - before you have the chance to spend it - to reduce your debt or increase your savings account balance. This ‘investment’ in yourself will essentially improve your financial situation and give you a bit of leeway if you absolutely have to purchase something that is slightly out of budget.
  • Keep a careful track of your expenses. While spending is inevitable, overspending is avoidable, and saving is achievable.
  • Stretch your rands by finding marked-down items, sales and holiday specials. Take the time to look for the best deals to suit your budget and try to get your shopping done early to avoid last-minute and unplanned expenses.

“Year-end spending should not result in a painfully tight January. Be honest with yourself about your financial position to avoid the burden of debt in the New Year. Get a head-start on your 2018 financial goals by consulting a financial adviser and planning ahead so that you have more flexibility to reward yourself and at the same time maintain, and improve, your lifestyle,” concludes Budhram.