The Christmas season is here again and it offers individuals the chance to reunite with their families and have fun ahead of the new year.
But besides taking a break from work, one thing synonymous with the season is excessive spending. Unlike any other time of the year, household spending usually shoots up as families buy gifts for loved ones, incur travel costs, organise get-togethers/hangouts and visit fun spots among other costs.
While there is nothing wrong with enjoying one’s self during this period, one must also be careful not to overspend.
The following are some of the risks that could be associated with overspending this December.
Recession/Unfavourable economic climate: Going into 2023, financial analysts and economists have forecast the possibility of a global recession. A study conducted by the World Bank also noted that the possibility of a recession in 2023 is almost inevitable as Central Banks across the world have increased interest rates simultaneously with rising inflation.
- Also, the war in Ukraine has led to inflation, causing food and energy prices to soar. According to reports, current global inflation is currently the highest since the 1980s.
- With this indicator, job security is almost not certain even as pay cuts may follow the recession.
Possible job layoffs: 2022 witnessed some of the most shocking mass layoffs in modern history. The global tech industry was hit the hardest as many people lost their jobs. According to reports, about 17,590 dismissals from 52 startups were recorded in 2022. Top of the list is Meta, Twitter and others.
- The layoffs may likely continue in 2023 due to the numerous uncertainties heralding the new year. And the best way to prepare for this possibility is to have enough cash buffers to sustain yourself just in case.
- Therefore, while you spend in December, it’s important to keep some due to the uncertainty over jobs, coupled with a potential recession.
The 2023 General Elections: The uncertain nature and violence that usually characterise elections in Nigeria have made it difficult to predict the outcome and aftermath of elections, especially gubernatorial and presidential elections. While we have high hopes for free and fair elections devoid of violence, it’s inevitable to prepare yourself in case of any eventuality.
Therefore, it’s essential to keep the spending at a decent level.
Cost of transportation: Transportation is a major ‘money gulper’ for most people in the country, especially in populated areas like Lagos.
Asides from the transportation cost, President Muhammadu Buhari has approved the removal of the fuel subsidy which will take effect from June 1, 2023. This means there’s a high possibility of a hike in fuel prices, which will also affect transportation.
Cost of Feeding: The war in Ukraine has contributed to a hike in food across the country. With the war still ongoing, there’s a possibility of food prices going higher, even though food prices are at an all-time high presently.
You will pay school Fees: For most primary and secondary schools across the country, January signals the start of the second term of an academic session. This means it would be another time for parents to pay school fees.
While December comes with many bills to pay, it’s important to be conservative and try not to overspend. The following are ways to keep spending at a decent level.
Have a Budget/Spending limit: One of the most important things to do is to have a budget for things to buy or to gift out and also ensure there’s a spending limit. Having a budget makes it not go out in line and keep the spending level within levels; anything outside the budget is deemed overspending.
Take advantage of deals: One of the things associated with December is deals. Some companies do offer clearance or end-of-the-year sales to people. One can take advantage of this to spend less.
While it’s important to enjoy the yuletide and holidays, it’s also important to note that the holidays will span a couple of days, and activities will resume in no time.
