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Financial planning strategy for the Christmas holidays 2021


Have you started preparing your finances for the Christmas season? In a year that has been unpredictable, especially when it comes to the economy and job security, what a good budget and wise spending look like. The COVID-19 pandemic has caused financial stress for many people and has reshaped the way most people save and spend money. Overspending during these holiday times can lead to significant post-holiday regret due to our reluctance to stick to our budget.

Since most of us plan the holidays and Christmas shopping, it’s critical to figure out how much money we want to spend before figuring out what we want to spend our money on. I will urge everyone to create a budget by looking at their financial situation, especially cash on hand and banking versus other major expenses in the first quarter of 2022 such as tuition, rent, and utility bills. Here are some strategies to consider:

Analyze your current debt: It is quite difficult and not unpleasant for all of us, but it is very necessary. One of the key things to consider is your debt, especially for users of credit cards and other debt related activities. Consumer debts include personal debts due as a result of the purchase of goods for individual or family consumption. Think about your payday loans, overprovisions, mortgages, car loans, student loans, etc. and clearly establish a debt management plan. I will advise to avoid unnecessary and expensive spending so as not to miss the monthly payment and make the current debt situation worse.

Make a List of Expenses: After analyzing your debt, it’s important to list and calculate your expenses. I will advise a regular review of the monthly budget to determine the extra money or expenses that can be reduced to account for the additional expenses. Personally, I subtract my regular expenses which include rent, mortgage, utility bills, groceries, and fuel from my projected income to figure out how much money is available for expenses. I normally keep a list of expenses, especially for items related to food. I regularly use bank statements and receipts to plan my spending. It is essential to take your fixed expenses into account for the mandatory expenses for which we normally pay the same amount each time and the variable expenses are of the type that change from month to month. Assign an expense value to each category and estimate how much you will need to spend per month on the expenses.

Creating a shopping list: Creating a shopping checklist can prevent unwarranted shopping and aimless wanderings in markets and stores. Many of us still buy things we don’t need and miss out on those who need them. Having a shopping list will help keep the consumer on a healthy trip and avoid unplanned market visits and unwanted purchases and expenses. It is important to have a shopping list to keep tabs on items that need to be restocked regularly. A proper shopping list will require an inventory of major basic items such as eggs, milk, butter, etc. which are used regularly and should be a priority.

Start tracking prices: Prices are constantly fluctuating in our parts of the world and, as companies operate in a price sensitive market, it is important for consumers to get real-time price changes, and to inform and respond quickly to the market. increase or decrease in prices. We are currently experiencing regular changes in the price of petroleum products and consumers should regularly check the prices displayed at pumping stations before making a decision. Consumers usually infer that a higher price signals higher quality and at the same time a higher price indicates a greater monetary sacrifice when purchasing the product. Companies should therefore develop a pricing model that will be attractive to the target market.

Andrews Ayiku
Senior Lecturer, University of Professional Studies, Accra