Debtfree Issue 202312 - DB

There are other factors that contribute. Some companies pay
employees in mid-December, so salaries have to stretch a monthand-a-half
until the end of January. Many employers cannot pay full
13th cheques or year-end bonuses, so consumers have no cushion to
cover the extra festive-season expenses. In both cases, many turn to
loans to make up the difference.
Then there are the post-holiday expenses such as school uniforms,
fees and transport, which escalate the financial pressure and can
result in people taking on even more debt.
This isn’t anecdotal, but a cycle that repeats itself year after year. It’s a
treacherous tide, but with some planning you can swim against it.
DebtBusters sees enquiries about debt management spike every
January and February. This has intensified over the past two years as
higher inflation and interest rates exacerbate the situation.
Typically, what we see happening in mid-January and extending into
February is that consumers find themselves in a pinch and borrow
money to make it through until they get paid. The problem is that the
repayments on these loans add long-term pressure on households
which are only just keeping their heads above water. One unexpected
expense or emergency can then result in serious financial difficulty.
DebtBusters suggests the following for people wanting to swim
against the tide of borrowing this holiday period:
Plan ahead: If you get paid early in December, remember you will
need to stretch your salary until the next paycheque. Allocate money
for living expenses for the full period, factoring in January expenses,
before you decide how much to spend on gifts and entertainment.