Holidays are supposed to be carefree and relaxing, but a happy year-end break can soon turn to misery if, by the beginning of January, you realise you’ve spent too much enjoying yourself and are starting the New Year in financial difficulty.
Benay Sager, chairperson of the National Debt Counsellors’ Association, says debt counsellors typically see a spike in enquiries in January and February.“
The combined economic impact of successive lockdowns, escalating inflation and interest rate increases have negatively impacted most people’s earnings. In addition, many companies are not in a position to pay an end-of-year bonus to staff members.“
Then there are the usual contributory factors. Real income continues to decline, having shrunk by 24% over the past five years. And for the perfect storm, factor in that because most people are paid early in December, that paycheque needs to stretch for up to a month-and-a-half until the end of January.”
In addition, year-end financial pressures can be exacerbated by New-Year expenses such as children needing new uniforms and stationery to go back to school. This can result in people taking on even more debt.
Sager says a little forward planning can go a long way to preventing the January blues. He suggests the following:
Sager says that it is critical to keep up debt payments over the holidays. NDCA data shows that on average it takes up to two years for consumers to catch up on payments that are missed in December. In the current economic climate, it is likely that now it will take even longer.“
While we advise everybody to keep up their debt repayments over December, we recognise that for some this will not be achievable. If that is the case, get help from a reputable debt counsellor. Don’t delay as it could negatively affect your credit record and if you wait too long even debt counselling may not be an option.”