Ways to help you tackle financial stress induced by festive season spend

With the current inflation rate averaging seven per cent, Kenyan households have less purchasing power than last year.

As such, they are now forced to cut non-essential spending or reallocate spending entirely.

Therefore, as we approach the height of the festive season, a time traditionally associated with joy, togetherness, and celebration with loved ones, it is a reality that this year, the festive holidays will be coupled with financial stress for many Kenyans.

How then might Kenyans ensure that the joy of the holiday season is not overshadowed by financial worries?

First, establish a realistic budget and stick to it despite holiday pressures.

The allure of Christmas offers and the desire to give meaningful gifts can sometimes cloud our judgment, leading to impulsive and excessive spending.

Before diving into the holiday shopping frenzy, take the time to outline a budget that encompasses all aspects of the season, from gifts and decorations to travel and entertainment.

Consider your current financial situation, set clear spending limits, and be disciplined in adhering to them.

To further mitigate financial stress, explore alternative ways to celebrate that don’t require extravagant spending.

Embrace the spirit of giving through thoughtful, homemade gifts or by volunteering your time to those in need.

Engaging in these activities not only fosters a sense of community but also reduces the financial burden associated with lavish gift-giving.

Also, this is the perfect time to fully utilise ‘lazy days’ where you can stay with your family or friends.

Utilising financial literacy tools can be a powerful ally in managing holiday finances.

Many financial institutions including Tala have resources on their apps and websites designed to help you track spending, create budgets, and identify potential areas for savings.

Consider using these resources to stay organised and gain a clearer understanding of your financial picture during the holiday season.

By leveraging financial literacy, you can make informed decisions that align with your budgetary goals.

Only borrow what you can pay back when necessary.

As we approach the peak of the festivities, we anticipate an increase in loan uptake, presumably, from Kenyans who are using digital credit to supplement their income gaps.

It’s crucial to resist the temptation of relying on credit as a quick fix for holiday overindulgence. Be a responsible borrower.

If you find yourself in need of extra funds, explore responsible lending options from licenced digital credit providers and other financiers that align with your budget.

Digital lenders under the ambit of the Central Bank of Kenya (CBK) such as Tala will provide transparent terms and flexible repayment options, empowering consumers to make informed decisions about their finances.

Open communication plays a pivotal role in navigating the holiday season without succumbing to financial stress. Discuss financial expectations and limitations openly with friends and family to set realistic expectations for gift exchanges and celebrations.

Goal-setting

Mutual understanding can foster a supportive environment, ensuring that everyone can enjoy the season without the burden of excessive financial obligations.

Lastly, it is possible to view the holiday season as an opportunity for financial reflection and goal-setting for 2024 as opposed to just a spending season.

Use this time to assess your financial habits, identify areas of improvement, and establish a plan for the coming year.

Consider creating a dedicated savings fund for future holiday expenses, allowing you to approach the season with greater financial confidence and peace of mind. The joy of the holiday season should not be overshadowed by financial stress.

By approaching the festivities with a realistic budget, embracing alternative celebrations, leveraging financial literacy tools, making informed borrowing decisions, fostering open communication, and using the season as a time for financial reflection, we can ensure that the holidays are a time of joy, connection, and lasting memories rather than a source of financial worry.

The writer is the General Manager, Tala

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