Weighing up needs against wants

Johannesburg- After 18 months of lockdowns and the easing of travel restrictions, optimism is finally returning to many South Africans who have had to halt their dreams of dashing off to far-off destinations.

Some overseas destinations are now accessible to vaccinated South Africans. Closer to home, popular destination Mauritius has also followed suit, with local low-cost airline FlySafair for the first time offering flights to the island from next month.

There is lots of exciting activity in this space, with airlines like SAA taking to the skies yet again.

As confidence rises in line with vaccination rates, there are positive signs that the tourism industry may experience a much-needed uptick in bookings during the festive season.

This is called “revenge spending”. Consumers who have been sitting on extra cash, whether from deferred spending or from that holiday that never happened in 2020, rush to spend on experiences they have been missing out on since the start of the pandemic, like the holiday of their dreams.

In light of this, if you are travelling for the first time since the start of the pandemic, it is important to do so as responsibly as possible, given that uncertainty is far from over.

After a very tough 18 months, if you are lucky enough to have a surplus of disposable money, there are ways you can make the most of it.

The trick is to balance your short-term desires and spending with your efforts to stay on track to reach your long-term financial goals, which may have been thrown off-kilter by the pandemic.

Tips to ensure that while you revenge-spend, you can still be mindful of your longer-term goals:

Keep up positive habits formed  during the pandemic

Many South Africans may have seen their spending habits change during the pandemic (think no coffees on the way to work, cutting back on fuel costs due to less travel to and from the office, fewer opportunities to dine out, and so on),
resulting in opportunities to save money.

The pandemic has made us reassess our needs versus wants.

Spend only what you can afford

Revenge spending can be a good thing as it helps restore industries and local economies that have been decimated by the pandemic. Think to tip, eat at restaurants, go to shows and live events, and visiting tourist attractions.

Before you book your ticket, have an honest conversation with yourself.

Consider whether you can stick to your financial plan and holiday budget. It doesn’t make sense to live above your means if you are borrowing against your future self.

Prepare for the unexpected

If you are travelling, you should factor in additional, unforeseen expenditure into your travel budget, especially given that the world is in a state of flux. Remember too, you may not experience travel as before the pandemic, with many holiday resorts’ capacity curtailed, and available services, shops and restaurants either being closed or only open on
certain days/times.

Holiday fund vs emergency fund

An emergency fund should not be used to fund a holiday or treat your loved ones; rather it is a safety net for unexpected expenses and shocks to your income. Life happens – as we have been taught over Covid-19 – and we need to be prepared.

  • Bodlani is head of strategic markets at Allan Gray

By Nomi Bodlani

 

For more political news and views from this week’s paper, click here. 

Follow @SundayWorldZA on Twitter and @sundayworldza on Instagram, or like our Facebook Page, Sunday World, by clicking here for the latest breaking news in South Africa. To Subscribe to Sunday World, click here.

Sunday World

Author

Latest News

Most Read Posts

Sponsored Content

Sunday World Notifications Would you like to receive notifications on latest updates? No Yes