Avoid the debt trap this holiday season

As Barbadians spend their hard-earned cash this holiday season, Financial Literacy Champion David Simpson is urging them to plan, make a budget and follow it.

Simpson, who is also Consultant to the Ministry of Energy and Business’ Financial Literacy Bureau, is encouraging those celebrating the season to do everything “responsibly and in moderation”.

He cautioned: “It can be a season of much temptation, but we must not lose sight of our financial goals and habits. Plan your Xmas spend, budget for your gifts, food, decorations, curtains, etcetera, and then follow your budget. Remember this will be the longest pay period of the year and you have to stretch your money.”

And, for those who will be receiving a bonus, the financial literacy champion advises them to spend very little or none of the money, but rather, save or invest it.

He warned those with credit cards to use them wisely and only when necessary.

“Do not splurge using your credit card. Again, plan, budget and follow it because the bill will come early next year,”

 Mr. Simpson proffered the view that after nearly three difficult years, some people would want to treat themselves and their loved ones, but he encouraged them to stay within their means.

He encouraged the public not to start 2023 “behind the eight ball without cash in hand, or in debt”.

Saving and investing, he pointed out, were critical to people’s financial wellness. He indicated that saving is a habit that allows people to put aside money for a clear objective, or for emergencies in the near future.

“Investing is a form of saving for a stated return that is higher than any saving interest rates, and allows an individual to grow the money invested over the short to medium-term, that is one to five years.

“So, my suggestions are:

• Pay yourself first – that is save some of your income first and then spend;

• Have a separate savings account at your bank or credit union;

• Do not tie your ATM card to that savings account;

• Save what you can afford and budget for each month.

 Increase what you save monthly on a gradual basis.

Simpson encouraged all Barbadians to make financial health and wellness a priority for 2023, and take advantage of the knowledge and tips available through the Financial Literacy Bureau and its stakeholders and partners. (BGIS)