Last week I ran a question on my Instagram page engaging followers to share what they did with their last bonuses or NSFAF refunds. This question was triggered by the fact that most employers tend to pay bonuses toward the end of the year, making the third quarter the best time to reflect and plan what to spend your next pay-out on.
The responses were quite interesting to read; ranging from people who have paid off part of their debts, people using the money for capital projects, others traveling and some parents prepaying their children’s school fees for the following year.
In this article, we will explore why prepaying your expenses is beneficial and what are some of the costs you can consider paying upfront.
Paying in advance was quite popular, especially in the olden days when lay-by was the common buying option at the major stores that offered extended payment terms. However, with more access to credit, more and more people are opting to buy on credit, incurring additional charges on the items being purchased.
Although no longer a popular means of payment, the most obvious benefit of paying in advance is reduced financial burden at a future date. Most sellers or service providers tend to also offer discounts to customers who settle upfront, and thus not only do you have fewer future obligations, but you may also get the service at a lower price. In addition, given the current inflation trends, paying upfront also shields you from any future price escalation that may impact your affordability.
With year-end approaching, here are some costs you can consider paying upfront:
- For parents, top of the list should be school expenses. This may include paying tuition fees (in part or full), registration costs, uniforms, and any back-to-school stationery. By now, the 2023 fee structures are already published and if not, you can always make a payment based on this year’s fees and make a top-up payment when final fees are published.
- December holiday plans. For many, ‘Januworry’ is known for its money troubles, mainly because most companies close over the December holidays and tend to pay employees earlier than usual. Given that many people hardly have savings for holidays, prepaying some of the costs such as accommodation and activities can save you from the January headaches.
- Paying utilities upfront for 2023. Water, electricity, rates, and taxes are also some of the recurring household costs that one can pay in advance if capacity allows.
The year 2023 is just three pay-days away. Let this article be your reminder that what you deem as necessary expenses will always grow to equal your income, unless you put the money away. If you know you are likely to spend the money, pay in advance whatever matters as soon as you get it to avoid impulsive spending.
And lastly, should you choose to, please read the refund policy in case you change your mind after having made the payment.
*For more information, do check out our business-related videos on YouTube “Money matters with Budget Bee -Namibian Youtuber”. Klestina Kauhondamwa is a Chartered Accountant by profession.
