Consult’s CFO Boipelo Ndimande discusses why your bonus might feel smaller than previous years, and how to stretch your budget to make it through the notoriously expensive holiday season.

You just can’t figure it out. Your thirteenth cheque arrived in your account – a welcome ping on your phone – but as you sit with your holiday budget, the numbers don’t seem to add up. Why does it look like you’ll suddenly have a lot less to see you through to January payday – despite getting your standard inflationary increase of 6% earlier in the year?

You’re not imagining it, says Boipelo Ndimande, Chief Financial Officer at Consult by Momentum, “There are a couple of factors at play impacting your take-home pay, and it’s important to understand what they are so you can devise a plan to see you comfortably through the holidays.”

Why your year-bonus suddenly seems a whole lot smaller

• ‍Tax bracket creep: Because the Finance Minister didn’t adjust income-tax brackets for inflation at this year’s Budget Speech, any increase you received pushes more of your earnings into a higher tax bracket that hasn’t been adjusted alongside inflation. So while on paper, it might look like you’re getting more, you’re silently squeezed. Bonuses are also taxed at a higher marginal rate, leaving your take-home feeling noticeably lighter.‍
• Lifestyle creep: Subscriptions, takeaways, upgrades and convenience spending have a way of stacking up quietly. By December, your monthly budget is already tighter – so your bonus has more gaps to fill.‍
• Inflation: For many of us, living costs have risen faster than our pay, meaning that our bonus now buys less than it did a few years ago. What once covered the season comfortably now barely fills the basics. Thanks to three years of elevated food inflation – often in the double digits – a family that used to spend R1 200 on a Christmas lunch will likely now spend more than R1 800.‍
• The annual knock: Year-end and new year often bring sneaky extra costs: licence renewals, medical aid increases, school deposits, insurance bumps, back-to-school costs. These once-off expenses often land at the same time as your bonus, swallowing a chunk before you’ve even budgeted.

“People remember how far their bonus stretched a few years ago, but in real terms – thanks to inflation, tax and cost of living increases – a R20k bonus today is worth far less than R20k in 2019.”

While there is not much you can do about these factors, what is in your control is your budget, says Boipelo. She shares simple ways to adjust and ensure you avoid the dreaded Januworry.

Relook your festive budget

“Before you even touch your bonus, take an honest look at what December realistically costs you now, not what it cost three years ago,” advises Boipelo. Prices for food, petrol, gifts, travel and holiday childcare have all climbed well above inflation, which means your old budget simply doesn’t work anymore. Map out what you must spend and what you want to spend, then decide where you can cut back. A refreshed, realistic festive budget can instantly show you where your money is leaking and help you regain control.

Split your bonus wisely

The most effective strategy is to divide it the moment it arrives: one portion for essential December and early-January expenses, another for savings or debt reduction, and a final slice for guilt-free festive fun. This way, your priority bills are covered first, and you avoid the all-too-common trap of using your entire bonus in December, only to face pressure when debit orders hit in the new year.

Look into where you can save or cut back

You can stretch your bonus much further by making small and intentional shifts. “Creative gift-giving – like pooling funds for one family charity donation instead of exchanging multiple presents –  can cut costs without cutting joy. Simplifying festive meals, sharing hosting duties, or choosing a more low-key potluck-style Christmas lunch can also ease the financial load,” suggests Boipelo.

Where possible, avoid the “all at once” shock by buying gifts and back-to-school supplies earlier in the year or during Black Friday sales. And if you’re genuinely stuck, speak to your credit providers about a temporary payment holiday on your premiums (but use this as a last resort).

Work with a financial adviser

A financial adviser can give you a clear, objective view of your cash flow over the festive season and help you build a realistic plan that matches your income, priorities and obligations. They can show you how to allocate your bonus and prepare for January without anxiety.

“For many people, this guidance is the difference between feeling overwhelmed and feeling in control –  and it can set you up with better financial habits in the long run, says Boipelo.

“If you’re not already partnered with a financial adviser, why not make this a holiday gift to yourself?”