How to stay motivated when the festive season beckons

It’s fair to say that many of us are feeling burnt out. Not only has the past 20 months been tough, but we’re also fast approaching the second festive season of living in a pandemic. With everything that’s going on around us, it’s hard to stay motivated at this time of the year, especially when it comes to investing. Temptations to spend come at us from all sides – from “unbeatable bargains”  to buying gifts to special year-end getaways – any treat to reward ourselves after another difficult year, or to distract us from that emotional drain. But to spend unnecessarily or to stop saving towards your financial goals is not a wise way to end the year, nor is it a good way to start the next. So to help you stay on track, here are a few pointers to keep you motivated this festive season.

Don’t be tempted to pause contributions

A debit order investment is the easiest way to stay on course with investing, but you can pause a debit order if needed. While this flexibility is fantastic when you have to cover a major unexpected expense, it can become a slippery slope towards pausing your savings indefinitely.

Pausing contributions for a good reason is one thing, but you shouldn’t use stress or the pending festive season as an excuse. If you do have to pause, restart contributions as soon as possible. It’s significantly easier if you only have a month or two of contributions to catch up on, instead of a year or two. The longer you delay saving, the more you’ll need to put away to reach your financial goals.

Don’t withdraw from your savings for a short-term purchase

It takes a long time to recoup lost savings, especially in unpredictable or volatile market conditions. You could withdraw money from your investment at precisely the wrong time, thereby missing out on a great return. “Time in the market” is an adage for a reason – because it’s tried and tested. Staying invested is the best solution for long-term success. Identify the difference between a real emergency or opportunity, and think twice when you’re tempted to spend.

To stay motivated, take into account both short- and long-term considerations. As humans, we all have a tendency to focus on short-term desires than longer-term consequences. But you only cheat yourself when you ignore your future financial needs. That road trip or new outfit may become a great memory or treasured item, but neither should be paid for from savings intended for emergencies or a long-term goal like retirement.

If you want to treat yourself, save up specifically for that purpose. Use our Goal Calculator to help and consider opening a discretionary unit trust investment that you can keep topping up. Opening an investment with Prudential is quick and easy. And best of all, you can do it online in under 10 minutes.

Try to be patient

For money to grow, it needs exposure to the right asset classes and at least a few years before you can hope to be rewarded for your monetary patience. You can also boost your returns by adding to your investment regularly and consistently. Unit trusts are designed for both shorter-term timeframes: for example, three years or less for fixed-income funds, or one year for money market funds; and for longer-term timeframes, such as five years or more for multi-asset (balanced-type) funds, or seven years or more for equity funds. To get the best from them, you should stick with them for the entire recommended investment period at a minimum, through all the ups and downs of the markets, because this is the ideal timeframe for which they are built to achieve the expected returns. If you sell before this, it’s possible that you’ll be undermining your own returns.  

So with the festive season just around the corner, why not beat the new year’s resolution rush; make it a goal right now to keep motivated about investing consistently, so that this time next year you’ll have another year in the market under your belt.

At Prudential, we’re making the most of the future – we will be officially changing our name in just a few days’ time to M&G Investments. Keep in mind, though, that it’s only our name that’s changing; otherwise we’re sticking to our core investment principles and philosophy. Contact our Client Services Team on 0860 105 775 for more information or email us at query@prudential.co.za.