He projected higher prices for basic commodities, saying government would not grant 0% VAT rating as before on goods such as sugar and milk.

Furthermore, no tax relief is expected and the average citizen would pay the same taxes or more.

He advised citizens to earn extra income to make up for the financial “mess” of 2011 and to recover from the Christmas holidays.

A vicious cycle of being in a financial rut is plaguing Namibians, and they normally start recovering from the holidays only by June or July, only to end up in the same position by the Christmas season again, according to Mwinga.

“Make sure not to take on new expenses this year,” he said. He warned against going into contracts that give grace periods, allowing the first payment after three months, for example.

Mwinga added that about 95% of white Namibians budget for the Christmas holidays from as early as January, while the majority of black Namibians spend on impulse without budgeting.

“Your children’s school fund should have been saved throughout the year for the following year as the January and February months are crippling on parents’ wallets because of no proper planning,” he explained.

Moreover, the majority of Namibians have an unhealthy relationship with money, a relationship Mwinga described as similar to that of the citizens of the United States of America, which ultimately led to the country’s economic demise.

“It is easy for banks to offer loans because people take up to the 10th bond on their homes with the ever-increasing property values,” he said.

The economist urged Namibians not end the year in debt.

“We need to change our behaviour and borrow rather for productivity instead of merely for luxuries and consumption,” said Mwinga, adding that people must establish a budget with our income and key expenditures as well as sticking to it.

In addition, micro-financing such as cash loans are easily accessible in Namibia and South Africa but rare in the other African countries.

Although it helps to get people out of poverty, it is misused, as it is not spent productively.

Mwinga further advised people to pay off deft with bonus surpluses and start 2012 on a good note.

He says a lack of information contributes to Namibians’ financial dilemma. He, therefore, advised the need to become financially literate with the help of financial experts.

Financial expert, Afra Schimming-Chase of Chase & Associates, shared Mwinga’s sentiments saying January should be treated the same as any other month by budgeting and not following the perception that it is a financially difficult month.

“We engage in instant gratification activities, get caught up in specials and end up buying things we do not need. Do not get into debt this time of the year,” she cautioned.

Schimming-Chase advised to develop a cash diet, where things are paid in cash instead of credit cards where you don’t actually see the money physically moving out of your wallet.

“Track your spending by writing down everything that you spend on, such as every ATM withdrawal, going out to dinner, etc.,” she said, adding that the first principle of financial planning is to pay yourself first throughout the year.

She further advised people to reflect on their financial behaviour for the past year and to make positive changes for the New Year.

“Settle your debt by paying off debts with the highest interest rates and pay off debts with the smallest amounts,” she explained.

She warned against withdrawing all one’s earnings before debit orders go off, as those are commitments you made.

“A month of bliss can cost you if you don’t pay your insurance premiums seeing that you may not be covered for non-payment,” she warned.

Schimming-Chase urged Namibians to set goals for 2012 so as to not find themselves in the same situation again.