January does not have to be Januworry. The key to a worry-free January is how you plan and spend in November and December. Here are 10 tips to help you start the new year with as little financial stress as possible.
- Do your back-to-school planning
We all know the school year starts in January, so it should not come as a surprise. Start preparing early, get the supplies list from the school and start buying now so that you don’t have to do one big back-to-school shop.
- Do a multi-month budget
Because we get paid early in December, January always feels twice as long as any other month. Help yourself manage this situation by drawing up a budget for December and January. You need to factor in the extra spending that always comes with the holidays and the festive season and make provision for January’s additional expenses. Divide your multi-month budget into weekly amounts to help guide your spending.
- Track your spending
Yes, there is nothing new about this tip, but it remains a powerful one. The best budget in the world means nothing if you don’t spend according to the plan. The only way to ensure this, is by tracking. Note down all the amounts that leave your wallet or your bank account and do a weekly reconciliation. If you overspent one week, then you know to put the brakes on in the next one to get you back on track.
- Match gifts with necessities
If your family or circle of friends celebrate Christmas or exchange gifts in the festive season, why not put some of your new-year necessities on the gifts wish list? For instance, if your child needs a maths calculator for school, let friends or family members know. The same applies to specific items of clothing or even toiletries or a gift card from a grocery store.
- Make extra payments
Where possible, make extra payments on debt instalments so that if you have a cash-flow shortage in January you won’t fall behind.
- Negotiate discounts and subscription suspensions
Find out what discounts you can get for upfront payments, especially when it comes to school fees. And if you subscribe to services you won’t need while away on holiday, see if you can negotiate for it to be suspended. Certain insurance companies, for instance, allow you to downgrade your cover if your car is going to be safely parked in your garage while you are away for a few weeks.
- Buy in bulk
If you come across a good deal on non-perishable foods, cleaning materials or toiletries, stock up now. You can also agree with friends, family members or neighbours to pool your money to buy supplies in bulk and then divide them equally.
- Use cashback and rewards
If you have credit cards or other accounts with cashback or rewards programmes, consider using them for holiday spending. Just make sure to pay off the balance in full to avoid interest charges.
- Use cash or debit cards
Use cash or a debit card for your holiday spending instead of credit cards. This way, you won’t accumulate high-interest debt to repay in January.
- If you have to borrow, do so responsibly
Despite your best intentions and efforts, you might still need a loan for specific expenses, such as getting your children back to school. If you do, borrow responsibly:
– If you need to pay one year’s school fees, don’t extend your loan period to two years.
– Only borrow the amount you need, nothing more.
– Shop around for the credit deal that best meets your needs.