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January is one of the most stressful months of the year from a financial perspective.
There are roughly six weeks between an early December salary payment and January month end. Within that period, many people spend more on gifts, travel, entertainment and ride-hailing than at any other time of the year – and frequently pay with credit.
January brings not only the regular monthly bills, but, for parents of school- or university-going children, fees, uniforms and textbooks are added to the list. Premiums for insurance, health, security and other services frequently increase in the new year too.
Dealing with the aftermath of festive season spending, in addition to paying for current necessities, is tough for most of us, says Shafeeka Anthony, Marketing Manager of JustMoney.co.za, a site that helps educate South Africans to better manage their money. “January is a long stretch when you are trying to make ends meet,” she adds.
JustMoney offers these tips for making it through this month:
1. Assess your spending. Examine your bank accounts and credit card statements to establish where your money has gone. Being honest with yourself will enable you to see where money leaks occur. If you need help tracking your spending in future, download a money app.
2. Determine which bills to pay first. The most important payments are generally rent, food, utilities, transport, insurance and tax.
3. Work out a budget. Find a system that works for you. The 80/20 rule involves allocating 80% of your income to your needs and wants, and saving 20%. Zero budgeting involves matching everything – whether spent, given or saved – to your income. Find a system that works for you.
4. Cut spending. See where, and how much, you can save. Cancel subscriptions for a barely-used gym membership or streaming service, and cook at home rather than ordering in. You can also consider trimming a large cost, such as housing, by relocating or taking on a tenant.
5. Sell items. Clear out unused goods and list them on a selling or auction site, or hold a garage sale.
6. Add an income stream. Find ways to make extra money, such as offering freelance services like photography or graphic design, delivering parcels, or tutoring.
7. Increase your salary. Aim to boost your income with your current company, either by taking on more responsibility, or asking for more compensation. Consider changing jobs.
8. Forgo brand loyalty. Many retailers that catered for low-income shoppers are now giving big-name brands a run for their money. Some brands have improved store layouts, offer more choice, and stock specialist products. Shop around and compare prices.
9. Deal with your debt. If you are struggling to pay off debt, book an appointment with a reputable debt counsellor. They will assess your situation and offer advice, such as consolidating your repayments into a single, affordable monthly instalment.
“If you are always running out of money before the end of the month, then it’s time to make some changes,” says Anthony.
“The new year is an excellent time to inform yourself about managing your money, and to instil some new habits. The added peace of mind when you start reaching your financial goals will be well worth the effort.”
JustMoney.co.za, established 15 years ago, is a trusted voice within the personal finance sector. The JustMoney website offers articles, money management tools and a wide range of financial products and services. Over 250 000 South Africans subscribe to the newsletter to stay informed and become financially savvy. Find the website here.
