The festive season is done and dusted, New Year's Eve has come and gone, and January is here. For many, this is when the financial blues start. For some, January seems to be the longest financial month ever. December salary is usually paid 2 weeks earlier than usual and if you don’t have a plan or set a budget, you usually find yourself spending unnecessarily during the festive season. People tend to forget to hold back on spending and set aside the finances needed for January expenses. We are usually left with empty bank accounts and more debt. Payday seems ages away. Most of us avoid our credit card statements and phone calls from unknown numbers, who we presume are debt collectors.
Understanding the Root Causes
To deal with these January financial blues, you need to get to the root causes of your problems and set financial goals to help you avoid the same situation transpiring in future. It takes a lot of effort, self-discipline, and hard work, but it's worth it if you want to achieve your financial goals and avoid the blues.
January is a time to review your holiday spending. It is the time to check where you went wrong, so you can set a clearer holiday spending budget for the future. Assess what you did right or what you did wrong. Make a plan for your new year's financial goals. Set smart financial goals that are specific, realistic and attainable. You have to prepare yourself mentally and emotionally for the change in your behaviour.
Steps to Take to Deal With January Financial Blues
To stop feeling depressed about money, stop being a slave to debt, and take control of your finances instead of your money controlling you, you should follow these steps:
- Take Stock of Your December Spending. Figure out where you went wrong. Did you spend what you had budgeted for or did you get caught up in last-minute spending on gifts and unplanned holidays? Taking stock of your holiday spending will help set clear financial future goals.
- Stop using credit cards to make January a better month. Always use cash and learn to live within your means. If you cannot buy it on cash, you probably cannot afford it.
- Set Up a Budget for the Year. January is a great time to set goals. They should reflect how much you hope to spend, save, and invest this year.
- Keep Track of All Your Expenses. Spending without clear financial planning always leads to living beyond your financial means. Rank your needs and prioritise your expenses.
- Cut Down on 'Wants' and Focus on 'Needs' instead. Rent a movie instead of going to the cinema, where you will end up paying for extra items like snacks. Drive a car that you can afford instead of one that makes you look cool. Rent a place that is not more than 30% of your salary. Opt to cook healthy meals at home rather than eating takeaways.
- Pay Off Debt That Has the Highest Interest Rate or Pay Off Debt with the Lowest Balances First. This gives some sort of accomplishment and might even lead to behavioural changes towards the way we view our finances. Here are two strategies for paying off debt.
- Keep Your Spouse and Your Children Informed. Let them know about your financial goals as a family and give their inputs. That way, everyone can take part be on board with the changes required, and not expect money to be spent unnecessarily.
What if You're Drowning in Debt?
If you are already drowning in debt, keep calm don’t panic. Get financial help. Debt Sage's NCR-registered and qualified debt counsellors will assist you with the debt review process to become debt-free. This is specially designed to help individuals struggling to service their debts. We renegotiate all your outstanding credit agreements with your credit providers, thereby reducing your monthly debt repayments to levels that you can afford and successfully help you get out of debt without having to take on further debt. Get started today.