Escape the “Januworry” trap

“Januworry” is a term that describes the budget challenges many of us experience in January, following festive season overspending. It can leave us without necessities, and may compel us to rely on credit to get through the month. 

We consider how to avoid financial stress during what often feels like the year’s longest month.

Tip: If credit obligations are dampening your festive spirit, take steps to consolidate your debt.

Avoid the overspending trap

As the festive season kicks into gear, it’s easy to avoid thinking about the impact of overspending on our longer-term finances. However, inevitably, we will have bills to pay in January.

“You may find yourself eating instant noodles and baked beans until your January salary hits your bank account,” says Johann Rossouw, an associate financial planner at Fiscal Private Client Services. “However, a little discipline and planning can help you to escape the Januworry trap.”

Financial planner and money mentor Terence Tobin says many of us succumb to temptation every year because we don’t think ahead.

“Fortunately, there are strategies we can employ to help get us through the ‘longest’ month of the year,” he notes.

Set up a “Januworry fund”

Rossouw recommends making a list of your possible December and January expenses before the holidays, and estimating the associated costs.

“This will give you a better understanding of your goals and how much you need to put away to cover those expenses,” he says.

Tobin agrees that a “Januworry fund” can help you plan your spending for the festive season and beyond. “Save a portion of your monthly income to put towards gifts, travel, school fees, and so on,” he says. “It’s a small sacrifice so you can enjoy a guilt-free holiday and an anxiety-free new year.”  

Hayley Parry, a money coach and facilitator at 1Life’s Truth About Money initiative, advises dedicating a portion of your salary to “pre-fund” a back-to-school account for January.

“Get a stationery list from school and start purchasing the items, or make a deposit towards school uniforms at the school shop before the holidays,” she says.

“If that’s not an option, buy uniforms before the holidays – make sure you leave a little room for your children to grow – and rest easy, knowing that expense has been taken care of.”

Tips to get through the month

Jaco Prinsloo, a senior financial consultant at Alexforbes, offers some tips to help you make it through January, and beyond.

• Spend mindfully. Distinguish between wants and needs, and buy items based on the value they’ll add to your life.
• Use any bonuses wisely. If you’re lucky enough to get a bonus, use it to bolster emergency funds, pay off debts, add to your retirement savings, or cover future expenses.
• Track your budget. Draw up a budget and segment your income, expenses, savings, and debt payments, providing a clear financial blueprint to navigate the month with a disciplined approach.
• Curb impulse spending. Introduce “no-spend” days, use cash for purchases, know your budget, unsubscribe from sales alerts, and know your consumer rights – for example, you have a cooling-off period for transactions resulting from direct marketing.
• Manage your debt. Channel any spare funds towards high-interest debts, reducing financial strain and freeing funds for savings or investments.
• Set goals. Establish short- and long-term financial objectives, such as paying school fees or buying a car. Having a clear goal will motivate you to stick to your budget.
• Adjust your lifestyle. Live within your means to avoid debt accumulation. Opt for affordable housing, prudent spending, and home-based entertainment.

Tobin recommends that you consult an independent financial adviser, who can help you develop a financial strategy and a plan you can stick to all year round.

“Choose a fee-based adviser who won’t sell you products but will understand your goals and motivations,” he advises.

 Tip: Using a budget calculator can help you understand where your money goes every month.