January can be a tough time for many people, following excessive spending in December, leaving some a bit short on cash for the first month of the year.
Eunice Sibiya, head of consumer education at First National Bank (FNB), noted: “The sooner you get a hold on your finances, the easier it will be to start 2017 financially afresh. This means making some tough decisions as early as possible, starting with the first month of the year.”
Take stock
Now is the time to access your finances. In December Justmoney offered tips on how to avoid the festive season debt trap. If you were not able to avoid this, now is the time to take stock of your financial situation and any overspending you may have partaken in.
“The best way to do this is to go through your bank statements. Every transaction will be recorded and you will quickly be able to see where you have overspent or if you have kept within budget,” advised Sibiya.
By doing this, you will have a better understanding of where you stand financially until January payday.
Take note of upcoming financial responsibilities
When examining your finances remember to also look at your upcoming expenses, such as school fees, textbooks, stationary, and other costs, such as your bond and other debt repayments. Make a list of all your expenses, this will allow you to see where you are financially.
Make a plan
Sibiya highlighted that it is best to start with your financial plan early in the year. Now is the time to be strict with your finances and make decisions that will set you in good stead for the year. These decisions include ensuring you are able to cover your upcoming expenses without taking on additional debt, such as a loan or spending on your credit card.
“Don’t be tempted to take out a loan to cover your shortfalls. This is a rocky road, and will inevitably lead to more financial stress and over indebtedness,” said Sibiya.
Rather than taking out additional credit, cut back on additional and luxury expenses, such as going out or shopping for new clothes that you don’t need.
“You can be financially smart over this period. Take the down time to hunt through your home for items that you can sell second hand, use your rewards programmes, such as eBucks to pay for school stationary and make use of free entertainment, such as picnics in the park to entertain the kids,” stated Sibiya.
She added: “Don’t panic if your festive season spending and your upcoming expenses are overwhelming. The first step is to get a good grasp on where you are, and from there you can build a sustainable solution.”
