January is the month nicknamed Njaa-nuary because most people tend to be broke. However, people are not broke in January because of what they do in January, but rather what they did in the months before January, especially December.
December is the month when people make merry and celebrate. They travel, throw parties, buy gifts and indulge. While there is nothing wrong with making merry, there are limits to how much one can indulge. Mostly, the limit is determined by the financial wherewithal.
The December overindulgence is felt in January. In this article, we shall discuss mistakes you will make today that will get you broke in January.
Holidays are a feel-good season. During the holidays, you can let go of the strict financial and budgetary plans you have been religious about throughout the year. However, the reluctance should only be to a certain extent.
The reluctance can lead to impulsive holiday spending. For instance, if you have a family, your kids might want to be taken to various hangout spots around town. Your partner would also not mind a weekend getaway to Mombasa, Nanyuki, Maasai Mara or a place of their liking. These are valuable experiences, and being a holiday season, they might seem permissible. But they mostly lead to impulsive holiday spending.
If you travel upcountry, you might get home and realize that the fence needs to be redone, the house needs a fresh coat of paint, or whatever project you find at home, which can lead to the use of funds you had not budgeted for. Additionally, meeting with old friends and wanting to spend time together might lead to overspending.
During the holiday season, you must have some self-control. The best would be to have a budget for the season and stick to it.
Failure to budget and control yourself could lead to overspending that will bite you in January when the party ends, and you are all alone.
For some reason, January bills seem far removed. So much happens in December that we rarely think about January, and then as soon as the party dies down after the crossover party, the unpleasant January bills hit us.
The biggest expenditure for January is usually around back to school. Children need new uniforms, new books, and stationery. Some are moving to new schools and so on. It is always a busy couple of weeks.
Failing to plan for these January expenses will catch you flatfooted. You might need to go into loans or draw from your savings to be able to pay for these bills.
Nonetheless, all that is avoidable if you only planned for January before indulging in the December festivities. Without proper planning, there is a high likelihood that you will overspend in December, which will affect your financial capability in January.
January is the first month of the year. You don’t want to start the year on the wrong foot. Therefore, plan for December and January today before the festivities pick pace.
During the seasonal holidays, businesses are also in a holiday mood - the giving mood. It also coincides with the end of the year, and businesses might want to finish their pending stock.
Businesses have holiday and end-year discounts that you can take advantage of.
By buying items you need at a discount, you can significantly reduce the expense of the holiday season. With less, you can do much.
However, you have to be keen not to be lured in with these discounts and things you had not planned for that are not within your budget. Doing this would be counterproductive and would send you into a financial ditch that will come to haunt you in January.
Nonetheless, you can also project what you will need in January and buy it in December using the discounts to cover your bottom line in January.
And finally, taking advantage of the sales discounts in December helps you to save money that can come in handy in January.
Therefore, not considering seasonal sales is a big mistake that might get you broke in January.
In line with taking advantage of the price tag, it is always advisable to negotiate.
The holiday season is a giving season, and you can take advantage of this feel-good season to negotiate your purchases and save a few coins while at it.
The money you negotiate could be used to buy other holiday things or pay for some holiday experiences that would otherwise be out of pocket.
In the holiday season, you want to be as frugal as you can because January is right around the corner.
Savings are monies you have put aside for investment or a rainy day. That does not mean that you use that money to make it rain during the December holidays.
You should have a budget for your December and holiday expenses to control how you spend. Without a budget, you will tend to overspend.
Sometimes, you might overspend and find yourself dipping into the savings. Dipping into the savings has two effects on your financial commitment. First. You undo the saving progress that you had made, sacrificing throughout the year. Secondly, if the savings are earning interest, then you sacrifice the earnings that those savings would have made for you.
As you are going through your festivities, ensure that you are very cognisant of how you are spending. If you deplete your savings in December, January bills overwhelm you. You might not have a fallback plan, and you will be broke as you start the year.
There is nothing wrong with spending a little more during the holidays. However, it is problematic when the holiday expenditure is beyond your means.
No one wants a good time to end, and you might be tempted to keep the good times going by going into debt. Taking on a debt for consumption is not advisable. Consumer debt starts a vicious cycle of borrowing to spend that will dig you deeper and deeper into debt.
Financing your holiday expenses with debt is setting you up for a rough January since you will not have money to take care of your affairs. On top of that, you will have a debt obligation. That is a good recipe for a rough Njaa-naury.
January has already earned its reputation for being the month when people are most broke. However, that doesn’t have to be you. Avoiding the six highlighted mistakes puts you in a much better place to navigate January.
Enjoy your holidays and avoid these six mistakes so as not to be broke in January.