How to budget in January
As South Africans recover from the festive season and enter the new year, January often feels like a financial minefield. From early December paychecks to mounting back-to-school expenses, this month can leave many households struggling to stay afloat. However, it’s also an excellent time to reflect on financial habits, implement savings strategies, and even consider opportunities like investing in property, especially with interest rates potentially moving in favourable directions.
To guide you through “Janu-worry,” we’ve compiled our top 8 practical tips tailored to the South African audience, alongside insights from RE/MAX of Southern Africa.
Here's what RE/MAX had to say:
As the new year begins, January can feel like an uphill financial battle – especially for those who received their December pay cheque early and who also have to worry about the mountain of back-to-school expenses. Managing household bills effectively during this time is crucial to avoid unnecessary debt and financial stress in the seemingly endless month ahead.
As challenging as it may be, Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, recommends that by establishing sound financial habits now, homeowners can pave the way for a more stable and stress-free year ahead.
“Building onto bad debt is not a way out, but rather a way of building up further financial stress. It is important to evaluate your budget and trim all the non-essential costs to free up resources to cover your critical bills, like your home loan,” he encourages.
With the likelihood of interest rates coming down further in the year ahead, it might be tempting to take on more debt – but Goslett warns against this. “Taking on bad debt like car loans or clothing accounts, even during a cycle of interest rate cuts, is a risky move. Lower rates might make repayments seem more manageable, but debt can quickly spiral out of control if not handled carefully,” he cautions.
By prioritizing essential expenses, trimming non-essential costs, and seeking creative solutions, you can find ways to navigate this challenging month without taking on further financial strain.
For starters, if possible, find ways to supplement your income. Sell unused items online, offer freelance services, or take on temporary work to cover gaps in your budget. If your home has the space for it, Goslett suggests renting out a room to generate extra income to help you get through the month. “If you have family who you could stay with, you could even rent out your whole home as a short-term holiday rental if it’s in a desirable enough location,” says Goslett.
If you cannot find ways to supplement your income and you’re really struggling to meet payment deadlines, it is always better to reach out to your service providers before you lapse on any payments. Many companies offer options such as payment plans or temporary relief measures to help customers manage bills during tough times.
If you do find yourself consistently struggling to meet monthly expenses, Goslett suggests that it might be time to explore more permanent solutions, like downsizing. “Moving to a smaller home or more affordable area can lower your rent or mortgage payments and could help you to get out of debt before it gets out of control,” he concludes.
Top 8 tips to save money and recover from the holidays
Sell unused items to declutter and earn cash
Platforms like Facebook Marketplace are excellent for selling unused goods. This is an easy way to boost your budget while starting the year fresh.Take advantage of rewards programs
Sign up for rewards programs like Pick n Pay Smart Shopper or Clicks ClubCard to save on essential groceries and toiletries.Plan meals and reduce food wastage
Create a weekly meal plan to avoid overspending on unnecessary groceries. Shopping at farmer's markets or bulk-buy stores can also cut costs.Refinance or consolidate debt
If you’re burdened with high-interest debt, look into refinancing or consolidating to lower your monthly repayments.Explore property investments
January is often a buyer's market, with more homes listed and better prices available. Use tools like our affordability calculator to explore your purchasing potential.Use free budgeting apps
Apps like 22seven or Goodbudget can help track expenses and identify areas to cut back.Switch to prepaid utilities
Many municipalities in South Africa offer prepaid water and electricity options. This ensures you only pay for what you use and helps avoid unexpected bills.Consider downsizing to save on rent or bond payments
If your current housing costs are too high, consider moving to a smaller home or a more affordable area.
Conclusion:
January doesn’t have to be the financially stressful month it’s often made out to be. With the right strategies, you can cut costs, recover from holiday spending, and even explore new financial opportunities like investing in property. Whether you’re saving for a rainy day or looking to buy your first home, Private Property is here to support you with insights, tools, and resources.
