Financial Hangover ? 2015 has gone and 2016 has just started, but this time of the year many of us overextended and overspend during the festive season, expensive holidays, gifts etc. For many people the reality is that January is a more expensive month. Expenses for schools, Increase in premiums and other costs. 2015 has also seen some interest rate increases and a sharp inflation in food prices. 2016 is going to be an other hard year, with interest rates continue to rise, food prices going through the roof, taxes on the up. The perfect storm.
Although January might be a financially stressed month, it is a good time to start planning for the year ahead, to try to get rid of debt and reign in your spending and hopeful save some for that rainy day.
What financial decisions to take in January
- First of all face up to your problems don't deny and wish them away. They will not go away if you don't address them
- Analyse your short term income/expenses. This will give you a quick indication if you will have a cash flow problem in the short term<./li>
- See what unnecessary expenses you can cut immediately, think about all those coffees and lunches, takeaways etc.
- See which expenses you can postpone, or which services you can temporarily do without (maybe even permanently) , think DSTV (temporarily downgrade or stop), your Car Service can maybe be postponed till February, just don't go to much over if the car is still in warranty.
- Check around your house, maybe there are items you can sell because you don't use them or you got a newer model as a present, thinkk selling your older game console if you got a newer one, etc.
- Do not get your self further in debt.
- Try to consolidate your debt, if all your small debts are combined, you will most probably get a better rate and it is far easier to manage. Less risk of skipping a payment.
- Speak to your financial institution if you need help, or struggle to pay up. Don't wait until they come knocking on your door.
- See if you can downscale, smaller house, smaller car etc
- Go through all your insurances and see which ones are overkill and which ones you can take a cheaper plan.
Finally try to live a more frugal lifestyle and don't try to keep up with the joneses if you can't afford it. There is no need for a new car every second year.