Rands and Sense with Johann Rossouw

HOW TO PLAN FOR JANU-WORRY

The end of the year is upon us. While you are slowly getting into the festive spirit and planning some muchneeded R&R time, a dark cloud hangs over you – the prospect of another Januworry.

Janu-worry is a term most of us will be familiar with. Janu-worry is the hangover of the holiday season overspending and the reason you need to eat instant noodles and baked beans until your January salary hits your bank account. Janu-worry is the reason the gap between your December and January salary feels like 87 days. But, with a little planning and a bit of discipline, Janu-worry can become a thing of the past.

Plan your holiday expenses ahead of time

One of the reasons for feeling the January blues is over-spending in December. December is the month of Christmas parties, end of year staff functions and holidays. All these events can be extremely expensive and place unnecessary pressure on your budget. One of the solutions to be battle-ready for December and January is to plan ahead. Make a list of your possible December expenses and estimate what the associated costs will be. This will give you a better understanding of your goals and how much you need to put away to cover these expenses. You will also feel more in control of your own finances and start the new year off on the right foot.

Save surplus funds in an easily accessible account

Now that you have a better understanding of your possible expenses over the holiday season, you need to start putting money away to cover these expenses. As you will need to access these funds in the short term, they can not be exposed to too much market volatility – which rules out the stock market and cryptocurrency. For example, if you need R10 000 to have the December of your dreams, you cannot invest this in the stock market. If the stock market goes down by 20%, you will only have R8 000 – leaving you short of your goal.

The account you stash extra cash in for your shortterm needs should be easily accessible and offer a competitive interest rate. Examples of good holiday savings accounts are money market funds and current accounts.

Avoid bad debts

Debt is an unavoidable part of life for most people. It is, however, important to distinguish between good debt and bad debt. Good debt refers to money owed for things that can build up your wealth in the future like a mortgage or a student loan, while bad debt refers to things like credit cards, store credit and personal loans which do little to improve your overall financial situation. It is crucial to avoid paying for holidays, gifts and other ‘nice to haves’ on credit.

Bargain hunt

The internet is one of the most powerful tools we have at our disposal. Do your research and shop around to find the best possible deals. By doing a bit of research and planning ahead, you can get huge discounts on flights, accommodation, gifts and pretty much anything you can think of.

Johann Rossouw

Rossouw is a Certified Financial Planner at Fiscal Private Client Services