Bills can turn Happy New Year to Stressed New Year. Picture iStock If January was a hangover, it could spell a three-month babelaas after the festive season financial excesses. It’s the same trap everyone stumbles into, year after year.
That’s probably why Janu-worry has been dubbed the same. It’s that stack of bills that’s nauseating, and Back to School is the equivalent of the Texas Chainsaw Massacre to your wallet. But is it the time of the year, or the way that we navigate it?
Financial planner Jacques Momberg from Momberg Consulting said the problem is not January. It is how households cross the threshold into the New Year. “The biggest January mistake South Africans make is chasing a fresh start with old habits.
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Emotional spending disguised as progress, such as a new car, new credit or a new lifestyle without a plan. Financial education platforms and planners all say that Janu-worry is usually driven by the same few habits repeated every year. So how exactly do we change our habits?
RossCoet Financial Services wrote in a blog that one of the biggest drivers of financial stress is vague planning. Clear, measurable goals give direction to spending and saving and make progress visible. Momberg agreed.
“Structuring the appropriate planning as well as goals from the start will ensure you protect your plans and bring peace of mind for the year to come. Are you making sufficient provision for retirement? Do you have an emergency fund in place?” he said, and added that money with a purpose behaves better than money left to wander around.
What this means is that your budgeting must reflect reality as it is, in a mostly unedited, no-makeup edition. Financial powerhouse Morgan Stanley’s financial education unit noted that budgeting is not a one-time exercise. It needs to be updated when income, expenses or responsibilities change.
Momberg said many households underestimate how quickly hidden costs creep in. “Set up a budget for your family to ensure you are spending your income wisely. Hidden expenses creep up when we fail to plan, and debt can snowball,” he said. Online advice site The Budget Mom suggested that an emergency fund is one of the strongest buffers against financial anxiety because it prevents people from turning to credit during unexpected events.
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