Keeping your festive spending under control

Januworry hits hard when December’s early payday meets festive overspending, but with a few simple habits, you can avoid the five-week squeeze.

Holiday cheer fades fast, your expenses don't. Keep a weekly spending cap and resist the urge to spend more just because you earned more. Image: Adobestock

Most of us have heard the saying “Januworry”. If you haven’t, it’s South African slang for the financial stress people often feel at the start of the year, a portmanteau of January and worry.

January often feels like the longest month in existence (I’m convinced it has about 300 days). This is mostly because many people receive their salaries and bonuses a week earlier in December, usually around the 19th or 20th, and then “let their hair down” for the festive season. That means the gap between December’s early payday and January’s salary run can stretch to a very long five weeks.

Between year-end functions, Christmas parties, family visits, travel, and holidays, expenses can add up quickly. When reality settles back in after New Year’s, many families suddenly realise it’s also the start of a new school year, and the post-holiday blues come with a few new bills.

The good news? There are simple ways to avoid overspending and relying too heavily on credit. Everyone deserves a proper break, but good spending habits now can save you a lot of stress later.

Avoid credit

Playing financial catch-up is never fun. Increasing credit limits or maxing out cards is really just kicking the can down the road, with interest. Try to avoid using credit for festive spending unless it’s a genuine emergency. The interest snowball in January is the quickest way to turn holiday cheer into holiday jeer.

Be realistic

There’s no perfect formula for festive spending, but you can set realistic expectations. A budget should always be monitored, but it becomes especially important this time of year when we’re all feeling a bit more relaxed (“tis the season”, after all). Keep a close eye on your balance and set sensible limits – for gifts, outings, and travel.

Set a budget

Take some time to figure out how much you’ll actually earn in December (especially if are fortunate enough to receive a 13th cheque) and make sure you’ve planned for the weeks after Christmas and New Year’s.

From an economics perspective, people tend to spend more as they earn more. This behaviour is captured by the concept of the Marginal Propensity to Consume (MPC), introduced by economist John Maynard Keynes.

MPC is simply the portion of every additional rand that you spend. If your MPC is 0.8, you spend 80% of any extra income. That’s why when salaries rise, spending often rises right alongside. From groceries and eating out, to travel and big-ticket items. A high MPC usually means lifestyle creep follows closely behind.

You will still need to sustain your expenses after the holidays, so make sure you make provision for this.

In short: decide how much you are willing to spend each week and stick to it. Don’t fall into the trap of increasing your spending just because your income increases.

A budget is not a cure-all for financial success, but it does assist you in keeping an eye on your expenses not overspending.

Save now, benefit later

Put some money aside now for the final stretch of January. Once you’ve saved for essentials – groceries, fuel, electricity, school costs, transport, and other monthly expenses – you’ll have a clearer picture of what you can comfortably spend during the festive period.

A bit of planning now can help you enjoy your holiday without that familiar Januworry stress waiting for you on the other side.