How to survive being broke this January

The festive season is most certainly a joyous and splendid occasion, as well as a time for giving. Unfortunately, many of us fall into the trap of being overly generous and finding ourselves scraping the bottom of the barrel in the month of January. During this lengthy time, Moneybags writer, Alina Hardcastle searches for ways to combat your pocket-pinched January.

“Getting through January is always a battle as everyone is stretched to their limit financially,” says Eunice Sibiya, head of consumer education at First National Bank (FNB).

Experts offer the following Jan-worry tips and tricks to carry you across to the payday finish line:

  • Self-imposed house arrest

Stopping yourself from spending money can be difficult but with the right approach it’s possible to save. Instead of going out and spending unnecessarily, opt for staying at home when your finances are low. Sibiya says: “This may seem a bit dramatic but without the temptation of malls or restaurants it is unlikely that you will be able to spend compulsively.”

If you do decide to leave the house to visit friends or family, be sure not to take cash or cards with you.  Arthur Wasara, marketing assistant at DebtBusters, suggests rather inviting your loved ones over as this will save you on travel expenses.

  • Stick to your shopping list

If you need to make a purchase and decide to head to your nearest grocery store, make a shopping list and stick to it. Standard Bank suggests staying clear of premium brands, especially if the product performs a basic function. Also, if you’re parent, avoid bringing extra “helpers” along as they could convince you to purchase additional/ unnecessary items along the way.  And if you live in close proximity to the shops, Wasara suggests walking rather than driving.

  • Sell unwanted stuff for quick cash

One man’s trash is another man’s treasure. If you want to make extra cash, consider doing a spring clean and sell old items you no longer need. “Most consumers have stuff that they haven’t used or won’t use lying around the house,” says Sibiya. “Now is the perfect time, while you’re housebound to go through everything.”

There are plenty of stores that will pay cash upfront for you goods e.g. Cash Crusaders. If you do have some extra time on your hands, consider selling these goods yourself online on sites such as Gumtree. Sibiya adds:” When selling items privately make sure that you receive proof of payments or cash before you hand over the goods.”

  • Cut down on daily expenses

Besides foregoing your daily cup of java or taking packed lunch to work, there are other daily expenses to take into consideration. Sibiya suggests cutting down on your phone bill. She says:” Chatting on the phone or surfing the Internet on your phone quickly adds up. Put your phone away, or use Internet hot spots to do your messaging this month.”

Wasara adds that another thing to consider is splitting petrol costs and car-pooling to work with professionals who live in your area for the remainder of the month.  This will not only save your pocket but the environment.

  • Cancel subscriptions you no longer use

We all have our guilty pleasures but during your financial low you might want to reassess or scale down on your paid subscriptions temporarily, whether it’s for sites such as Netflix or your monthly magazine subscriptions.

  • Using savings

If cutting back on spending isn’t enough to cover your shortfall, you may want to consider dipping into any savings you have in order to bridge the gap. However, always check the terms and conditions of your savings accounts to make sure you fully understand any penalties you may face, such as early access penalties.

Nedbank’s head of transactional products and investment, Vanesha Palani, emphasises the importance of budgeting enough money in your next salary to top up those savings again. “It is very important that you consistently have that emergency pot to dip into for those unexpected expenses.”

  • Cards and online Banking

Your most expensive bank fees are for cash withdrawals at ATMs. Capitec Bank advises that you use cheaper, more convenient banking channels instead such as your card, your bank’s app or internet banking. This will not only save you money but time as you can bank from anywhere you are. Most bank apps are zero-rated. This means you don’t pay for data (or need any data) to use it. If you need to draw cash, do so at supermarket till and pay the lowest withdrawal fees.

Using your credit card can be an effective tool as you get 55 days interest-free, but it needs to be managed carefully and paid in full.

  • Overdrafts

If you don’t already have an overdraft, you may be able to get one for free or at a low interest rate. Enquire at your bank for more details. Over the next few months as your finances get back on track, ask for your overdraft to be gradually reduced to ensure the debt diminishes.

  • Reward and loyalty programmes

Using rewards programmes can be very beneficial in the long run. It allows you to get something back and the opportunity to treat yourself for your everyday spending. Sibiya says:” This is the time to max out any rewards programme that you have access to, whether it is your bank, cell phone provider or grocery store or pharmacy. Even a few cents on an item will make a difference.”

  • Final tip

You’re not alone; those around you are also feeling the aftermath of December.  Why not encourage your friends and family to cut down with you? “Let your family know that you are aiming to get to the end of January on as little cash as possible. They are integral to the plan as you will need their help to cut down on household expenses and may even help come up with other ways to save,” concludes Sibiya.