Most people will be paid around the 16th of December and in addition may receive a 13th cheque. Given the craziness of the festive season, the money is soon spent, leaving very little to meet normal monthly expenses by January, let alone the extra financial burden of the New Year.
If you are a consultant, self-employed or working on commission you will most likely see a significant drop in your income in January. This is because virtually no work happens from 16th December so you need to plan for your December salary to last for two months.
Put a strategy in place now so that you do not have to take on debt at the start of the year:
Pay your bills early: Once the money has left your account you can‘t spend it on other things. There is also less chance of you making a late payment because you have been away. Late payments incur unnecessary penalties.
Pre-paid credit card: If you are going to shop with your credit card, put in money upfront and limit your spending to your budget so there are no unexpected credit card bills in January.
Budget for January: If we think the festive season spending is bad, remember January brings another set of expenses, especially if you have children with school fees, school books and school uniforms. Pay the school bills now and buy some of the school items early in December to spread the expense and avoid the last-minute rush.
Be sensible with your 13th cheque: If you are fortunate enough to receive a 13th cheque, this is a great opportunity to pay off your debts - so don‘t squander it. Use a small portion to do something special this holiday. If you are debt free, put a portion of your 13th cheque away to kick-start your savings fund for the year.
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