DebtSafe Blog

Janu-Worry 2015 Survival Guide: 6 Steps

It seems that all indications of an epic 2014 summer vacation has come to an abrupt end. With 2014 now only a distant memory many South Africans are faced with Janu-worry 2015 and it’s a scary one.

If you are feeling a bit overwhelmed by Janu-worry 2015 know that you are not alone. As far as months go January is a notoriously tough month. Many of us got caught up in the festive vibe, spending January’s cash almost mindlessly. So what now? We have put together a 6-step survival guide. Which will not only help you survive Janu-worry 2015 but also set you up for success throughout the year.

Step 1: Don’t make more debt

When it comes to purchases; stop, take a step back and give yourself some breathing space. January’s unsavoury reputation is a direct result of people spending their money without giving it a second thought. If you want to have an improved financial year you need to adopt the correct attitude toward spending.

Start by asking yourself if what you want to buy is a need or a want. Needs, for example, are food, shelter, safety, health, insurance, and education. It will take some discipline to master, but come January 2016 you will be relieved that you started today.

Step 2: Become aware

This is probably the most stressful step. For some, it will be hard-hitting to face reality, but it can’t be avoided, not a minute longer. Remember, just because you are ignoring your bills doesn’t mean they don’t exist. In fact, those unopened envelopes seem to multiply each time you look the other way.

Step 2 is crucial since you won’t be able to find the way forward if you don’t know where you are now. Start by opening your bills and pulling your credit report. This will give you an accurate indication of where you are and what you owe.

Just reading this may give you major anxiety, but whatever you do don’t quit at this stage! Push through and you will be well on your way to gaining control over your finances.

Step 3: Knuckle down

With Step 2 completed, you might feel unimpressed, to say the least, with past-you. But that is not the present-you. You are now empowered to turn Janu-worry 2015 around.

This is the time to cut back on things you don’t need. Past-you would have given in to the urge to splurge. The present-you understands the difference between what you want, what you need and what you can afford. By using sound reason and determination you will override the urge to splurge.

A great way to do this is by going on a spending freeze. During a spending freeze, you halt any discretionary spending, often for one or two weeks. This will give you a close-up look at your finances. You’ll be able to see what your financial priorities are, and where you can realistically cut back. Once you have cut back on unnecessary spending you will be delighted to see how much it all adds up.

Step 4: Set financial goals

Setting up goals will help you stay on course. Firstly, determine what your short-term, mid-term and long-term goals will be. Remember, your goals must be realistic. Now determine an estimate of the amount of money you will need for each goal. Then prioritise these goals in order of importance, and decide on the time it will take to save for each of your goals. Lastly, figure out how much you will have to save per month to achieve these goals.

Step 5: Plan to pay off current debt

A big priority is to pay off current debt. The best way to approach it is by settling the smaller debts first – while still paying the minimum on larger debt. As each smaller debt is repaid, the money used to pay that debt is then used for the next-smallest debt. Thus, as your debt gets less, you can allocate more funds to the remaining debt, creating a snowball effect. Just remember, this will only work if you do not incur any more debt.

Step 6: Budget, budget, budget

A budget isn’t like a crazy fad diet where you deprive yourself. So stop those negative budget vibes. Your budget will help you to spend less than what you earn. That means more money! If you want to reach personal financial freedom, a budget is invaluable. It might feel daunting, but just start with the basics and soon you’ll be a budget ninja. Make sure to include savings in your budget for emergencies and big-ticket items.

Now you have the skills to conquer Janu-worry 2015. You can turn things around and make sure that this time next year you will be feeling a wonderful sense of accomplishment.