Turn January Finances Around In 5 Easy Steps

Jan 18, 2024 | Money

South Africans (and probably the rest of the world) often talk about the financial difficulties we encounter in January. What with all the overspending we indulge in during our December holidays as we seek to treat ourselves, our loved ones, and our kids to a bit more of the good stuff that life has to offer, it’s no wonder that we feel the pinch of our January finances.

Sadly, all that fun comes at a price, and when ‘Januworry‘ hits many of us end up scrambling to keep our finances in order. The thing is, it’s not just about surviving one month. It’s about making choices that set us up for the rest of the year. As you press ahead and navigate the end of this trying month, we urge you to take into account these financial tips that will help you find relief and manage your money in a more sustainable way.

Seek Real Advice for January Finances

Essentially, this step entails avoiding the financial advice doled out by family and friends. While they might have our best interests at heart, there are very real consequences from taking advice from people who have neither the qualifications nor experience to give you proper guidance.

Your first step to a better financial year, especially considering your January finances, is to get qualified advice from a financial adviser. These professionals will assess your entire financial situation, aiding in decisions that support both your short-term survival and overall goals during this critical period.

Don’t Immediately Cancel Policies

It’s tempting, but the last thing you should do to free up some cash is to cancel your policies, including your car and home insurance, funeral cover, retirement policies, car warranties, etc.

Not only could you expose yourself to greater financial risks, like a car accident that you then have to pay for out of your own pocket because you don’t have cover, but when you decide to take up those policies again, you might find that you’ll be charged higher premiums, or you may be excluded from certain benefits. Here are some of the top policies people have regretted cancelling.

Talk To Your Service Providers

Following from Step 2, there are other decisions you can make instead of cancelling those policies you decided to invest in during better times. What you want to do is talk to your service providers and discuss what action you can take that will alleviate your financial woes in the short-term without jeopardising your financial wellbeing in the long-run.

Examples of actions you can take:

  • Your life insurer might offer reduced premiums (for reduced cover) to help you cope during financial difficulty, with the intention of restoring your cover afterwards.
  • If you have an older car (that isn’t financed), you can consider cheaper cover, like third party, fire and theft insurance only.
  • Talk to your car insurer about increasing your excess, installing anti-theft devices, using telematics, or shopping around to secure more affordable premiums.
  • Instead of cancelling your medical cover (and risking late-joiner fees alter on and waiting periods), rather downgrade to a more affordable option.  

Don’t Disinvest

The reality is that when you disinvest, you lock in whatever is happening at that moment. If your investments are showing losses and you think this is the best time to stop investing because you need the cash, those losses are locked in. But if you stay invested, you could benefit from a big recovery, which is far better for your future than what you could save in the now by putting a stop to this expense.

We know managing January finances is tough, especially when stressed about getting through this month and the next. That’s why you need an expert for the best advice, avoiding hasty mistakes in these crucial times.

Your Credit Card Isn’t The Answer

Credit cards carry some of the highest interest rates, so if you use your credit card to cover your living expenses, you’ll pay this back plus loads more in interest. Instead, look at how you can reduce what you spend on non-essential items, like outings, beauty treatments, clothes, your daily cappuccinos, takeaways, and that sort of thing.

Feel informed?

We hope this info helps, but truly, if you’re struggling then don’t procrastinate. Talk to an advisor and consider applying for relief if you’re really worried about being able to pay your bills.

Don’t forget that AA Inform is home to a range of useful tools and resources, including access to multiple car and home insurance quotes, property valuation reports, and much more. 

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