How to avoid the January money woes

Businessman turning his empty pockets inside out. Fotosearch
Businessman turning his empty pockets inside out. Fotosearch 

An accountant by training, Patrick Kariuki, chairman of Kenya Association of Investment Groups, has no problem with his finances come January.

The holiday season is marked with shopping, holiday trips and meals at expensive restaurants across the city and country. If one is not careful, all this leaves a dent in the pocket that carries on months into the New Year before one can fully recovery.

Patrick’s financial discipline in sticking to a laid out budget has him sailing through what most consider a financially tortuous month. A task very few have mastered, having your finances in order after the festivities is one that Kariuki and his team have been equipping their Chama members with.

Planning for the New Year begins early; make sure that you have a budget set down for the expenditures during and after the festivities. “You should have an investment policy that is drafted by a professional,” he says Kariuki. A list of all your expenses and financial commitments is the first step.

Those who fail to keep within their budgets will be forced to bear the burden as the bills pile and notices file in. “If school fees is due in January, pay it in advance,” he says, “it reduces the chances of you having a deficit come January.

He further advises one to avoid taking loans in December when temptations to spend on other things are high. “Wait until January or February when you are more financially sane.”

Even with a budget in hand, the need to splurge is usually quite strong during the festivities. To keep from maxing out your credit card or depleting your debit accounts, invest in a prepaid card. KCB has a one that is simple and convenient to use and even NationHela can double up as a pre-paid card.

At the beginning of each month, top up your card with the amount you wish to spend come December and lock away all your other cards at this time.

With the cards in hand, take advantage of the post-holiday offers before they lapse. You’ll find yourself saving more than a quarter of your budget on shopping expenses. Local retailers have introduced coupons in local dailies.

Taking advantage of the in-store and coupon discounts for your shopping will take the extra weight off your pocket and leave you with enough to spend on something else.
Technology is your best friend. In the era of smart phones and tablets, you have no excuse to not keep tabs of your expenditure at all times. Book keeping has gone digital with the different app markets providing applications to monitor personal and professional finances. Download an app that will help you know what is necessary and what can wait until the purse strings are loosened.
However, if you do find that you have gone overboard with the spending in the next year, then you’ll need to devise solutions to deal with the aftermath.

Always have your bills sorted by order of priority, offsetting the most urgent first as you wait for finances to deal with those that have a longer grace period. If you must seek additional financing, look for an affordable credit plan that will not take months on end to offset. Sit and discuss a payment plan with your service providers.

Avoid taking a loan to pay off another loan. Sit with your creditors and device a repayment strategy. It is also important to seek professional advice from personal finance consultants to help you in coming up with a recovery plan for the dry month.

A professional will be able to advise you on where the leaks in your finances are as well as how to get some income. This will save you from turning into a perpetual borrower, taking loans from all avenues to pay off creditors.