No one can ignore the usual Januworry pet peeves such as buying school uniforms, stationery and having to put aside money for fuel . 

This vicious financial nightmare hits many of us and it’s all thanks to overspending that comes with the festive jamboree and unplanned splurging for our friends and family. 

Financial experts, however, say all this could be avoided if we put money aside during the course of the year to put Januworry blues at bay. January is a good month to start saving to achieve your end-of-the-year goal. 

Madoda Faleni, an official at an Eastern Cape municipality, got a big surprise when he finally broke his two 5l piggy bank bottle last month, which he had been using to save R5 coins since the start of 2022.

“I was a bit hesitant to open them because I wasn’t quite sure if I had saved a lot of money. But my wife and daughter put me under pressure until I eventually  opened them. I was surprised that all those coins I have been collecting were worth almost R10,000. I’m going to use that money for my daughter’s schooling needs this month and I will reinvest the change,” said a beaming Faleni, 32. 

He said filling up the tins with coins was not hard.

“Most people waste money on unnecessary things and we underestimate what the R5 we get from grocery shops can do if we save it. This year, I will set up four piggy banks and hopefully double what I made last year.”   

According to FNB, the first step in saving or investing is knowing what you are saving for and what amount you need to put away each month to achieve your goal.

This step will require you to consider your monthly cash flow identify what items you don't need monthly.  Draw up a budget, reduce non-essential expenses and leave yourself a set amount for entertainment.

It also helps to build into your budget emergency savings. 

“Having three months’ salary put aside will mean not having to withdraw investments early in case of an emergency and allowing your goal-based strategy to play out,” says the bank.

It is also advisable to eliminate short-term debt like credit card expenses because the high interest rates . Eliminate debt exposure by paying off short-term expensive debt first. Long term, this will mean more funds to put into your savings and investments.

It is also important to establish the correct saving and investment vehicle that will suit your goals and allow your money to grow within the set time frame. 

“Do not jump in and out of long-term investments and savings. This will increase the fees paid and not allow you to achieve your long-term investment and savings yields,” says the bank.

According to the Financial Sector Conduct Authority most-recent report on financial literacy in S A, almost half the adult population (46%) reported that they had experienced an income shortfall and 19 of them stated they are unhappy with their financial situation.

The report also shows that South Africans are increasingly struggling to pay their bills, with 70% of low-income earners, and 28% of the higher earners finding it difficult to make ends meet. It said many people, especially the vulnerable and the poor, embark on unsustainable debt coping strategies.

“Though these insights are a cause for concern, it doesn’t mean the situation is hopeless. On the contrary, it provides a valuable opportunity for learning and growth,” says Susan Steward from Budget Insurance.

“You can change your financial situation for the better with the very next decision you make. It comes down to proactive effort, discipline and smart money management.”

She says it is important for consumers to use the internet to empower themselves.

“The web is filled with free explainers on financial concepts and terms from experts on how to make better money decisions. Some of your friends may also be smart when it comes to money decisions and valuable to chat with. Use these resources to make your money grow,” said Steward.

She advises that it is also key to think carefully when reducing what you may consider unnecessary expenses.

“It’s a good idea to cut unnecessary or non-essential expenses first, but be mindful. When money is tight there are certain expenses you may be tempted to cut, like vehicle and home maintenance or your monthly insurance premium. This could bring some short-term relief, but may end up costing you far more in the long run,” said Steward.

Some of the simplest ways of saving money include:

• Pack your own lunch
• Resist buying coffee at work
• Buy non-perishable items in bulk at a lower per-unit cost
• Buy expensive items – from clothing to new tyres for your car – on sale
• Buy seasonal fruits and vegetables

Source: Absa