How to Stretch your Budget in January
January is a financially tough month for most of us. Usually, you’ve been paid early to accommodate the Christmas break, then you’ve spent too much of that paycheque on Christmas food, present, and sales.
Now you have to make it through January with less money than usual and over a longer period of time.
Here are my top tips on how to stretch your budget in January to make it last as long as possible.
Make a budget
The best way to stretch your budget is to lay out all of your outgoings in front of you.
Whether you do it via an excel spreadsheet or by hand, write down every outgoing payment you know you’re going to have this month. This will likely include your rent or mortgage payments, food bills, utilities, travel costs, and direct debits.
When you’ve made a budget, calculate your outgoings against your remaining paycheque. From this, you’ll quickly be able to see whether or not you’re going to be overspending or have enough money for extra activities and unexpected outgoings in January.
Now you have a few choices:
- Make a few cuts like canceling subscriptions to streaming services, gyms, or subscriptions in general
- Look into getting a small overdraft to get your by for the month of January – but if this is your choice then you need to plan your way out of it from February onwards with monthly repayments or a time limit on how long you can have it
- Stick to a very strict budget so you don’t overspend
With regards to the latter on the above list, you should aim to remove temptations from your life. By this, I mean deleting shopping or takeaway apps from your phone.
Change any plans that you have – if you can have them in the current situation – by changing eating out plans to a night-in or a Zoom chat instead. Use what you already have, don’t buy-in for the sake of it.
If you want something but you don’t need it, write it down on a wish list. Revisit the list in February and if you still want it then make a budget plan to get it. More often than not you’ll probably find you don’t want it anymore after sleeping on it for a few weeks.
Talk to others
One thing I find helpful when I’m strapped-for-cash is talking to people about it. I don’t mean go around and tell everyone that you only have £3.60 in your bank account. Instead, let your friends know that this month you can’t afford to go out or you’re attempting to save money so can you try and do free activities, like meet up for a walk or do a Zoom quiz.
Everyone knows that January is a hard month financially so don’t feel like you have to hide away the fact that maybe you don’t want to spend much this month. And definitely don’t let yourself be peer-pressured into paid activities if you don’t have the cash lying around.
Do NOT go for short-cuts
Whilst I did say that choosing to open up a small overdraft in January isn’t a terrible idea, I did also say you need to have some plan to repay it back.
Overdrafts have a tendency to feel a bit like ‘free money’ when really it’s just a slide into debt.
I tend to open a £50 overdraft when I’m feeling strapped for cash, but only if I know I can cancel it the following month. Otherwise, I look into other options like selling some books, doing some side hustle work, or even asking for a small loan from a trusted family member. I hate doing the latter, but if you need to borrow £20 to pay a bill and you get paid a few days later then it’s okay to ask.
I know a lot of people who have previously got ‘Payday loans’ over Christmas and the results have always been terrible.
Out of the people I knew, only a few were able to keep up with the massive interest on these loans. The majority of them ended up losing their homes, possessions, and more. These are scams and they should be illegal! Do not get a payday loan to tide you over.
Find ways to make a little extra cash
After Christmas, we always have a present or two lying about that probably isn’t for us. Why not sell it? I know it sounds mean-spirited, but if you don’t need or like an item but you need some money to pay a bill then it’s okay to downsize.
Alternatively, there are often items lying around the house that could make you some small amount of cash, such as books, DVDs, records, old phones, etc.
Also, if you have a side hustle like a blog, Instagram or podcast then find a way to monetize your platform in some way. Be it by offering paid advertising slots on your site, partnering with a brand, or sharing a guest post for a small fee. It could add some much-needed funds to your budget in January.
If the former isn’t for you then what about offering your services to others for a small cost? Pop a note in your local corner shop offering your DIY, babysitting, or moving skills and charge £20-£50 for the service. Easy right.
When I was younger and wanted a little extra pocket-money I used to drop leaflets into people’s doors for a local business. I also used to help a friend with her wedding decorating business and also did some taste-testing for a food brand survey. Obviously, as a teenager, I was mostly saving my money for a new PC game or a hardback book. But as an adult, twenty pounds would cover my electricity for a month or get me a solid’s weeks worth of food down at Lidl.
Be organised, creative and strict with yourself
Basically, throughout January you need to be all of the above. If you need some extra cash there are multiple ways to get it with a little hard work or some creativity.
Make sure that you have a budget for January and a budget plan. You need to know where your money is coming and going, and when. It’s all very good knowing you have a bill to pay but if you don’t know it comes out on Wednesday and you do a big food shop on Tuesday you’re kind of screwed.
And lastly, be strict with yourself. Ask yourself Do I need it, or do I just want it? Write it down and save it for next month. Just walk away and see how you feel in an hour. You’ll be surprised by how much of a habit this becomes after a while.
I hope those tips help you to stretch your budget in January. I look forward to February when it’s a short month and we can all – hopefully – enjoy a few more treats here and there.