How to stretch your December salary

Stretch your December salary into financial wellness.

On the calendar January has 31 days, but when you are waiting for payday to arrive, it can feel more like 948. However, with a bit of planning in December, all that financial stress can be avoided.

Some of us treat December like getting married: all the planning and money go into the event, with little thought given to what comes after. This is not a mindset we can afford when it comes to January. Most people get paid early in December, so they have cash for holiday spending, and the new year arrives with a lot of extra expenses for parents whose children return to school.

The best way to avoid a post-December headache, is to do pre-December planning:

1. Before you even look at the money you have available, draw up a plan for your holiday and/or festive season celebrations and activities. Take 30 minutes or so to really think about what you’d like to do and experience this December. If you have a spouse, partner or children, involve them too.

2. Now look at the money you have available for non-routine spending. But wait – how do you know what that amount is? The answer is your personal budget. If you use a monthly budget planner, it will be easy to know how much you have available for holiday spending. If not, you have to make a list of all the bills you have to pay and the things you have to buy to get through the month. When you have that amount, you subtract it from your total income for December. The balance is – in theory – what you have to spend on holiday fun.

3. Before you turn your mind to your holiday list, remember your December salary has to stretch all the way to the end of January. Therefore, also make of all your January expenses, including non-routine items like back-to-school expenses, and make sure that you know how much you need to get to January payday.

4. Now it’s time to look at the fun list. Chances are that your list will be longer than the money you have available. You can deal with this in two ways: cut back on your holiday plans or find savings in your budgeted expenses. Here are some examples:

• If possible, put some of your subscriptions on hold for the time you will be away from home.

• Combine trips to save on fuel and parking costs.

• Plan your meals a few days in advance so that you only go shopping once, only buy the ingredients you need, and use everything you buy.

• Consider a picnic in the park instead of a restaurant meal, or join forces with a friend or family member to do bulk food preparation.

• Gifts are a huge money guzzler, and you can often save a lot by thinking about them differently. Focus on experiences rather than things, or agree with your loved ones on a set amount per person.

5. Use these savings opportunities to adjust both your personal budget and your holiday list to give a new, and more accurate picture of your finances.

6. Track your spending throughout the month so that you always know what your money situation is. If you overspend on one day, cut back on the next few days until you are back on track. And if you show a saving, it can either be spent on a treat or, better still, help you to clear debt quicker or boost your January savings.

Give yourself the best gift this December, which is spending with a plan, and start your new year without financial stress.