Build an emergency fund for January 2020


Build an emergency fund for January 2020

The last quarter of the year is often a time to reflect, relax and take it easy after a long year. It’s the time you spend with your loved ones and perhaps take a shot’ left with your family. All these are necessary for your quality of life, but it can come with a high price tag if you don’t plan well, leaving you with the Janu-worry blues. That is why it is important to build an emergency fund or a buffer for January 2020, well ahead of time.

  1. Budget

Most people get paid on 15 December, meaning you will have 45 days to get through until the next pay day! I don’t know about you, but that is a long time to work with one salary.

This means that you have to plan thoroughly, even before you receive your salary. Consider all the important debit orders that need to go off your account and put the money aside.

To ensure that you will not be dipping into your regular instalments, like your bond, car etc, it helps to create a separate account. Call it the ‘Fun Money’ Account, if you want. Here, you can transfer all the money you are going to need for festivities. Once the funds in this account start to run low, you know that it is time to take it easy and not spend as much.

  1. Talk about money with your family

Money is still a topic most families are not comfortable discussing, but it is important that we do. Talking about money allows us to align our expectations and set boundaries. Failing to do so often leads to awkward situations and bad blood.

Going into the last quarter of the year, sit down as a family and agree on a budget in advance for the festive season. Draw up a plan of activities you want to do, the days on which you will eat take-out, etc. This way, you can hold one another accountable to the plan.

  1. Save your bonus

If you are one of the lucky ones receiving a bonus this year, don’t blow it all on the holidays. It’s never an easy temptation to ignore, but by putting a percentage of it away, you will create a safety net for that long January month. Calculate how much all your major expenses will cost, then stash those funds away in a Savings Pocket for the January debit order run.

  1. Use the envelope system

The envelope system is one of the best ways to budget, especially around the festive holidays. You use cold hard cash to control your spending and, when you run out, you stop spending.

Say, for example, after sitting down with your family, your estimated spending comes to R10 000 for the family holiday. You can break it down per week, where every week will cost you about R2 000. Every week, draw R2 000 and put it in an envelope to cover that week’s spending. Once the money runs out, you can’t spend a cent more. Fight the temptation to dip into the next week’s allotment if you run out too early. The sooner you spend that cash, the shorter your holiday will be.

There is also something profound in using hard cash instead of ‘plastic’ money! It means you see every Rand as it leaves your envelope. Trust me, it changes your behaviour!

There are many ways to build a buffer to avoid the ‘January 2020 hangover’, but all of those options require planning. If done right, this festive season will be a holiday to remember!

Visit the African Bank website or like them on Facebook , Twitter and LinkedIn

Up Next

Grow your money
The flexible nature of working from home is appealing for new moms and many opt for this when the pitter patter of little feet is on the horizon.

Publish Date: 17/04/2018
Read more
Getting to know Basani Maluleke
A new era started at African Bank on 1 April 2018, the day Basani Maluleke, was appointed as our CEO. Basani follows in the footsteps of Brian Riley, who saw the Bank through curatorship and laid the foundation for the exciting future that lies ahead of us.

Publish Date: 01/04/2018
Read more
Three tips: How to use your credit card wisely
There are more than 8.8 million credit cards in issue, and more than 38 types of credit cards available in South Africa. South Africans have on average one credit card. So. Question is, are you using your credit card wisely?

Publish Date: 22/02/2019
Read more
Dad, here’s how you can be your child’s financial superhero
Fathers are often their children’s first real-life superheroes.Children do as we do, not as we say. So dads, our question to you this month is – are you modelling good financial behaviour?

Publish Date: 04/06/2018
Read more
Saving to educate your children? Get the most out of your money
There is no greater gift that you can give your child than the gift of a secure education.We all want to give our children the very best, however, ensuring that you give your child a quality education costs money.

Publish Date: 09/07/2018
Read more

About African Bank

Our mission is to be a successful Retail Bank offering a wide range of products and services to the consumers of South Africa. The people who work for African Bank represent the diverse population of South Africa; therefore we are a reflection of you, of all South Africans. We seek to provide value - more than our consumers expect of us. We promise to live our purpose 'humanity through banking' in all that we do and we are confident that we can, because 'We are You'.