How to ensure New Year doesn’t find you broke ever again

So you are back to “normal” life from the long holidays, broke and with some extra kilos to your weight?

Well, relax – because you are not alone.

Just like you, many other Kenyans have been merrymaking for the better part of December with salaries and business incomes meant for use in January.

January is here and reality is sinking: all the fuel burnt during impromptu night-outs and road trips; the exotic wines, whiskeys and premium beers; the hired cars, expensive gifts and holidays; the endless rounds of chapatis and goat meat for every relative, friend and acquaintance who stopped by now look like a bad idea.

CONSUMERISM

Well, you cannot turn back the clock, but it is not too late to draw some crucial lessons.

Mr John Gacheru, a psychologist at Upperhill Medical Centre, says the January blues are a result of succumbing to social pressure.

“There is a lot of consumerism during the festive season and people tend to do what the society expects of them — spend — irrespective of their financial status,” argues Mr Gacheru.

Financial advisors say those who had planned ahead will have it easy – and that it’s the only way to escape January blues next year.

But needless to say, a huge lot of people do not plan and the January blues are kicking in already, characterised by spending constraints on one side and huge bills on the other. The joke is often that January is longer than other months.

In December, it all starts with a leave application or companies closing in time for the festive season, the extended school holidays, year-end bonuses, dazzling Christmas lights, the right music playing in malls and street corner music shops, the invitation by relatives to a jolly time and the festive fever — for some, hysteria kicks in.

Those who choose to remain in the cities contend with night-outs with friends that could end up in nearby holiday resorts where food, drinks and accommodation may cost an arm and a leg while even those who remain at home may have to contend with visiting relatives.

Those travelling by public means often confront inflated fares, sometimes raised two to three times over.

The emerging middle-class has also seen many, who do not own private means, enter into unplanned expenditures on car hire for comfort – and attendant costly show-offs to family and friends.

But even for those who own cars, the trip upcountry involves full petrol tanks, which deplete quickly and require refills.

Once in the festive mood and in the right place, hell breaks loose on the purse.

EMOTIONAL PRESSURE

Former classmates, who did not move out of the village, crawl out of the woodwork for handouts to buy cheap liquor, favourite aunties show up and explicitly or implicitly apply emotional pressure to part with some gift or cash for Christmas shopping, an uncle hosting a goat eating appears and all he needs is Sh5,000 to buy some beer for the guests and on and on.

Add the cost of throwing a party for your immediate family on Christmas day — including buying new clothes for the children — and the bank account is already drained.

Thousands are caught in the trap of two worlds — financing the festive season for their immediate families and then that of extended families as culture, tradition and good standing in society demands.

The list of possibilities is endless and the result is a January that is financially chaotic.

Take Mr Robert Ndwiga, a public relations expert at Thinktank Marketing, for instance, who had planned early for the festive season but changed his mind.

“I am in real trouble. I had planned ahead but I used my entire savings opening a new business in Embu,” he says.

“Unfortunately, the sales did not materialise. Now school fees and rent are staring at my eye balls.”

Fortunately for Mr Ndwiga, banks and other financial institutions — including the profiteering shylocks — are already smelling the coffee and advertising loan products to bail out people who might be in financial mess and in the process drive their profits.

Some banks and microfinance institutions have already put out adverts alerting customers that they can borrow money to pay for school fees.

Shylocks are also doing booming business, with one advertising that you can borrow up to 50 per cent the value of your car after depositing the log book.

But like most young Kenyans, to Mr Ndwiga, a formal loan is not an option. “Angel” lenders such as parents, siblings, colleagues and friends — whose money does not attract any interest — are being bombarded with requests for soft loans throughout this month.

“I plan to survive on soft loans from friends and a lot of pleading with my landlord and the school principal until things get even. I will also park my car and hide it from creditors and the hawkish shylock,” says Mr Ndwiga.

Top on the list of headaches this month are school fees, food, rent, transport, electricity, communication and other emergencies.

SELF-JUSTIFICATION

Psychologist Gacheru says the consumerism often forces people to spend more than what they had set aside for the Christmas festivities.

“Self-justification starts, such as ‘It comes once a year’,  ‘My wife and children are happy’, ‘That is why I work or do business after all’,” he says. “The stronger the justification the lesser the pain.”

The psychologist says self-discipline of saving for the season and sticking to the budget is the only way out.

But for Mr Martin Oduor, a banker, that was a hard tactic.

“My December salary was paid on the 18th. By the time the January salary is paid around 27th, it will feel like this month has 45 days,” says Mr Oduor. “I used it all in the village to make people happy and I am regretting.”

Mr Gacheru says people should stop playing into the expectations of others, which often leads to overspending.

“If they value you, then a handshake should suffice,” he says. He is, however, alive to the African culture of sharing but says this should be done with just the important people.

“First, you spend on people who played a role in your upbringing like your parents or guardians. Then if you had planned to give something to the rest you may proceed,” he says. The psychologist, however, warns people against carrying cash as gift.

“There is a sense of bottomlessness when it comes to spending liquid cash. Instead, buy tangible items like clothes or foodstuffs for people,” he says.

For many, though, even with the planning, things just do not work out and they end up spending the amounts they saved for a rainy day.

Alive to the obvious financial quagmire, many retail outlets like giant supermarket are giving shoppers opportunity to win thousands of shillings worth of school fees.

In one outlet, the lucky shoppers – meaning they have to be spending already – will take home the wonderful prizes to battles January blues.

But not everyone goes into the spending frenzy.

IMPORTED SCOTCH

Mr Maurice Mutwiri has deliberately not gone out since Jamhuri Day to avoid overspending.

“I don’t get it; the other nights we drink malt beers but during Christmas my friends insist we should drink imported scotch whiskeys, which cost an arm and a leg in Nairobi clubs,” he says.

“Every time they called, I made sure that I found a reason to evade them. Now I can go to pubs peacefully since they will be less crowded.”

Mr Mac Otani, a radio journalist also made a drastic decision on how to navigate the festive season – and succeeded.

“I’m saying ‘Come January baby come’,” he offers. 

When he was paid his salary on December 20, he sorted out rent, electricity, and water bills and bought food stocks.

“With my wife, we purposefully had a modest Christmas, which was largely spent in the house enjoying each other’s company,” he says.

“No going out, no alcohol, no merry making and we had minimised spending. We already have enough food stocks to last until the third week of January,” he says.

PAST EXPERIENCE

Now, Mr Otani only has to worry about transport costs and other minor issues.

He says he made sure he had set aside some money to sort out all these, having learnt from past experiences.

Ms Muyu Kaguu, a nurse and student in Nairobi, also opted to remain in the city to avoid spending too much upcountry.

“Some time back I went to Nakuru for Christmas and I had to budget for everything carefully: fare, upkeep and miscellaneous expenses,” says Ms Kaguu.

“Though I stayed for two nights, (I had to endure) the hustle of coming back to town and as you know the fare was hiked. It’s exciting but I must confess its demanding.”

She had also planned for the festivities by setting aside some money in a bank for use during Christmas.

“I started saving in August. Last Christmas, I had problems because very key things like school had to wait since I was broke. This taught me lessons and a friend advised me on the same,” she offers.

And according to Dr Olive Gatembu, a Nairobi sociologist, being mean in a clever way could save you the January blues.

“The fact that you bumped into a drunken uncle who asked for two hundred shillings – and you had the money – does not mean you have to give him,” she says.

“You can give excuses like having gone back to school and facing a huge amount of fees or that you actually want your parents to bail you out. There are a million excuses out there that will help you manage your finances without appearing mean.”