The merry moment that costs many a year’s savings

John Onyekwere, an average white collar worker living in Nigeria’s most populous state, Lagos, earns a basic monthly salary N450,000 ($1,400) and lives in Lekki, one of the highbrow areas in the city. He lives a relatively comfortable life, drives a 2018 Toyota Camry and can afford to send his two kids to one of the international schools close his house. To many, Onyekwere is living the Lagos dream, but Onyekwere while struggling to make ends meet, finds the month of January unbearable and difficult as he is usually broke before mid-month, thanks to Christmas.

The end of the year means different things to different people; to some, it means a time to reflect, while others consider it family time and for Christians, it means Christmas time. Regardless of what it means, the cost of the season is nothing but cheap.

With the holiday season comes the shopping frenzy. Many people spend the entire year planning for the Christmas season. Some consider it family time and so would go to any length to be in the company of their loved ones. others see it as a time to display wealth, while for some others, it’s finally time to make the long anticipated trip. Like many other goods and services, transport companies, no matter the mode of transportation, increase their prices during the yuletide season.

Majority of people spend their Christmas budget on gifts for family, decorations, greeting cards, foodstuffs and travel. For the Igbo tribe in Nigeria, it is customary to return to their homeland after a long year of toiling to be with family and friends; there is usually an exodus of Igbos to their villages. Some see it as the only time to open, clean their properties and receive guests, while others travel with the hope of meeting a potential spouse.

Unlike many other ethnic groups in Nigeria, it is believed that the Igbos travel to their home towns during the Christmas season to flaunt the wealth they have been able to accumulate over the year. Some even go as far as borrowing to buy vehicles just before Christmas to make a personal statement.

Some make budgets ahead of the season, others are just comfortable spending till none is left. Regardless of which, majority complain of being skint in January. After the merriment and spending, many are ushered into the new year by lack of money and many at times, abundance of the unnecessary items they bought during the festive season. This has made January, the first month of the year the most dreaded month, especially for Onyekwere who complains that his December and 13th month salary is often exhausted on relatives each time he travels back to his home town.

Overspending and the fear of January are not peculiar to Nigeria alone. A survey by professional services firm Deloitte discovered that South Africans will spend an average of $180 on gifts for the holidays, accounting for 15 percent of the average adults yearly income. Little wonder people go broke in January, having spent 15 percent of their yearly income in less than a week.

According to a 2018 study by Gallup, 33 percent of the average shopper expects to spend at least $1,000 on gifts; 22 percent expect to spend between $500 and $999, while 29 percent expect their gift spend to be between $100 and $499 while 3 percent plan to spend less than $100.

For many, January is a financially tough month because the expenses of December and the expectations of the new year do not measure up with their financial realities, making the month seem unnecessarily longer than 31 days. Worst case scenario, all the bills they did not bother to pay before Christmas eventually come back to haunt them and add pressures on the new year.

Considering the amount people spend during the eight-day holiday between the Christmas day and the new year’s day, it is almost as though people work the whole year (357 days) just to spend in eight days.

Ways to avoid being broke in January

Set a spending limit

Before getting caught up in the season or becoming too emotional by the long distant relatives with a truckload of challenges, it is best to set spending limits. Planning is important when it comes to saving money and since it is almost impossible to avoid spending money during this time of year, make a budget and set spending limits.

Only buy things that are absolutely necessary

Many people like to show off during Christmas season. Because you get to see so many relatives during this period, people place themselves under undue pressures. They fear missing out and attempt to look like their peers so they end up buying things they would not normally buy or things they can do without.

Do not spend more than you earn

This is the oldest rule in the book. If you spend more than you earn you will always be in debt, it is simple economics. Be realistic about the amount of money you actually have because the 13th-month cheque many corporate workers receive can be very deceiving as it gives some a false sense of security. To avoid being broke, approach the end of the year like you would approach the end of any other month because bills would still need to be paid in January.