Beating the January money crunch with smarter spending habits

After the festive cheer and good vibes of December, January often brings a harsh financial reality. Expenses pile up all at once; school fees, rent, electricity bills and outstanding debts, each competing for attention. For many households, the month brings anxiety instead of excitement.

That feeling is familiar to Austine Murithi, whose experience mirrors what many Kenyans go through at this time. He explains how December spending, though often unavoidable, tends to create intense pressure once January bills start rolling in.

“December comes with many expenses: gatherings, clothes, celebrations. Then January hits with electricity, water and school fees. It becomes very stressful, especially when children are going back to school,” he says.

The pressure is often worsened by the fact that December salaries are paid early. By mid-January, many people are already stretched thin.

“There are debts to clear and many bills to cover. It feels like you’re already behind before the month even ends,” Austine explains.

Like many others, he says he learned this lesson the hard way. Although he tries to save through banks and mobile platforms like M-Shwari, maintaining consistency has been difficult.

“Sometimes I lock savings, but it doesn’t last. What I’ve learned is to slow down when money is tight and cut back on unnecessary things,” he says.

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To help manage these pressures, personal finance coach Victor Marangu emphasises the importance of planning and disciplined habits.

“Budgeting is not for the rich; it’s for anyone who wants control over limited money,” he says. He adds that budgeting becomes even more critical when funds are tight, because every shilling must have a job, starting with essentials, minimum debt payments, a small buffer, and then everything else.

Marangu explains that January struggles are often rooted in December decisions. Many people overspend during the holidays, some drain their savings, while others turn to informal loans. Although many plan to save, they fail to put systems in place to support that goal.

“January problems are often December decisions plus January bills,” he says. For people with irregular or unstable income, he advises adopting a conservative budget. “Optimism is expensive. Budget based on your lowest expected income, not your best month, and treat any extra money as a bonus for essentials or debt repayment.”

He also recommends separating money by purpose, bills, daily spending, and savings, warning that mixing funds is where financial chaos often begins.

“If your income is unpredictable, your budget should be built per cash-in, not per calendar month,” he explains. When prioritising expenses, Marangu stresses that essentials that protect survival and earning power must always come first: food, housing, utilities, transport, and minimum debt payments.

“Pay for survival and earning power first; everything else is optional.”

He further advises people to strike a balance between saving and debt repayment while staying organised throughout the year.

“When money is tight, make minimum debt payments and keep a small buffer, then focus on high-cost debt. A weekly 15-minute money check-in can prevent most financial surprises. Even writing down daily expenses or checking your wallet balance once a day can make a big difference.”

Marangu concludes by urging discipline and consistency, noting that these habits are key to taking control of finances, not just in January, but well beyond it.