Financial planning tips to tackle Januworry and secure your future

The new year is here, and many will be looking to improve their finances, but the real question is, where do you start? The first step is simple: know where you stand. When it comes to financial planning, knowledge is power, and understanding your current financial position is the foundation for a better 2026.

1. Start with a financial check-up

Just as you would review your health, you need to review your finances. This is not a DIY exercise. Book a meeting with a financial advisor to assess your current plan and whether it is still correct and adequate. A proper review will help you build a realistic budget and prioritise your spending between necessities, nice-to-haves, and contributions to your future. A good benchmark is to allocate 50% to 60% on needs, 20% to 30% on wants, and at least 20% on saving for the future.Currently, many South Africans are far from this ideal. Debt servicing can account for as much as 62% of income, well above the recommended maximum of around 30%, which makes financial progress extremely difficult.

2. Save money by reviewing your current expenses

A quick review of your existing costs can unlock savings immediately.

• Reduce debt costs: review your interest rates and consider consolidation or balance transfer options that could lower your monthly interest burden and save significantly over time.
• Negotiate your home loan rate: if you’ve had your home loan for more than a year and your account is up to date, request an interest rate appeal. Improved income, education levels, and stronger banking relationships can increase negotiating power.
• Review car insurance: your vehicle depreciates, so your insurance should reflect the current value. Compare premiums and ensure you’re not overpaying.
• Cut unused subscriptions: cancel streaming services, opt-in app subscriptions, and unused memberships that inflate monthly spend.
• Avoid impulse spending: give yourself 2–3 days before buying anything non-essential. If you still need it after that, do your research to ensure you get the best deal.

3. Plan ahead so you’re not caught off guard

Januworry often happens because people don’t plan for predictable expenses. The solution is to plan for the year ahead.

• Maximise tax incentives before the end of February: contribute to a tax-free savings account and review retirement contributions to reduce tax liability and potentially improve disposable income.
• Hold a monthly money meeting: meet with your spouse, partner, or family to review spending and keep each other accountable. Celebrate wins together.
• Create a budget calendar: plan and allocate budgets for birthdays, anniversaries, holidays, car services, tyres, school stationery, and uniforms. Many banks offer savings ‘pockets’ so you can set aside money for each category and access it when needed without creating debt.

4. If debt payoff is your 2026 goal, start strategically

If your plan includes paying off debt, choose a clear strategy:

• pay off the highest interest rate first, or
• pay off the smallest balance first for quick wins

Even small increases in repayment make a major difference over time. For example, contributing an extra R500 per month on a R1 million home loan at current interest rates can reduce the term from around 20 years to approximately 17 years, saving about three years and roughly R220,000.

5. Prioritise wellness as part of your financial plan

Healthcare costs are rising, and chronic illness is a major financial risk. Hospitalisation claims linked to chronic illnesses increased by 15% year-on-year, while gap cover claims have surged due to specialist shortfalls. Critical illness claims also remain high, with cancer accounting for 38% of payouts, followed by heart disease at 27%.

Preventative care matters, prioritise annual check-ups and a healthy lifestyle. At the same time, ensure you have appropriate medical cover and financial planning in place so that unexpected health events do not derail your long-term goals.

* Chetty is the head of advice at Vouch.co.za.

PERSONAL FINANCE