Christmas, New Year, and Three Kings Day celebrations have concluded, and even though 2021 was celebrated unusually due to the COVID-19 pandemic, some families maintained the traditions and purchases allusive to the dates, which can lead to an economic imbalance for the start of 2022.
During the first month of the year, in Mexico and Latin America, the so-called January slope happens, a stage marked by the economic consequences of the purchase decisions made in the Christmas season, and to which on this occasion the financial situation is added related to the effect of globalization and the increase in inflation derived from the current stage of the pandemic.
The January slope is the set of increases in prices, rates, and rates that occur at the beginning of a new year, and that affects the purchasing power of consumers, explained Enrique Luna Gutiérrez, Coordinator of the Degree in International Public Accountant at CETYS University, Campus Mexicali.
Although the health contingency that began more than two years ago marks great learning about health care and forecasting, the expert said, it also sets the standard for personal and household finances. Now it is more likely that people allocate reserves for economic and health emergencies in their current spending.
To reduce the impact of the January slope on daily life and family finances, the academic shared the following recommendations:
Analyze and cover fixed expenses first: Make a list of those payments that cannot be postponed, for example, salary obligations, household services, property tax, renewal of car plates, etc.
Prepare a family budget: Evaluate how much cash flow enters the home, and then prioritize expenditures, ensuring that the difference between inputs and outputs is as large as possible. This will help you have better control of how it is spent.
Savings and investment: Separate in a defined and constant way a part of the income for savings. Having this fund will help you solve unforeseen events that may arise during the year.
Avoid using credit cards as much as possible: Perhaps during the Christmas holidays, the most used payment method was the credit card. At the beginning of the year, the ideal is to pay the capital, and if it is necessary to use it, do so by opting for purchases that offer the option of monthly payments without interest.
Some think that financial topics are reserved for business people and professionals in the field. However, the reality is that all people should count on financial prevention.
Although the January slope is challenging, it can also be a great opportunity to improve personal finances. Remember that it is not about cutting out outings, dinners, vacations, or tastes. “The secret is not to be impulsive when buying and reflect on our needs and financial possibilities,” he concluded.