Holiday spending fuels January blues: Smart tips to escape them

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The Financial Strain of January in Rwanda

For many Rwandans, the start of January brings a financial challenge as the costs of holiday celebrations clash with essential expenses such as bills, school fees, and loan repayments. This pattern is common, driven by festive pressures and a lack of financial planning. Experts highlight that this cycle often leads to significant stress for households.

Jackson Kwikiriza, the chief executive of the Association of Microfinance Institutions in Rwanda (AMIR), explains that December usually catches many households off guard. Spending begins with gifts, food, and celebrations, followed by travel plans and school holidays that add pressure. Family obligations further contribute to the strain, often leading people to spend more than they had planned. This results in dipping into savings or taking out short-term loans. By the time January arrives, the bills begin to surface, and the festive cheer has faded.

Kwikiriza notes that when the holiday season ends, many households feel the pinch as income slows down. Businesses cut back, bonuses and commissions fall, casual work opportunities dry up, and some salaries are delayed due to year-end closures. Expenses remain high while income drops, leaving families financially vulnerable.

As January begins, unavoidable costs like school fees, rent increases, insurance renewals, transport, and work-related expenses start piling up before many households have had a chance to recover from December. At the same time, credit repayments reach their peak, with many relying on credit cards, mobile loans, or SACCO and microfinance institutions for short-term loans. Late payments, rising interest rates, and accumulating loan obligations can make people feel paid but already broke.

By the beginning of the year, savings spent during December or used for end-of-year bonuses are depleted. Even small unexpected expenses can create stress for people. Kwikiriza observes that the financial strain increases as people return to work and face high living costs while trying to meet new-year expectations, which can increase anxiety. Prices for food, transport, and utilities rarely drop, and some rise due to inflation or new tariffs, adding pressure on families unprepared for these changes.

The challenge is worsened by a weak culture of financial planning, with December spending encouraged in many East African households while little attention is paid to preparing for January. With few families budgeting throughout the year, the start of the new year can hit as a harsh financial shock. Kwikiriza notes that in many cases, the joy of December comes at the cost of January, as families spend money meant for future obligations, creating financial stress at the start of the year.

Tips to Avoid Financial Stress

To avoid this cycle, Kwikiriza advises families to keep money reserved for January, covering rent, school fees, transport, loan repayments, and basic expenses, untouched. He recommends funding January first before spending on gifts, travel, or hosting gatherings. If December spending causes January anxiety, it is too costly. Separating money for January is important, urging families to keep these funds in a separate account, SACCO wallet, or envelope labeled “January – do not touch” and treat it as off-limits.

Setting a fixed holiday budget and sticking to it is another key step. For instance, families should decide in advance how much December celebrations will cost and stop once the budget is spent, with no top-ups, borrowing, or just one more thing. Discipline in December helps prevent regret in January.

Saying no without guilt is also crucial. Attending every party, giving expensive gifts, or traveling beyond one’s means is optional. Keeping celebrations simple helps people focus on priorities, since unpaid rent or school fees cannot be ignored. Replacing costly habits with more meaningful alternatives can ease financial pressure. For example, instead of expensive gifts, people can give time, share meals, pray, or have conversations. Travel, hosting, and clothing choices can be simplified, showing that joy does not depend on overspending.

Kwikiriza advises avoiding January debt because borrowing to fund December fun only pushes financial pressure into the new year. The best way to enjoy the holidays is to start the year focused rather than desperate, return to work without panic, and handle the months ahead with financial security.

The Role of Financial Planning

Aimable Nkuranga, a financial coach based in Kigali, emphasizes that during the holiday season, many people feel pressure to spend beyond their means. Traditions of solidarity and togetherness come with expectations from family, friends, and community groups. He calls upon people to skip contributions or celebrations that could strain their finances, noting that generosity should not come at the expense of stability.

Nkuranga explains that giving does not always mean money. Most Rwandan families respect being present, offering time, or providing support, which can matter more than expensive gifts, cash contributions, or lavish celebrations. Planning ahead and setting a fixed holiday budget can take the pressure off spending. Learning to say no to expectations that are hard to meet is a way to protect both yourself and those who depend on you.

He states that the holiday season should be treated as a planned expense, not as an exception to financial discipline. Reviewing spending after the holidays is important, as even if mistakes were made this year, forward planning still matters. Starting in January, people can begin setting aside small amounts throughout the year for end-of-year celebrations. This approach allows December 2026 to be managed more calmly, and January 2027 to begin without financial burden.

By planning budgets and focusing on essential needs, people can enjoy holiday traditions. Generosity, through presence, time, or support, can help meet expectations without risking their finances.