How to avoid the January money squeeze: January is paid for in December
I'm Oslo, and I like looking at the months ahead with time to spare. The January squeeze doesn't come out of nowhere: it builds up in December, which is why you can also avoid it from December.
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What the January squeeze is
In Mexico it's called the cuesta de enero, the January uphill: the feeling that January is longer and tighter than any other month. December brings gifts, trips, dinners and parties; January brings installments, rent, whatever stayed on the credit card and start-of-year costs like tuition and school supplies. December spends, January collects.
Profeco, Mexico's federal consumer protection agency, has advice for facing it. The four steps in this guide follow the same idea, and they work in any country where December comes with extra spending.
1. Put a cap on December
Decide how much you'll spend on gifts, meals and outings before you start, and log everything. A cap isn't a ban on enjoying yourself; it's knowing how far you can go without compromising January.
Make your gift list with an amount per person and add it up. If the total doesn't fit, adjust before you buy, not after. And count the season's small expenses too, like last-minute gifts or unplanned outings: they're the easiest ones to slip past the cap.
2. Look at what's due in January
Card installments, tuition, school supplies, rent, insurance and taxes: make a list now of everything due in January, with its date. When you see it all together, you know how much you need to have on January 1.
If you buy in installments in November or December, add them to that list: each new installment is one more payment in January, February and the months after. In Oslo you add each payment as an obligation, choose when you want the reminder and see it in your list of what's due.
3. Pay the most expensive debt first
If you still have debts, put extra money toward the one charging the most interest, which is often the credit card. Paying only the minimum stretches the debt out and piles on interest right when you need breathing room.
If you get a year-end bonus, an extra payment on that debt is one of the best ways to ease your January. And if you can't cover everything, prioritize: first whatever generates interest or late fees, then the rest.
4. Set aside a cushion
Keep part of your extra year-end money for January, separate from your spending money. If you don't get extra money, set aside a little from each December paycheck. That cushion covers the year's first expenses and buys you time until your next paycheck.
One detail that helps a lot: check your pay dates for December and January. If December's paycheck comes earlier than usual, the wait until January's first payday is longer, so plan for those days ahead of time.
Frequently asked questions
What is the January money squeeze?
It's the financial pinch many people feel in January, known in Mexico as the cuesta de enero. After December's spending on gifts, trips and parties come installments, rent, whatever stayed on the credit card and start-of-year expenses. The month feels like it won't stretch, but you can prepare for it from December.
How do I get through a tight January financially?
With four steps in line with Profeco's advice: cap your December spending, list everything due in January, put extra money toward the debts with the highest interest and set aside a cushion from any extra money. If January has already started, prioritize payments with interest or late fees and log every expense.
When should I start preparing for January expenses?
Ideally before your December shopping, even in November, when the big sales arrive. At that point you can still set a cap, list what's due in January and set aside part of any year-end bonus. The earlier you plan, the less January depends on what happens in December.
Sources (in Spanish)
This is financial education, not advice: Oslo doesn't recommend loans or investments. Decisions about your money are yours.
