Don’t let money-related issues dampen your festive spirit. You just need to follow some handy financial tips.
The festive season is almost here and you must be gearing up to celebrate this auspicious period with your family and friends with lots of enthusiasm. However, how you spend money can play a crucial role as you buckle-up to celebrate various upcoming festivals like Dussehra, Dhanteras and Diwali. As such, you also need to gear up with the money management strategies if you really want to enjoy the festive time to the fullest. It’s important to understand there would be many financial responsibilities that you will need to meet after the festive period is over. So, money management can play a balancing role between pre-festive and post-festive spending requirements.
Let’s discuss a few money strategies you would do well to follow ahead of the festive season.
1. Make a budget for your festive spends
People who don’t set a spending limit often end up spending more than their capacity. The best way is to make a budget for your festive spending. You may get a bonus during the festive season; you should use it wisely to reach your financial goals instead of losing it all on unplanned expenses. While making a budget, set the upper limit of festive spending. Make a list of essential things in which you want to spend the money and prioritise them according to their level of importance. In this way, you can use the fund for spending on highly important things first and lesser important things later. Try to limit discretionary spends and also keep an eye on savings while you set your festive season budget.
2. Avoid borrowing to spend unless it’s highly essential
Banks and lending institutions usually come up with several loan offers during the festive times. However, you must think it through before applying for any such festive loan. It’s not advisable to discount your future earnings to satisfy the spending eagerness temporarily. Unplanned debt can put your financial planning into trouble. So, try to spend as per what your pocket allows you. Use debt for festive spending only when it’s genuinely essential and there are no alternatives available. Also, have a clear and doable repayment plan before taking any loan.
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3. Track your spending
While spending money, don’t forget to note down each expense. It will help you to adhere to the threshold that you had set while making the budget. Tracking down the expenses also helps in estimating your remaining spending capacity, so that you can use the remaining money for high priority things. You can always take the help of any free budget-tracking mobile application if you’re not comfortable with writing down your expenses.
4. Avoid impulsive big-ticket purchases
You may get things on great discounts, both at nearby stores or on shopping portals, during the festive season but that doesn’t mean you should go overboard to exhaust your spending capacity in making big-ticket purchases. With easy loans, shopping discounts, and festive mood, anyone can slip away and indulge in a shopping spree. However, you should ideally avoid getting into such a situation. A few minutes of shopping satisfaction can easily destroy your highly-precious financial goals; it’s time to stick to your priority spending list.
5. Maintain sufficient liquidity
Keep your spending fund separate from the regular liquidity that you maintain in daily life. If you use the daily liquidity to spend during the festive time, you may later find it difficult to pay for your regular expenses. Also, try not to dig into your emergency fund to pay for festive expenses.
6. Select the right spending tool
While spending during the festive period, it’s important to use the right spending tool. Though you may get attractive offers and discounts on a credit card, you must ensure not to breach your budget. You can also look for offers on debit card payments — in doing so you will minimise the chances of accumulating unplanned debt. Also, if you are planning to use the EMI facility available through your debit or credit card for certain major purchases, do check out the charges attached with it before taking the plunge.
In conclusion, these smart money tips will go a long way to ensure you make the most of the upcoming festivities without harming your financial health. Wish you all a very happy festive season!
(The author is CEO, BankBazaar.com)