The beginning of the festive season with its rising expenses, can disrupt most household budgets. We end up splurging more in the festive season, only to regret it later when we are confronted with depleted bank statements.
However, there are ways to indulge in the festive extravaganza without doing too much damage to your pocketbook
1. Make a Budget
While most of us already know this, the issue lies in the fact that we usually have a rough estimate of our budget. This rough estimate is the main reason for going overboard on spending. It is extremely important that we have a detailed and itemised budget. Suppose one has an ‘x’ amount of savings kept aside, one needs to determine the percentage that would be spend on food, clothing, décor, gifts etc. It helps one realise the amount one wishes to spend versus the amount that one could potentially spend, thereby forewarning individuals to analyse and plan their expenses accordingly. Avoid using the credit card. As much as we all love the swipe of the card, it is a stimulus for an individual to go overboard.
2. Track your spending
A detailed budget is nothing without tracking your expenses. While the temptation of impulse buying is too hard to resist, tracking your spending will ensure that this desire is curbed since you have a financial plan to stick to. There are many money management apps that are built for this exact purpose and can be of great help. These apps help by digitally tracking your expenses and thus help you safeguard your savings. Some apps will even help you craft a plan that will help you plan your holiday budget so that you meet can keep your expenses on track as well have fun.
3. Be careful of the Big B
Seasonal bonuses can be a great source for structuring your investments. However, the temptation to splurge it away is very hard to resist. As a result, a person may spend on inconsequential things only to feel remorseful at a later stage. While it can increase your budget for the festive season, it is important to understand that the bonus doesn’t just serve the purpose of being another source to spend from. The bonus can be a great source to plan future investments. Plan carefully, invest for the long term and it can be a great money multiplier. The best way to go about it would be to invest in a long term investment vehicle, let it grow and reap the benefits at a later stage.
4. Follow the DIY trend
DIY preparations go a long way in not only limiting oneself to the budget but also can be a source of great fun for the family as well. Festivals are the best time to let the creative heads of the family get together and carve out something instead of opting for fancy and expensive lamps and paintings, not to mention the emotional value it carries. It is extremely easy on the pocket as well. Also, do not underestimate the power of recycling. Innovative ideas can be combined to both save money and keep the festive spirit alive.
5. Save for the festive expenses
While this may sound a little inane, it is in fact a practical idea. One can pre-emptively save for larger future expenses. This money can be utilised for any large future festive spends. This is a neat trick reflects the old dictum of ‘saving today for better tomorrow’.
Festive seasons are meant to be enjoyed with families and your loved ones. Don’t let your debts or expenses rob you of the joy of the festive season. Make a plan to ensure prudent savings and expenses. Avoiding over-indulging during festivities’ may seem unpleasant but the long term benefits from planning your spending and investments will more than make up for it.
Disclaimer: The above opinion is that of Mr. Vaibhav Agrawal (Head of Research & ARQ -Angel Broking) & is for reference only.