As we step into the second half of 2024, the excitement is palpable for the festive season that has begun with Haryali Teej and Independence Day, Soon, there will be Raksha Bandhan, Ganesh Puja, Navratri, Dussehra, Diwali, Chatt Puja, New Year Celebrations and the festivals afterward. The festive season adds to the cheer among all of us as India becomes shopping nostalgic. But with that nostalgia comes the financial perils for some of us. Festive celebrations should not cause you any financial worries. On introspecting, you will find a lot of unnecessary expenses during the festive season. Let’s find out where we go wrong and how to correct our financial path this festive season.
Financial Mistakes You May be Committing During the Festive Season
Festive season leads to massive expenses on clothes, accessories, electronics and several other stuff. People often go overboard and end up spending too much only to regret it later. Let us list out the potential financial mistakes Indian households make during the season.
Excessive Use of Credit Cards and Loans for Shopping
With no holds barred approach, people push their spending limits during the festive season. Whether they have savings or not does not matter. They shop using credit cards and loans. What sells the most during the season is a list of iPhones and high-end smartphones. These involve high costs.
An iPhone, for instance, can start at around 60,000 and go up to well over INR 1.5 lakh. High-end smartphones also come at a relatively higher price. Adding clothes, jewellery, accessories and other items to the shopping list, the expense volume becomes way steeper to handle. Buying all these on a credit card will likely lead to high interest costs.
Avoiding credit card interest, which can go up to as high as 36-40% per annum, is a must to enjoy financial flexibility.
Breaking Sound Investments Like Mutual Funds for Festive Season Purchases
Festive celebrations remain high on people’s agenda, so they even break investments like high-performing mutual funds, which they may have invested for their financial goals such as retirement, for shopping. An absolute NO this is for all no matter how tempted you will be to break your investments.
Festive purchases such as iPhones and smartphones, in particular, can lose rapidly in value, so the money spent on them won’t lead to much resale value. No point in breaking solid investments that can secure your future. Festive celebrations can be modest, not your life, more so after retirement when active income for you will likely stop.
Here are the Tips to Manage Your Finances This Festive Season
Make a Budget for the Festive Season
See your income, existing obligations and your festive wants before creating a budget that will suit you. For instance, if your budget allows spending worth INR 1 lakh during the 6-8 month-long festive season, look to keep your expenses to around INR 70,000. That saving of INR 30,000 will be handy in dealing with unforeseen circumstances.
Start Saving for Festivities in Advance
Saving a couple of months before you will likely start spending will do you and your festive budget a world of good. Revisit your expenses, avoid the unnecessary ones and save to meet the festive season demand.
Track Your Spending Diligently During the Festive Season
Tracking your spending daily during festivals is a must. There’s every chance that you may go off track under the massive shopping influence the season has on us. Track your expenses, review them and make fine changes to your plan to stay financially fit during the festive season.
Say NO to Impulsive Purchases
Impulsive purchases never help! You go on to purchase things you would avoid otherwise. Credit cards, which allow you to shop for anything, invariably lead to such purchases. Guard against impulsive buying behaviour to stay on track.
Avail of Zero Interest Credit Card EMI Offers This Festive Season
Given the high expenses associated with festive celebrations, savings alone may not be sufficient to meet the same. No harm in grabbing festive season offers such as zero-interest credit card EMI. In this arrangement, you only pay the cost of the product, relieving you of the interest burden. However, do keep an eye on the product cost; it should be within your festive budget.
Convert Your Credit Card Transactions into EMIs
Under the lure of the festive season sale, banks offer discounts and cashback besides zero-interest credit card EMI options. However, some credit cards may not be eligible for these offers. People holding these cards can convert transactions into EMIs at a lower interest rate of 12-18% per annum compared to 36-40% when doing without this option.
Wrapping Up
The festive season is a matter of celebration without letting your finances go out of control. Researching, planning and spending wisely is the key to achieving a financial balance while celebrating festivals. Hope you implement these tips to enjoy festivities. For more tips on financial management and other stuff, visit zarooribaathai.in.
