Festival time is the most delightful period of the year.It recharges you as a person, every individual in any corner of the world try to be with his family and spend quality time with them. It is time of having fun, shopping, socializing, Gifting and lot more....
Most of the Indian festival irrespective of religion fall in the period August to December - Whether it is Eid, Raksha Bandhan, Parsi New Year, Diwali, Muharram, Gurunanak Jayanti, Christmas or New Year etc..
But while celebrating festivals and to enjoy its charm to the fullest we miss on the budgeting part resulting in the trap of overspending. By taking some simple steps we can save ourselves from impulsive buying and mouth watering offers.
1) Contribute for Festival expenses in advance - While planning for our expenses we break our expenses evenly for the whole year, whereas there are certain months when our expenses are lesser as compared to other months. Just make a list of such months and park surplus of this month in a liquid fund of MF or make an FD for equivalent period. We can also start an SIP in a liquid fund or open an Recurring deposit with Bank whose maturities matches with festival period.
2) Budget your Expenses - Budgeting can help you in avoiding impulsive buying. Hence prepare a list of all the shopping you wish to make during festivals. Also list out separately how much you would be spending in eating out, on Gifting, movies and shopping.
3) Delay Bigger Purchases - I remember during last diwali there was a combo offer available for purchase of Juice maker and Coffee maker at an attractive price. My wife couldn't resist and she bought it. I remember we hardly used it for a week.
Festival is the time for big discounts, freebies and offers. Delay your purchase by 3-4 days before making any bigger purchase which is not planned and suddenly you find it available at very good bargain. It will help you to come out of frame of mind of offers and discounts and give you time to think logically that really you need it/what is the necessity of buying right now or don't need it immediately.
4) Avoid Credit Cards - Try to make payments in cash, as at the end of the day you know how much you spent. The more you spend you have lesser surplus available. Credit card is a very comfortable and safer way of making payments while shopping, but it never allow you to feel the pain of overspending. Actually pain comes when the payment is due. Have you ever realised that we always spend more while purchasing with credit card as compared to cash payment.
5) Say NO to personal Loans - Personal loans are the most expensive loans avoid it.
6) Realise nothing is Free - Realise and accept that in this world nothing comes for free.
7) Plan your investments - Always plan and link your investments to goals, which will help you in reminding during impulsive buying that you will be compromising on your child's education or her marriage or your retirement.
Just follow above simple steps and have a great Festival time.
The author of this article is Raj Talati a CERTIFIED FINANCIAL PLANNERCM at ABM Investment.