The most vibrant time of the year is here again. Festivals and holidays are around the corner. The markets have already been decorated beautifully with a variety of products that you can hardly resist buying.
Amidst all the excitement and shopping to groom our homes, we forget to consider the most important thing- Our pockets! It is so hard to let go of the sweets and gifts, but they may cost exceedingly, and upset you with a long list of bills at the end.
Budgeting can help you strike a financial balance and prevent a hole in your pocket. Here is how you can curtail your expenses-
Determine your savings
The first step is simple. It only requires you to access your existing savings. Don't forget to include your partner's income if they are employed. Also, ensure that you consider side incomes if any.
Set budget limits
Budgeting is essential for managing expenses properly during the holiday season or in general. It is a crucial stage if you are investing somewhere or even for your monthly costs. You can manage your money and expenses by setting budget limits. It will prevent you from overspending on impulsive shopping.
Track your expenditure
Tracking your costs is the third most important step you should take during the festival. Your budget is useless if you do not track your expenses effectively. Try creating a separate reserve for the festival. This method makes it easy to separate festival costs from the regular daily expenditure.
Prioritize needs over wants
Don’t get carried away because of the eye-catchy bumper discounts. Many retailers give heavy discounts and festive deals during this season as a strategy to hike their sales. It will only lead you to spend money mindlessly without even realizing it. Prioritize what you need. Be smart and spend money on products with high utility.
Take advantage of the digital mode of payment
Digital payments are a great way to earn cash back and rewards. They are indeed a stress-free, convenient mode of purchasing. You won’t have to worry about pickpockets or losing your wallet at any random shop.
Set financial goals for your future
Once you know, how much you’ll be spending for a short-term goal (for occasions like a festival), the next stage is to manage personal finances for the long term. Start by pointing your future expenses that will require large sums of money. For example, school/college fees, planning for a new home, overseas vacation, etc.
- Invest money- If you keep on collecting money without investing, it may not yield good results. Choose investments diligently to gain quality returns. Please note: Do not invest without consulting a professional if you have minimum or partial knowledge. Beware of frauds.
- Use a tool for recording expenses- To organize budgeting effectively, use a spreadsheet or any budgeting software to jot down everything in a single place. A sample entry may look like- Estimated college expenses: Child 1 (Present age 14) - 10 lacs (Save two lacs per year x 5 years)
- Shop off-season
- Try DIY ideas and recycling
- Celebrate at home instead of visiting expensive restaurants
Your spending will be more than usual during certain times of the year. The whole point is to plan your finances wisely. By implementing these well-thought strategies, you will be able to save a lot of money. As a result, you will avoid exaggerating your festive/holiday costs. On top of that, holidays are to relish quality time with your loved ones, as long as you are there; it will be a pleasant and enjoyable celebration!