5 Tips to Financially Prepare Yourself for the Upcoming Festive Season

Since buying something new at the festivals is considered auspicious, the demand for goods and services splurges in this period and is at its peak during Diwali. Earlier, people used to buy something useful yet affordable, such as utensils, clothes, and at most gold as an investment. However, things have changed and in the last couple of decades, it has become a norm to buy luxurious items like smartphones, home appliances, branded clothes, take expensive vacations, throw lavish parties, and whatnot! This is mainly because the consumers' purchasing power has increased and the markets get flooded with discounts and offers during the season. However, many individuals end up getting stressed, financially drained, or even find themselves in a situation of a debt overhang by the end of the festive season.

To make sure you enjoy the upcoming festive season to the fullest, without starting your new year worrying about festive loan repayments, it is crucial to plan your festive finances from now itself. To help you achieve it, here are five tips to financially prepare yourself for the upcoming festive season:

1. Make a list of necessary items:

Most people do not think it is necessary to make a list of items they need to buy throughout the festive season. However, in order to be financially prepared for the season, it is crucial to make a list of items to be purchased. Some items cannot be eliminated or postponed from this list, such as grocery items to make special dishes, sweets, desserts, etc., new clothes, gifts to family members and friends and so on. Make sure you make a detailed list. For example, when listing down gifts, be specific and write the names of the persons you want to buy gifts for. You should also list the big items that you are considering buying during festival sales, such as a piece of jewellery, air fryer, washing machine, car, etc. It would help if you make a separate list for the items you might consider buying if you get a good offer or would like to window shop for.

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2. Set up a festive budget:

Making a list will give you an idea of your potential expenses. Now, the next step is to check your bank account and set up a budget. Decide how much total amount you are willing to spend on the upcoming festivals. Once you know how much money you need, you can further break the budget into different categories. It is necessary to set a budget for every small thing. For example, how much you want to spend on Diwali gifts (price limit for each gift), grocery budget for each festival depending upon your menus and number of guests you will be inviting, clothing budget, budget for an electronic item you might want to buy, etc.

3. Set up a separate bank account:

While the festive season is around the corner, you still have sufficient time to plan your finances for the big expenses. It is a good idea to open a Savings Account dedicated to the festive season. You can start saving money in this account for your festival expenses or to make big purchases, which would otherwise be unaffordable. Taking some funds aside every month will help you enjoy the festivals without any financial stress. Furthermore, as you will spend on your festival expenses from this account, you will be able to track your expenses better, which will help you stick to your budget and avoid splurging.

4. Take advantage of the offers and discounts:

Most online and brick-and-mortar stores come up with attractive offers every festive season. To lure the consumers they aggressively promote the offers, such as big discounts, cash-backs, flash sales, free home deliveries, exchange offers, etc. Apart from this, banks and other financial institutions also entice consumers with offers like no-cost EMIs, zero processing fees on consumer durable loans, etc. Therefore, the festive season makes a good time to make big purchases. However, before making the purchases to save some money, it is essential to analyse your needs and buy the item if you really need it. It is also advisable to take advantage of the online platform and compare different merchants to make sure you get the quality product at a reasonable price.

5. Say "NO" to personal loans:

As discussed earlier, various financial institutions offer consumer durable loans, personal loans, instant loans, payday loans, etc. at zero or discounted processing fees and/or no-cost EMIs (zero-interest loans). These loans make the unaffordable items look affordable with monthly EMIs, and honestly, it is quite tempting to avail of these loans when you are eyeing something that is already at its best price. If it is something that you absolutely need, then you might want to consider opting for a loan. However, it is not recommended to do your festive shopping with the help of a loan. You should buy luxurious items only after regularly saving money for them. But availing of loans for the items that are not quite necessary can put you in a debt overhang.

To conclude...

Festivals are supposed to bring joy and not a financial burden. Financially literate and disciplined individuals know when to spend and how much to spend. If you do not want to spend your next year worrying about insufficient savings and loan repayments, make your festive budget today and spend wisely during the season. Do not panic if you go a little out of budget during a festival due to unexpected expenses or emergencies as you can balance it out in the next festival. But do not get tempted to get a loan to splurge during festivals as it can affect your finances and make you fall into a debt trap that becomes difficult to come out of.

Warm Regards,
Ketki Jadhav
Content Writer