December and January are considered the merriest months of the year. We have Christmas followed by New Year and Sankranthi. These occasions marks the happiness by bringing friends and families together. Though this happiness is unparalleled, the effect of not planning your financials during this time is going to have a drastic effect on your financial plans for the year and your New Year resolutions of saving higher. (Though these occasions give us happiness, one thing that is often ignored is the cost associated with these occasions). So why do we call these two months the months of non – committed expenses:
1.Your budget goes for a toss
People generally plan for the EMI’s to be paid, monthly cost of child’s education and other household expenses. But they ignore to plan for the costs associated with non committed expenses like shopping for new clothes, travelling charges, New Year celebrations, lunches and dinners with friends and family during this period. Most people have the tendency of overspending during these months. One more added factor is they postpone their tax savings till December and January. All these expenses of shopping and other celebrations add to these existing expenses. So typically when people analyze their bank and credit card statements during January month end, they find themselves in a position where they have spent more than what they can. Extra credit card payments add up in the coming months.
2.The bee called shopping and the honey called bargain
One other factor that is predominant during these periods is the crowds at shopping places. Most of the people follow this tradition of buying a new pair of dress for Christmas, New Year or Sankranthi. Added to this, if you actually pay a close look at the sale seasons being announced by the shopping malls, one can find this pattern of announcing big sale events after the festive season. So once we are done with the shopping for the New Years Eve and Festive season, they announce a sale event during January. We find ourselves situated in a mall full of deals that we think are too good to ignore. People often just try to grab those good deals and end up with products that are not essentially required if not on sale.
3.Exchange offers and Loan offers
Exchange offers are one more predominant factor during these months. We find a lot of exchange offers luring us to get rid of our old TV Set, Washing machine, refrigerators, cookers and what not. We find these attracting offers as the one’s we can’t refuse and go ahead with these unplanned expenses being incurred due to the exchange. Even the offers on interest rates and discounts being offered on cars are also high during this season. People often fail to assess the effect of individual financial decisions on the collective personal finance front. They often make this mistake of buying products because of some deal being offered and ignore the effect of such decisions on their yearly household budget.