Every year September to December is considered to be the much awaited festive season. Starting with Gandhi Jayanthi as a holiday to Dasera, leading to Bakri Id, Diwali & Christmas. Every industry gears up for the festive season with their best products and offers to take advantage of the festive fervor. It can be new models of mobile phones to cars or offers that would be unheard of for the rest of the year.
We share a few Personal Finance tips that need to be kept in mind before splurging hard earned money this festive season:
Plan a Festival Budget
It would help immensely to have a budget for the festive season. It is common fact that when we prepare a budget, chances are that we become conscious while spending. This helps us to stay within our means. Care should be taken to ensure that while preparing the festival budget, the emergency fund should not be disturbed for shopping during festive season. Emergency fund is typically 3-6 months of monthly expenses that we maintain for a rainy day.
Buy only what is Needed & is Affordable:
It is important to identify a list of things that we need to buy in the busy season. Having a well thought-through list of things we need to buy ensures that we don’t get into a shopping binge due to impulsive shopping. If we identify things that we need to buy, it helps us to remain within our budget when we actually shop. For example, if we plan to buy 2 pairs of jeans and there is an offer which says “buy 4 u jeans get 2 jeans free”, we should restrict ourselves to buying 2 pairs of jeans only. The decision to take on the offer would mean that we would be over-shooting our set festival budget.
It is important to identify what we can afford and what we cannot. Simply because there is a good offer, we should not aim to buy things which are beyond our budget and are not affordable. For example, if we are planning to buy a hatchback car in the rage of 7-8 lakhs, we should not be tempted to go for a sedan car priced around 9-10 lakhs simply because they are giving an offer of Rs. 75,000 cash discount. We should evaluate the impact this decision would have on our entire personal finance as the higher EMI of a sedan car would negatively impact our ability to invest for other financial goals.
Compare before Commit:
Thanks to the consumer driven market, today we have a wide range of choices in everything we plan to buy. It is always a prudent thing to compare similar commodities available in the market before committing ourselves to buy it. It would also help to research customer feedback on the products before the decision to buy is taken.
Check Online offers:
With eTailers making a beeline to India, we have a host of online companies that sell things that we plan to buy online. They offer both convenience as well as a wide variety of choices. Many of them even offer a Cash On Delivery option. Although from a consumer perspective, the feel good factor of venturing out to a shop or a mall would be missed in online-shopping, it does give us many advantages. However, care should be taken to verify authenticity of the eTailer before making a payment online.
Festive season brings with it a lot of happiness and joy to all of us. It would be in our best interest to be prudent and not allow the festive season to disturb our personal finance.