5 Easy Money Management Tips To Save Money During The Festive Season

India is known as the land of festivals and for good reason. We are fortunate to be able to celebrate many seasons and regions. Each part of the country has distinct celebrations. And in our country, these occasions are never low-key. These are replete with rituals and ceremonies and not to mention- a lot of guests. Who doesn’t like the thrill of giving and receiving presents, devouring sumptuous food, and sharing laughter with our close ones? Although all these sound and feel great, these festivities do come at a price.

Celebrating a festival in India is never a small get-together. It involves many traditions and ceremonies. But after the festivities are over, we come to terms with the expenditure we incurred. During the festive season, we almost always go overboard with our spending. Extravagant gifts, lavish parties, and elaborate decorations- all take a toll on our money management. Our budget goes for a toss and we become stressed about taking care of even routine expenses. And to cover those, we might even have to borrow money or take a loan to manage our finances. That puts added pressure on our resources. But why does it happen? All these issues mainly boil down to two things- Not planning well and not saving enough money. With some smart money savings tips, you can control your festive expenditure without impacting other financial obligations.

Reasons for Overspending During the Festive Season

Understanding the reasons why people go on a spending spree during festivals is half the problem solved. Finding out the WHY of going overboard with festive spending will tell you the How to save money. It helps you in planning and managing your finances without spoiling your holiday mood.

• Impulse Buying: Did you know most shopping decisions are made when you are already in the store? There are offers, sales, and discounts everywhere - both physical and online stores. It is very easy for you to get swayed by these enticing offers if you don’t have a shopping plan.

• Lack of Budgeting: You may have a monthly budget for household expenses, bills, etc but not many people plan a budget for occasion shopping. Put your money management skills to make a well- thought out budget.

• Underestimating Expenses: People often overspend because they underestimate small expenses. It is easier to keep track of large purchases like a car or jewelry but it is the petty sundry expenses that add up to a whole lot. You may have a ballpark figure of how much to spend on gifts or home décor but things like ordering food regularly are usually not accounted for.

• Overusing Credit Cards: The easy availability of credit like credit cards where you don’t have to pay immediately might propel you to overspend. People who use credit cards for almost everything are more likely to spend more than those who use cash or ATM/ debit cards. There is a psychological reason behind it. This consumer behavior is called ‘pain of payment’ and takes place when you part with your money immediately. This usually happens with a regular credit card user.

• Lack of Discipline: As with most things, good results come with patience, practice, and discipline. If you are not disciplined about saving money, you shall struggle when a financial need arises.

• Peer Pressure and Social Media Consumerism: Are you in the habit of comparing yourself and your lifestyle with your friends and colleagues? Does looking at a social media post about your acquaintances living the good life make you sigh? Do you constantly feel the urge and pressure of upgrading yourself with new purchases? If the answer to these is yes, you might be the poster child for reckless consumerism. So much of our efforts go into catching up with the latest trends that we ignore the importance of prudent money management.

• Insufficient Savings: Having money in the bank is a great bolster, both psychologically and financially. When you haven’t saved enough money through smart decisions and choices, you are more likely to borrow money when a need arises. Taking a loan and not using your savings to spend during festivals is never a good idea and could lead to a debt trap.

5 Easy Tips to Save Money Over the Festive Season

Here are 7 smart tips that you should follow to manage your finances well this festive season and save good money.

• Make a Budget: The importance of budgeting for the festive season cannot be overstated. You should have a rough estimate of your recurring monthly expenses. And based on the money left over from your monthly expenses, prepare the festive budget for entertainment, presents, home décor, etc. If the budget goes overboard, decide where to scale back.

• Set Expectations Right: During this celebratory season, every member of the family might have certain expectations. One of the ways to save money at home is by asking them to prepare a list of things they want, in order of priority. Based on your financial condition, even if you get them just a couple of their most wanted items, they will be happy and you get to stick to the budget.

• Look for Deals, Bargains, and Discounts: Have a plan ready regarding purchases you have to and want to make. Typically, an e-commerce website would have more offers than physical stores. Shopping smartly for your favourite brands can save you a lot of money. Avoid great deals unless it’s on your list.

• Say NO to buying on Credit: No matter how lucrative credit card offers, no-cost EMIs and Buy-Now-Pay-Later Schemes might look, stay clear of them. Not having to pay immediately might seem great but once the bill arrives, it could take you off track financially. It could prove to be a debt trap that you wouldn’t want to be in.

• The Super-Saver House Party: Rather than taking out your guests to a fancy restaurant, host a party at home. One of the best ways to save money is by being at home. Not only will the guests appreciate your hospitality and the warmth of your home, it saves you a lot of money, efforts and time too!

Smart money management is the key to balancing your festive expenditure with your financial capacity. Practising a few money-saving tips can ensure you enjoy the festivals to the fullest by being stress-free financially.