How to manage your finances this festive season
The holiday season isn't simply about the joy and hope that it offers. During the holidays, we often take stock of our lives, the year just passed, and our carbon footprint. It's time to live sustainably and help others. Having said that, the holiday season will inevitably result in additional costs, regardless of how we choose to celebrate. As we struggle to balance managing our finances with the costs of gifts, travel, and shopping, there is tension and frustration in between these moments of delight and excitement.
This is due to the fact that we overspend before even making a budget for the holiday season, which causes us to go bankrupt by the end of the season or occasionally even before. However, with some preparation and planning, you don't have to spend all of your money or run up your credit card limit to celebrate.
To avoid getting sucked into holiday shopping and to guarantee that you stick to your budget for the coming year, use these useful recommendations.
1. Establish holiday spending caps
By restricting your purchases to those that can be made without risking your bank account, you may give both your credit card and your mind a vacation. Take advantage of this chance to develop or revamp your budget and utilize it to determine how much you can comfortably spend.
The money that isn't going to bills is the amount you can afford to spend on gifts. However, this doesn't have to be the cash you have left over at the end of the month if you'd like to have a little more to spend.
2. Don't overuse your credit card
You'll be tempted to spend throughout the holiday season even if it isn't in your budget. Using your credit card to make purchases will probably result in unproductive debt and encourage overspending. "Avoid using your credit card when you know you may have financial difficulties after festivals. Keep track of your credit card spending to prevent overspending. Use collected reward or loyalty points from your credit card to lower your expenses, suggests Bhosale. However, if you find a good price, take advantage of it. "For some purchases, you can switch to online deals, and you can check prices across various websites. However, don't let deals blind you.
3. Benefit from deals and discounts
Businesses frequently create a variety of deals for their clients throughout the holiday season. These could take the form of steep discounts, cash-back deals, no-interest EMIs, free home delivery, offers to trade in unwanted products, and so on.
Even if you might use some of these, keep in mind that they have two sides and should never be used to buy stuff you don't need, regardless of how alluring the offer might be.
If you do the aforementioned, the holiday season will be more enjoyable and you won't have to worry as much about money.
4. Monitor the budget
We all become preoccupied with shopping and visiting family and friends during the holiday season, forgetting about our finances and spending plans. So, in order to keep track of how much has been spent and how much we might spend in the future, we need to periodically check our budget. This will prevent us from using the money we have set aside for emergency and daily expenses.
Key note: One can manage their funds and avoid going bankrupt before or during the holiday season by implementing the above-discussed measures. Let us know in the comments what methods you use to manage your finances over the holiday season. Enjoy your holiday season until then, but remember to manage your money while having a good time. As always, Happy Investing!