The Dusshera-Diwali season has ended. This is the season where we indulge ourselves, give expression to our aspirations, and create happy memories. We don’t hold back when it comes to buying the things we’ve always wanted for ourselves or our loved ones. Be it a new gadget or clothes, or even a new set of wheels, this is the time we loosen our purse strings – sometimes, without caution. Once the season is over, we realise our expenditure may have spiralled out of control. Unchecked credit card spending leads to a big card statement at the end of the season, just like having too many sweets leaves us with a bigger waistline.
The festival period is to celebrate and rejoice, and not to regret having spent too much. So after the season, it is time to go on a financial diet and deal with festive debt on priority. Here’s what you need to do, pronto.
Clear up your credit card debt
Your first order of business is to make sure you are clearing your credit card bill at the earliest. You can always pay the minimum amount due on your credit card monthly and take your time to settle your debts. However, by doing so, you are increasing the outstanding amount along with added interest, and this way your festive costs are continuing to balloon. It is advised to always pay your bills in full on time. This is also important from the point of view of your credit score, which will take a hit if you have heavy credit card debt.
Replenish your savings
If you do not have a credit card, you may have made your festive season spends out of your savings. Now if your savings are exhausted, focus on rebuilding them. Use a recurring deposit or fixed deposit provided by your bank. Set aside a sum at the start of every month to contribute to your savings fund.
This is a no-brainer. You’ve gone overboard with your festive spends, so now you need to cut back in order to return to financial stability. There are many ways to cut costs, but the simplest way to do it is by targetting your biggest spends. For example, if taking cab rides to work forms a big chunk of your expenses, consider taking the bus on some days. If you eat out multiple times a week, carry home-cooked meals on some days. However, don’t stop your essential payments towards insurance and investments. Those are extremely important.
Increase your pool of income
More money equals more savings. If you have had an expensive festive season and need to become financially stable soon, start looking for ways to monetise your skills and earn a side income. Connect with your peers, find out what the market wants, and create those opportunities to earn an extra buck. The money you receive from any kind of freelance work will give you a big boost in replenishing your savings.
Use your festive bonus smartly
If your employer offers you a festival or Diwali bonus, use it wisely. A Diwali bonus is not a large sum of money. How much ever it is, you need to use it wisely, especially now that you have a post-festive cash crunch. Part of the bonus can be allocated towards your festive spends. But you must put it to diverse uses – like topping up your investments, buying essential insurance coverage, or settling debts. The same rules apply to other windfalls like income tax refunds or even financial gifts.
Next time, plan your spends
Having learnt your financial lessons this year, you should plan your festive spends for next year. Diwali and Dusshera come every year and this year’s expenditure can be a learning curve. Using this year’s spends as a base, you can plan for the next year. For example, let’s say you have spent Rs 50,000 on festivities. Next year, you can start saving a few months ahead and you will have the same amount or more for Diwali. You can always invest in a short-term fixed deposit or a one-time SIP until next year and the whole amount can be used during the festival.
To conclude, overspending during festivals is common. However, you can always plan for the coming years so the post-festival period brings contentment instead of regret.
Adhil Shetty is CEO at
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