Authored by Gaurav Jalan
It’s easy to overspend during the festive season. While staying within budget is ideal, it is easier said than done. Fortunately, if you have overspent on holiday gifts or festive expenses, there are still opportunities for damage control.
Every festive season, we make the mistake of not planning our finances and going overboard once the festive spirit takes hold. The best way to avoid making the same mistake every year is to reflect on the situation. This involves acknowledgment, assessment and finding practical solutions.
One of the best ways to cut one’s losses is by curbing unnecessary expenses. It will free up some funds to ensure a faster recovery. The idea is to eliminate frivolous spending – no fast food or fine dining, avoiding superfluous purchases like home décor items, clothes, etc.
Once you realize the benefits of cutting discretionary spending, there will be more savings. Freeing up money will enable you to pay off debts faster and/or replenish any savings eroded during the festivities.
For instance, consider paying off debts with the highest interest rates first. If that seems too daunting, you should try paring down the debt with the smallest balance first. In this way, you will see some progress in eliminating the debts right away. Let’s not forget that ‘Every drop in the ocean counts.’
If you are seeking to extricate yourself from the financial hole you have fallen into, the first thing you’ll need to do is put together a budget that outlines your monthly expenses. This will help in not only managing funds better but assist in pinpointing how much of your debt you can afford to repay each month.
It is essential to review the budget regularly. By doing this you can make adjustments for any rise in expenses, new credit card debts or fresh loans.
A simple way to generate some extra cash is by getting rid of extra or unwanted items. Simply list these surplus or redundant items on websites such as OLX or Cashify. A few thousand rupees recouped via this route can help in partially clearing off your festive debt. Remember the adage about ‘every drop counting’?
If your current salary falls short of covering the contingencies, consider some freelance assignments or a part-time job to help minimize the festive debt.
Having reflected and analysed festive spending, you can plan better for the next holiday season. With Christmas and New Year around the corner, this makes sense. With finances, it is always prudent to plan in advance.
So start inculcating healthy financial habits from today. This will ensure that you do not face the same crisis during next year’s festivities.
Finally, you should consider your investments and savings goals for the upcoming year. As the saying goes, ‘A stitch in time saves nine.’
Gaurav Jalan is CEO and Founder at mPokket. Views are personal
First Published: IST