Hello Readers! 

We have now entered the festive season, Dussehra is almost over, and now Diwali and Christmas are around the corner. If we call this season a shopping season, then there is nothing wrong with this. Festivals across the globe have always been about gifting and spending quality time with family.

However, last, some months were proved as the bad days for our finances, whose condition was almost deteriorated due to the pandemic. In this situation, the only question that triggers one's mind is, can they still afford to spend like before they used to in this festive season?

Well, this year has not been so good our finances, thus in this situation, it is only advisable, to be very conserved with your expenses. This requires following a process before making any purchase this season:

Prepare A Shopping List

When we visit physical stores or browse online, we don’t stop until we find the required product, in the whole process we often end up buying things that we were not looking for, and ultimately add up on our bill. In the same vein, shopping-at-the-last-minute results in overspending.

So, to stop yourself from overspending, prepare the list of necessary items to be bought, also be tight with your list so that you don’t end up buying unnecessary things in the name of the festival.

Check Your Budget

It is always ideal to fix a budget that you are going to spend on the coming festive season. Preparing the budget before helps you allocate a separate fund for this months before the festival arrives. This saves you from the last-minute crash on your income for festive spending.

Suppose you are going to spend around Rs 50,000 this festive season, then if you would have allocated a separate fund of Rs 4200 per month for the last one year, then you might have reached the amount you have fixed to spend this festive season.

If you haven’t done it, then you need to find out the amount from your annual budget, which when taken out for the festive season, doesn’t affect your normal lifestyle. Revisit the shopping list and cut the excesses until it fits this budget.

Avoid Debt

Car, fridge, air-conditioner, and other appliances are all available on credit, while you buy, make sure that you don’t opt for a loan. Sometimes, manufacturers resort to zero-interest loans for selling gadgets or electronic items that could be repaid in 8-12 installments through your credit card. Ensure you don’t financially stretch yourself in the process.

While using your credit card for shopping always maintain the debt-to-income ratio which is calculated by dividing all monthly debt payments (home loan, auto loans, student loans, etc.) by monthly income.  

Remember a high debt-to-income ratio, can deteriorate your finances and affect your lifestyle.

Bonus Should Be Used Wisely

Diwali is around the corner, and you might get the Diwali bonus, and you have to make sure that you use your Diwali bonus in the right manner. Ensure you divert it towards important financial goals like that of retirement or children’s higher education.

You can also use your bonus to repay a good amount of your home loan, or you can use it to boost up your emergency fund.

This festive season, you need to be a little prudent with your finances. Shopping as per the budget will help you stay away from borrowing or adding any other kind of debt to you.

For any kind of query, you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.

Happy Investing!

(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee of future returns).