The festive season is when many households spend the most in a single month, on gifts, clothes, travel, sweets and home repairs. A little planning can keep the celebrations joyful without a painful January.
A five-step plan
- Set one number. Decide the total you can spend this season without touching your emergency fund.
- Split it into buckets. For example: gifts, clothes, food and sweets, travel, home. Write each amount down.
- Pay from savings first. If a purchase needs a loan or a credit card balance you cannot clear in full, ask whether it can wait.
- Read the fine print on instalments. "No-cost EMI" can include processing fees, or a discount you lose by choosing instalments.
- Keep a buffer. Set aside a tenth of your budget for things you did not plan, such as an extra guest or a repair.
Common traps
- Buying something only because it is on sale.
- Several small instalment plans that add up to a large monthly bill.
- Using a credit card's minimum payment option, which leaves interest running on the rest.
"The best festive purchase is one you still feel good about when the bill arrives," said Priya Menon, a financial planner who runs free money workshops for families.
If you are planning a bigger purchase on a loan, read our explainer on how interest rate changes affect your EMI.
Comments
Comments