The festive season is here, and we could not be more excited. The pandemic has forced people to stay indoors for way too long, and people do not want to miss this opportunity to enjoy their hearts out.
Festival season, however, comes with its own set of expenses. The rituals, the parties, and the outings can easily disturb your months old budget in just a few weeks. It is essential to understand one's needs and spending habits and find a balance between the two. It is possible to save money while spending on all our wants only if we do some essential pre-planning.
Most companies manage to pay their employees some Diwali bonus each year. This money should not be treated any differently from how you treat your salary. You must divide it into categories and spend it wisely. While the way you divide your expenses is your discretion, you could follow this simple rule:
You could allocate 20% of the amount to Diwali spendings such as home decor, sweets, outings, etc. 30% of it should go towards paying off part of an outstanding loan if you have any. The next 30% should be saved in your financial freedom fund, that is, your retirement fund. The remaining 20% could be used for or saved for a big-ticket purchase like a home furnishing item or electric gadget.
If you divide your money into different spending categories, only then will you be able to strike the perfect balance between spending and saving this Diwali.
Another thing to keep in mind is to figure out the best way to spend the amount of money you have allocated to spend. If you plan to spend 20,000 bucks on a sofa, you must put in some effort to find the best deal on a couch in that budget. If you find a sofa that meets all your requirements for 15000 bucks, you must go with that deal. Remember, the age-old concept of a penny saved is a penny earned always.
Tracking your expenses is a powerful habit. You cannot manage what you cannot measure. Make it a point to develop this habit as soon as you can, and you will see its positive impacts on your financial health. Once you start keeping track, you will realize the portions you are overspending and save more. It will give you a clear picture of what percentage of your income you are saving and what rate you are spending. This Diwali, keep track of all your festival expenses separately, and you will be able to make wiser decisions.
Striking a balance between spending and saving is all about emotional discipline. It is okay to give in to your temptations sometimes, especially during a festival like Diwali. But it is also important to practice self-control and work towards a balanced and better tomorrow.
Happy Festivities, folks!