Do you want to make the most of the festive occasion without it causing a serious dent in your pocket? We offer expert advice on handling finances with festive budgeting by Kanchana TK, Executive Director, Vantage Insurance Brokers and Risk Advisors
With festivals around the corner, most people are busy planning their shopping lists for festive items including apparel, food items, jewellery and loads of other ‘necessary’ things. It is a known fact that most women will always make provisions for a rainy day. However, in today’s time and date where discounts are commonplace, it is crucial that one resists the urge of going overboard while spending money. Women ideally handle their finances differently from men mainly because of the differences in the earning patterns and priorities. Since women shop more for the ‘family’ than just for themselves, they need to prioritise the essential items that need to be purchased especially during festivals and holidays. During the festive season, it is best if one sets certain spending limits for oneself so that one does not end up broke.
Start with a budget and stick to at least 90 per cent of it: It is best believed that budgets are not made to constrain you, but simply to keep you in line in terms of overspending in particular categories, especially during special occasions. Before you step out to make purchases, it is crucial to make a list of the essential items that need to be bought. Once the purchase is made, start ticking each item off the list to avoid deviating from it and, at the same time, maintain budget control. Some financial experts recommend dividing gross annual income into different categories like taxes, basic expenses such as food, housing, health care, and transportation. The rest will go to fun expenses such as festive occasion expenses (which should not exceed 15 per cent) and around 15-20 per cent for future expenses – such as an emergency fund, a retirement account and dream wishes like a first house.
Understand and prioritise between wants and needs: It is easy to succumb to buying luxury items, especially when shopping for oneself or for the family. But it is important to remember and understand that you can do without an ‘extra’ dress, shoes, etc. in order to stay within your planned budgets. As the accountant for your family, it is crucial to ensure that your family members also clearly understand the ‘essential’ priorities over the frivolous ones.

Maintain a major expenses record: It is extremely essential for any woman to get into the habit of maintaining records of her expenses to keep a check on her spending/income limits. This will in turn help monitor the expenses and restrict money being spent on non-essential ‘feel good’ items. Keeping a tab on expenses and being able to estimate some fixed expenses like rent, bills, insurance payment, etc. prior hand, will help you keep aside enough funds for other expenses such as clothing, gifts, and entertainment which are more difficult to estimate over the long term.
Follow an auto saving plan: The festive season does not only mean shopping sprees, it could also mean taking a good vacation with the family. If you are planning to go on a vacation during the festive season, it is good to start saving beforehand for such short-term goals. Additionally, you must also ensure that you keep a set amount aside for your future. One can always move into an auto-saving mode by choosing options such as a recurring deposit account to ensure that at least 10 per cent of your income to automatically gets accumulated for use in the future.
Focus on credit control: In today’s times, shoppers look for ease and comfort in spending and a steady cash flow. Most people don’t think twice before whipping out their credit cards to purchase items despite having a corpus in their savings accounts. If you thought that credit cards come free of cost, think twice! It is necessary to understand the charges associated with these credit cards such as late payment fees, the interest rates for using the card, etc. Focus your efforts on reducing the balances on the ones with the highest rates. Once you have finally paid the card off, keep it aside for emergencies and switch to a debit card if necessary.

Live life debt free: Once you are able to control the urge of overspending especially during festive times, it’s time to focus on clearing your existing debts. While one can make provisions for large expenses such as home or car loan, it is best that any additional income such as a bonus or a chunk of an incentive be used for pre-payment of such heavy loans. Plan in advance using estimates to understand how you can end your debts faster. Likewise, during the festive season, one should ensure that one does not end up broke simply by paying off one’s debts. As a woman, it is essential that you keep a tab on all the expenses, at all times and ensure that the family doesn’t cross the spending and credit limit at any point of time. In fact, get into the habit of using discount vouchers/value points and redeem them regularly to ensure additional savings.
Get prepared for emergencies: Festivities are a time for happiness and fun. However, a smart individual will also prepare a contingency plan as a backup option. What better way to handle emergencies than being prepared for one! Assuming that emergencies won’t touch you is a myth. It is always better to save up some money for a rainy day than to be caught in the middle of it without a shelter to protect you. Ensure you save at least some amount of money, preferably a six-month expense for a cloudy day so that you don’t end up drenched in the rain!
Party smart & small: In our culture, it is normal to have big parties during festive times where family and friends can gather and partake in the festivities. While it feels great playing the role of a hostess and entertaining your guests, you should keep in mind that throwing lavish parties only ends up draining your pocket and resources. Instead, plan for smart parties for your family and friends. The web today has sites that offer various ideas of throwing great parties within a stipulated budget. In this way, you will be able to have a great time without overshooting your expense limits!
Manage your expenses skilfully: Take a pledge today to think practically and use your money wisely. Once you keep in mind the steps that need to be followed and the importance of keeping up with these financial resolutions, you will be able to manage your expenses cleverly. Women are always seen as great home managers and it’s time we apply the same skill sets to festive financial planning too. With this, you will have a great festive season!