The festive season is filled with fun, feasts, friends and family. For many people, the story is the same after Diwali: weight and sugar levels are up, and the bank balance is down. To prevent a financial hangover after the party, it is important to plan your expenses. One way to do this is by setting up a festival fund. This fund allows you to put away a small amount every month, which you can then use to spend freely during the festive season. By doing so, you can avoid borrowing or dipping into your savings for other critical goals.
When setting up a festival fund, you can choose an appropriate instrument depending on your risk appetite. If you are conservative, a recurring deposit or a short-term debt fund may be suitable choices. On the other hand, if you can tolerate some risk, starting an SIP in a conservative hybrid fund can be a good option.
To save a specific amount in 12 months, you can refer to a table that shows how much you need to put away every month at different rates of return and levels of risk. While equity funds may require the lowest amount, they may not be appropriate if you plan to withdraw the money for next year’s festive spending.
Another way to make the most of your finances during the festive season is by shopping for bargains. While there are many deals and discounts available during this time, some of the best offers can be found in the off-season. This is especially true for clothing and gadgets. E-commerce players also offer great bargains from time to time, so it’s important to keep your eyes peeled for such discounts and grab them whenever you spot a good deal. By doing so, you can relieve the pressure when shopping for gifts during the next festive season.
It’s also important to avoid loans and dipping into your savings during the festive season. Setting up a festival fund can help you avoid costly loans and prevent disruptions to your financial plan. Personal debt can have negative consequences, including tarnishing your credit score.
With effective planning and getting the basic things right, it is possible to make the most of the joyous times without causing a massive dent in your finances. Festivals are about love, laughter, and cherished bonding with friends and family, and you should not miss out on these experiences due to financial constraints.
Disclaimer: The opinions expressed in this column are those of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.
