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How to Plan Your Finances this Festive Season?

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The festive season – a magical time when families come together to celebrate, exchange gifts, and enjoy delicious feasts. Winter starts to get a foot in and all the light decorations and festivities create an enchanting atmosphere. Wherever you go, wherever you look, you’ll find stores flashing fancy and tempting sale signs that even the most budget-conscious people find irresistible. Partaking in the festivities is undoubtedly enjoyable but the eye-catching deals, gift buying, and celebrations are not so easy on the pocket. So it’s also a time when expenses tend to skyrocket, and without proper planning, it can lead to a lot of stress and debt.

Yet, with some thoughtful Financial Planning, you can savour the festivities without dreading the post-celebration financial aftermath. Here are some things you can do to relish the festivities without fearing the financial consequences that follow.

Assess Your Current Financial Situation

First, you need to set the foundation for your festive season financial planning. Before you dive head first into the frenzy of festive shopping and spending, it’s important to have a clear understanding of your current financial situation. Take a moment to assess your income, savings, and any outstanding debts.

Create a list of all your current financial assets, such as savings accounts, fixed deposits, and any other investments you might have. Then, list all your liabilities, which could be outstanding loans or credit card balances. Having a full picture of your financial standing will allow you to plan your expenses more realistically.

Create a Festive Season Budget

Now that you have a comprehensive view of your current financial situation, you are ready to create a detailed budget. This is one of the most important steps in preparing for the festive season as it will help you allocate your money efficiently and ensure that you don’t overspend.

Start by making a list of all the expenses you anticipate during the festive season. This should include all the gifts you plan to buy, house decorations, new clothes, travel expenses, any parties you have planned etc. Now set spending limits by assigning a specific budget for each category.

Be realistic and remember that your budget should not jeopardise your long-term financial goals. Then, prioritise the most important expenses, such as gifts for close family members, and allocate more of your budget to these items. And finally comes the hardest part, sticking to it. It’s especially hard to do this during the festive season as there are so many enticing deals around. Resist the urge to overspend and stay on track.

Also Read: What is Budgeting and How to Manage It in Financial Planning?

Saving Strategies for Festive Expenses

It’s time to look at some strategies to save some money during the festive season.

  1. Plan ahead and start saving for the festive season well in advance. You may not be able to do so for this particular season, but you can always prepare for the next one. Setting up a savings account dedicated to this especially can help you accumulate funds over time.
  2. Shop smart and look for sales, discounts, and offers. You’ll be hard pressed to find stores without a Diwali sale sign so take advantage of these opportunities to save money on your purchases. Plenty of big e-commerce platforms also have mega sales during this period.
  3. Before you buy anything, compare prices on different websites and stores. It’s possible you will find the same item at a lower price elsewhere.
  4. You can also use credit cards that offer cashback or rewards for your festive shopping
  5. Try making your own gifts or decorations. Handmade items not only have a personal touch but can also be cost-effective.

Also Read: Savings vs Investment: Which is a Better Road to Take?

Debt Management and Avoiding Overspending

Let’s be honest, it’s easy to get carried away with spending during the festive season. If not planned well, this overspending can lead to accumulating debt. Here are some tips for managing debt and avoiding overspending:

  • Avoid impulse buying. It’s easier said than done, especially with the abundance of offers and discounts that are undeniably eye-catching. Dipping into your savings or emergency fund, or going into debt can be damaging later. Stick to your budget and buy within your means. If you come across some item you didn’t plan to buy before, take a moment and consider if you really need to buy it.
  • Whenever possible, pay with the money you have and avoid credit cards. It’s often easier to overspend when using credit cards so one needs to be careful. Of course, if there are decent rewards for using cards, you should use them but even then be on the lookout for hidden fees.
  • If you have to use credit cards, keep a close eye on your balances. Make sure you don’t go overboard and can pay off the full balance when it’s due, otherwise you’ll be hit with high-interest charges.
  • If you already have multiple debts, prioritise paying off the ones with the highest interest first. In the long run, this will save you money. Managing debt can be hard alone but you can always consider consulting a financial advisor who can provide guidance on debt management and repayment strategies.

Investments and Tax Planning

The festive season can be a bit hectic, and when you’re managing your immediate expenses, you might lose sight of your long-term financial goals. It’s very important to keep your overall financial plans in mind and how the festive season spending impacts them.

Investments Planning and Tax Planning are key during this period. Traditionally many Indians buy gold as it is considered auspicious. It’s never a bad time to add some of this precious metal to your portfolio. There are many ways to invest in gold, especially with the growing popularity of digital gold. Make sure your portfolio doesn’t have any more gold than recommended and diversify by investing in mutual funds, stocks, or fixed deposits.

If you receive any festive bonuses or gifts of money, consider investing a portion of it in any of these avenues. You might want to think about giving your loved ones an investment gift, which not only secures their future but can also help in lowering their tax liabilities. Also, it’s a great opportunity to reassess your own tax responsibilities since certain gifts may have tax implications.

Review and Adjust Your Financial Plan

The spending you do during the festive season will have an impact on your long-term financial plan too. After all the festivities have ended, it’s crucial to review your financial plan.

First, assess the impact of your spending. How did your overall financial condition change? Did you accumulate any debt? Were you successful in sticking to your budget? These are some important questions to ask. Then, if you’ve strayed from your financial goals, it’s time to make adjustments.

Create a plan to get back on track with your savings and investments as soon as possible. Use the lessons from the past festive season to set new financial goals and create a better plan for the next year. You can open a dedicated festive season savings account to ensure you are well-prepared in advance.

Also Read: Exploring Investment Opportunities For Diwali Gifts


The festive season is a time of joy, but stress from planning your finances during this time can take some of that joy out. If you plan for it in advance, however, you can enjoy the celebrations without straining your finances. By using the tips we’ve talked about, you can keep your finances in check and won’t find yourself strapped for cash before or after the festive season.

Planning for festivities is not just a small part of your overall financial well-being. If you find it hard to organize your finances, consider seeking advice from a certified financial advisor who can help you ensure a delightful festive season and a secure and prosperous future.