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Unwrapping Financial Success: Christmas Guide to Year-End Money Management

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Merry Christmas, everyone! As the spirit of Christmas fills the air, it’s the perfect time to reflect on the year gone by and prepare for the new year ahead. As you get started on your gift shopping, remember to check your current financial health. This period can be stressful sometimes as it can weigh heavy on the wallet, and you might even be recovering from the hangover thanks to Diwali, Dussehra, and Dhanteras just a month ago, but this should be a time of joy and togetherness, not being stressed. Being prepared is the key to avoiding this stress, and you can stay prepared through financial planning. This is the perfect time to review and update your financial plan because you get the opportunity to leave all the negativity behind and start fresh with a positive outlook. Let’s take a look at how you can unwrap the secrets to a financially successful holiday season.

The Gift of Budgeting

Reviewing and updating your budget is important and if you don’t have a proper budget in place, the holiday season is a great time to get started. Granted, it seems boring especially right in the middle of gift shopping and party planning, but it’s important because of the stability it brings. Analyse all your income and expenses, and classify your expenditure into essential, non-essential, and savings categories. Budget for gifts, decorations, and festivities this month, and be realistic. You can take on Do It Yourself projects for some extra savings. Since it’s the festive season, you will inevitably splurge, but avoid impulsive spending, and resist the urge to overspend. When you’re gift shopping remember that it’s the thought that counts and not the price tag.

Investing in a Brighter Future

Stay on top of your investment planning in the new year. Look at your goals, and make sure you’re on track to achieve them. Ask yourself some questions – How much have my goals changed? Are my investments still aligned with my goals and risk tolerance? Are there any new goals that I want to achieve? Any new investment opportunities that I am keen on? When you answer those questions, make adjustments to your overall investment plan accordingly. Review your portfolio and figure out if it needs rebalancing. Diversify your investments and look for other opportunities such as mutual funds or fixed deposits.

If you invest in stocks, know that during this time of the year, the stock market goes through a phenomenon called the ‘Santa Claus rally.’ This effect is dominant in the Western world, but India has witnessed it in recent years to some extent. The Santa Claus rally is when the stock market sees a big spike in value in the last few days of December and the first few days of January. You can do your research and invest in stocks that rise during this time of year.

Unwrapping Tax-Saving Strategies

It’s a good time to analyse your tax strategy and work on ways to optimise it further. You can look at various investment opportunities that can help minimise your tax liability. If your goal is to invest for retirement, look to invest in retirement accounts such as the Public Provident Fund and the National Pension System. These accounts have tax benefits listed in Section 80C of the Income Tax Act. 

If you aim to generate higher returns while saving tax, then you can look into mutual funds such as Equity-Linked Saving Schemes. Tax-saving fixed deposits can be considered if you want a safe savings option. The premiums you pay on life and health insurance can also give you some tax benefits. Not only do you safeguard yourself and your family through insurance, but also further lessen your tax burden. These, and many other options can be considered while you’re tax planning. Also since it’s the festive season, know that any gifts you receive throughout the year under the value of Rs. 50,000 are not taxable.

If the total value of gifts crosses the mark, tax will be levied, but not in case the gift you received was from a relative. Stay informed about the world of tax because it can make a massive difference in your overall gains. Use these tax-saving strategies to minimise your tax burden.

Debt-Free Decorations

Analyse your liabilities, such as any home loan, car loan, education loan, or credit card debt. Do so by listing them all down and noting the associated interest rates. Try not to add to your existing debt because managing a large debt can be hard. You have to make a solid repayment plan now, one that suits you and you’re comfortable with. Generally, you should start by paying off the loan with the highest rate of interest because that can help you save a lot of cash in the long run. Pay off the credit card debt too because accumulating that can hurt your credit score.

Also Read: What is The Best Way to Help Establish a Strong Credit Score?

Look for other sources of income to pay off your debts as quickly as you can, like any bonus you received during the festive period, or by making cuts in the non-essential category of the budget. Target one debt at a time and quickly shift to another till you’re free of debt completely. Now if you don’t have any debt, avoid overspending with your credit card and maintain a healthy credit utilisation ratio. You want to get the burden of debt off your head as soon as possible so you can fully enjoy your financial freedom.

New Year, New Financial Resolutions

The New Year is the perfect time to examine the good and the bad happenings of the past and use that knowledge to make changes or a better future. When you make your New Year’s resolutions, make sure to give your finances the consideration they deserve. Be realistic about them and make sure they are achievable because you can be demotivated if you feel you’re not accomplishing anything, and abandon the promise. Here are a few you can consider:

  • Build an emergency fund –  If you don’t have one already, it’s vital to get started ASAP. Unexpected expenses can arrive at any time and it pays off being prepared. Having an emergency fund will let you not get sidetracked from your current investment path, protect your regular savings, and give you a financial safety net. It’ll help you avoid accumulating further debt and give you a sense of peace. 
  • Improve your credit score – A good credit score can mean a higher credit limit, lower interest rates, and ease in getting new loans approved. 
  • Boost your financial literacy – Do so by reading articles or watching or listening to finance-related shows. The more you know about the world of finance and its technicalities, the better and more informed decisions you can make. 
  • Keep an eye on your spending habits and try to save more money in the new year. Just because there’s a sale that doesn’t mean you have to buy something. It’s easier than ever to overspend with everything at our fingertips, but these small expenses add up.

Your New Year financial planning can include some resolutions like the ones listed above. Make sure to align them with your overall goals.


A new year brings with it new challenges, but if you’re prepared for them, and if you’ve built a comprehensive financial plan, you’ve got absolutely nothing to be worried about. Set a realistic budget, invest wisely, plan for your taxes, manage your debt, and make attainable resolutions so you always improve. Consider seeking the help of a financial consultant, who can assist you in building a financial plan that aligns with your financial profile. An experienced financial planner can enable you to secure a prosperous future. 

This holiday season, financial well-being can be the best Christmas gift you give yourself and your loved ones, because you’ll be reaping its rewards for years and years to come. So come, let’s raise a toast to financial wellness during this joyous time as we warmly welcome the New Year. Here’s to a financially successful future!

Merry Christmas and a Happy New Year!