‘Tis the season’ is the phrase you’ll generally get to hear in the west when people start anticipating Christmas and it’s really close. In India, ‘Tis the season’ can be chanted all year long with unending festivals for each season. While this is an exciting opportunity for those who never want to stop celebrating life; for the slightly cautious ones, it is a threat to their savings and consequently their credit report. We share some tried and tested tips below which will limit your card swipes while also retaining your credit score.
Set a psychological cap
You must have noticed that when you carry hard cash in your wallet and spend out of it, you are cautious every time money goes out. This is because the transfer of money is visible and you can see your wallet thinning with every outlay. This subconsciously warns your mind to spend less the next time, when you know there’s only a little left. The same is not the case with Credit or Debit card where you tend to compare your spending with your total account balance. The ratio of which is obviously higher than the money in your wallet. You do not realize how much you have lost until the due date comes and you are reminded of your EMIs. What we learn from this human behavior is that it’s in the best interest of your bank balance to go out shopping with limited cash. Or in this age of digital money, you can download an e-wallet on your phone, transfer a small amount to it and spend accordingly.
Define your budget, preferably in advance
This point is in direct co-relation with the one above. When you set a budget, you can spend with the available amount in mind. If you know you have to spend more in the next season, start cutting down your expenses beforehand in order to balance the budget. When it’s festival time, set a budget according to your spending capacity and priority to avoid financial burden in the future. Make it a point to limit your spending within the peripheries of the set amount. The next step of setting a budget is to pre-define it for all major festivals in advance. For example, if it’s October already, and according to your savings, you still have a spending capacity of Rs. 1 lakh for the rest of the year, you can set a budget of spending 10,000/- for Diwali shopping; 60,000/- for Diwali Gifts & Decorations and 30,000/- for miscellaneous with a margin of say 5% i.e. 5000/- more or less. In this way, the fear of overspending or vague expenditures is eliminated and your budget is hugely controlled.
Keep caution while borrowing money
If the festive season is overwhelming and you JUST have to buy that new car on dhanteras, then go ahead with the loan. But always be mindful of your repaying capabilities and do not burden yourself beyond what you can bear. Your lenders are in constant touch with the credit bureaus of India and keep them updated about your every financial move. As such, be conscious of the effects of a loan on your credit score.
Stay updated about the best deals
During all major festivals, there is an enormous SALE going on, especially in the online world. Avail full benefit of this opportunity by investing your time on selecting your products, months or days in advance, and wait till the prices drop down. Push your TV, Phone, Fridge and Oven purchases till the sale as there is a huge discount on electronics and home appliances where you can save maximum money. Many times, when you are ignorant about the dates of an upcoming online sale, you end up buying the same thing at a higher price. It’s only days later that you realize that the same product is now on SALE for a dirt-cheap price. As sordid as it may sound, It’s rather penny-wise to keep a track of these minute details. It could save you thousands of bucks, let alone the tremendous mental satisfaction of having spent a lot less than otherwise!
Believe in the power of Personalized Gifts
As if your personal expenses and the expenses of your family were not enough, you are also expected to gift your friends, and extended family during the festive season. These are times when your budget goes haywire. The best thing to do when you are tight on money is to create personalized gifts. Personalized gifts such as handmade paintings, greetings, sweets etc. are not just high on emotional value but are also easy on the pocket. People actually appreciate if you give them your time rather than your money.
A consideration of all the above points will not just make your festival better but will also show positive changes in your credit report. Visit our website and treat yourself with a free credit score to check your credit health before the festivals begin!
