Dusshera, Dhanteras, Diwali, Christmas, what do they have in common? Overspending! And before you say it, simply trying to underspend or saying no to every little expense during the post-holiday period is not the solution. What you need is a carefully crafted plan that can prepare you to face your obligatory expenses and help you pay off your debts and dues. Let’s see how to pump life back into your financial health.
What is financial health?
It’s the building block of your economic standing. Simply put, it is all about how you manage your finances. The better you balance your income, expenses, and savings, the healthier you are financially. This way, you can ensure you have enough money for your unavoidable expenses, from paying electricity bills to EMI dues. Sounds challenging? Well, good news! You don’t need a 5-year plan to save your money! Taking it slow, one day at a time is the best way to even out the odd ends of your finances after a period of overspending.
Why is it difficult to recover your financial health after the festive season?
While keeping a daily check can work wonders for your wallet, sometimes this is easier said than done. The festive season is one such time when your financial health can take a bad blow. From expensive gifts and travel plans to home decor and social gatherings, your savings can deplete in the blink of an eye.
How to recover your financial health after the festive season?
1.Tighten your budget:
“A budget is telling your money where to go instead of wondering where it went!” — John Maxwell.
Wondering about your expenses is a thing of the past! You can easily bounce back from the festive spending spree with a properly planned budget. Buy the nicest outfits, eat at the finest restaurants, and give your friends and family the best presents, do it all. But then you must clamp down on any extra expenses till your finances are back on track. Having spent money on buying gifts, sweets, firecrackers, and other luxuries, you must now list your pending bills. Highlight your essential expenses and make them a priority. Doing this will help you understand how much you can spend before putting your foot down.
2. Time to make a list:
Overspending can make you lose track of your monthly bills, thus putting pressure on your financial goals. So next time you whip out your card or cheque, ask yourself twice, how badly do I need this? Yes, sometimes it’s more of a want than a need, but surely you can put it off for a few days or weeks till you are up to date with more pressing financial needs. Make a list by jotting down the necessary items first, and then reconsider your short-term expenses, like going for the latest movie or buying that new winter jacket.
3. Examine all your expenses:
Keeping track of your expenses is vital. Simply put, you cannot get up to date with your bills if you don’t know how much you spent on every item. Whether you’ve spent 10 bucks on a Dairy Milk, or ₹1,000 on a box of firecrackers, revisit your expenses. This way you can track how you went over your estimated budget. This will help you plan your finances better for the following weeks. You can save enough for your essential payments while enjoying the holiday to the fullest!
4. Take care of your credit card dues:
The festive season comes with a plethora of offers, discounts, and sales that can lure you into spending aimlessly using credit cards. From offline stores to online platforms, your credit can pile up in a second. Always remember, you cannot cut your losses by maxing out on your credit cards. While it provides a temporary lease of life to your festive revelry, this practice will come back to haunt you in the coming days. Spending on credit cards incurs high-interest charges unless cleared within the next billing period. You should make it a point to repay your entire outstanding bill within the due date. This is another place where a bucket list with your high-priority expenses comes in handy. In case you crossed your credit limit, you can opt to get the extra amount converted into EMIs. This will allow you to repay your dues easily without defaulting on your payments.
5. Bills always come first:
If it seems like all the preceding steps pointed to this one, that should tell you how crucial it really is! While it’s difficult to know the expenses that the rest of the month will entail, it is always advisable to first pay for all your necessities, such as rent, EMIs, interest, and other bills. This will free up your obligations and your mind from the tension of “should I/should I not?” The timely payout of your dues also gives a massive boost to your financial health. In fact, banks can also trace this through your credit score and other methods.
If you would like to learn more about how to manage your financial health, check out: Personal Finance Mistakes Everyone Should Avoid
Were you unable to stick to your budget this festive season and succumbed to the little joys of life? Fret not; there is always a tomorrow. Keep these simple tips in mind and plan accordingly before the next round of festivities come your way! Just as every stone counts to make a bridge you should start saving to repay any personal loans you may have taken during the festive season. You can also invest in various earning schemes that can set you up for festive expenses without putting pressure on your finances afterward.
Head to Bajaj Markets to check out our different investment schemes.