As the year draws to a close, household spending typically surges, encompassing expenses for holiday gifts, and entertainment. Amidst these expenditures, it's common to feel the urge to splurge.
Adhering to a budget is crucial for avoiding debt and maximising savings and investment opportunities. “If you haven't started budgeting yet, the holiday season is an ideal moment to begin,” said Raghunandan Saraf, Founder and CEO, of Saraf Furniture.
To avoid the Christmas debt trap, it's critical to approach holiday shopping sensibly. “Begin by creating a realistic budget and sticking to it religiously. Avoid the temptation of spontaneous purchases by creating a list of planned presents and expenditures that are within your financial constraints. Avoid spectacular discounts that could lead you to splurge on unneeded things,” said Nidhi Aggarwal, Founder, of Spacemantra.
Even if you have savings earmarked for holiday shopping, there's a strategic approach that many consider: utilizing a credit card for purchases and then promptly paying off the bill using your savings, said Sundeep Rana, Co-Founder, of NetSetGo Media.
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“Start your holiday preparations early to capitalize on better deals before prices surge closer to the year-end school break, taking advantage of post-festive season clearance sales when necessary,” said Saumitra Singh, MD, The Tigress Ranthambore.
Consider wisely allocating a portion of your year-end bonus to settle small debts, enhancing your overall cash flow rather than splurging it all during the holidays, added Saumitra Singh.
By implementing these strategies, you can enjoy the festive season without straining your finances.
Disclaimer: The views and recommendations made above are those of individual analysts, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
