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As the festive season approaches, many people plan their budgets to celebrate, but it’s easy to overspend
Can Gold Loans Can Fuel Your Festive Aspirations. Check Expert Tips. (Representative image)
The joy of celebrations shouldn’t cloud your financial judgement or lead to spending beyond your means. True celebration lies in moments shared and memories made with loved ones—possible only when you have a strong foundation of financial well-being.
As the festive season approaches, many people plan their budgets to celebrate, but it’s easy to overspend—especially for home loan borrowers. Here are a few tips to help you enjoy the festivities without risking debt.
Budget your expenses with a plan in mind
Create a budget plan to outline your expenses, taking into account your current income, regular expenses, necessary savings, and outstanding debts. Set aside funds for festive events, gifts, decorations, and celebrations. Additionally, remember to allocate funds for home loan payments to prevent holiday spending from interfering with meeting these obligations.
Repay your home loan on priority
Before planning your festive season spending, ensure your home loan payments are on time, as late payments incur penalties that increase your debt. Consider making additional payments toward the principal to reduce interest costs and shorten the loan term.
Timely payments contribute to building home equity, an essential asset when it’s time to sell, offering both security and stability. Conversely, late payments incur penalties that significantly raise loan costs, leading to unnecessary stress and anxiety.
Don’t spend more than you can afford
The time-honoured advice “Earn well before you spend” applies to every age. Set realistic expectations and don’t feel pressured to overspend just to keep up with others. Remember, you are your most valuable asset, and small, consistent efforts can greatly impact your career, helping you achieve long-term success.
Avoid spending money recklessly
Plan your festival expenses in advance. Make a shopping list and strictly align it with your budget to focus on what you want to buy and reduce impulse buying. Limit your spending so that the remaining money can all go towards making a partial prepayment on your home loan. This will be possible only if you set a clear spending limit before you begin shopping. Stay within your budget and resist the urge to buy unnecessary items.
Do not exceed your credit limit.
Carrying credit cards has become popular, especially among the younger generation, who enjoy shopping. However, the downsides of overspending with credit cards often go unaddressed, especially now that access to credit is so easy. Use a credit card only if you’re confident you can pay off the full balance each month to avoid interest charges. Avoid cash advances whenever possible, as they carry steep interest rates and fees. Remember, having a credit card doesn’t mean you should swipe it frequently or make unnecessary purchases.
The final word
You can enjoy a festive season without jeopardising your financial health or missing home loan obligations. While debt can be stressful, paying it off early is freeing, allowing you to save money and reduce the burden of accumulating interest and extended loan terms.
-The author is the Co-Founder and CEO, BASIC Home Loan. Views expressed are personal.
Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Readers are advised to check with certified experts before making any investment decisions.
