Personal Finance

ET Wealth Wisdom Ep 137: How to spend responsibly this festive season


Transcript

Hi everyone and welcome to episode 137 of the ET Wealth Wisdom podcast
I am Tania Jaleel
There is slight chill in the air as October gives away to November
At the same time festive sights and sounds fill the air.
People around the society have started putting up decorative lights are going up at most flats.
We are well and truly in the midst of festive season
Uma Shashikant of CIEL writes in this week’s ET Wealth edition that year after year, how we celebrate is a showcase of how much family finances have gotten better for the normal urban household.
The ordinary urban middle-class household does not seem to show stress and strain of life when it comes to festivities and celebrations she writes.
In this podcast we take a look at 5 personal finance rules one should follow this festive according to Uma Shashikant
First, make sure that your spends are aligned with your income.
It is a good idea to keep a percentage allocation, so you know how much you can realistically afford.
If 10% of your annual income is spent in the last three months of the year on festivities, make sure that won’t hurt your long-term goals.
Draw that line mentally, get your family’s buy in for the decision, and enjoy the spend as a reward for yourself and your family.
Having an overall budget is a good way to stop expenses from compromising other financial goals.
It also hopefully motivates conservative spenders to boldly spend their money.
Second, make a mental distinction between experiences and material objects.
When you recall an earlier Dusherra celebration, you are unlikely to remember how pretty that expensive glass bowl you bought looked on your dining table.
Quite likely it has given way for something else already.
But you will remember how you forgot the rasmalai in the fridge; how your long lost friend found and called you; how you won the family card game; and how much you laughed when your spouse forgot their glasses.
What looks like an ordeal usually becomes the most repeated family story.
Gather those experiences; don’t let objects take away money and attention.
Third, remember that there is a limit to appreciation and acceptance by strangers.
What looks like an appreciation might be laced with jealousy that you have not yet identified.
So much of personal finance wastages finds its roots in trying to impress people that don’t matter much in your lives.
You might miss identifying the real friends, if all you like is being surrounded by people who will praise and appease you.
Do not equate enjoyment with spending money on things and on people only with the intention to impress. Your money has better uses.
Fourth, be kind to those less privileged than yourself. In a country with so much of income inequality, an ostentatious display of wealth and money is cruel to the underprivileged.
It is nice to be sensitive about these differences.
It is even better to open up your heart and your purse to bring some joy to others around you.
If donations help those you don’t know, make sure you include those that you know.
Give your staff a break and a bonus to enjoy the festival with their families.
Do your bit to spread the festive cheer.
Fifth, take a hard look at your hoards that you do not use.
That plot of land you never visited; that one room flat you can’t maintain; those expensive clothes you don’t wear anymore; those pieces of jewellery you do not fancy anymore; and those artefacts and objects you have filled your house with.
If something is not part of your life and your everyday joys, why burden yourself carrying them around?
Find the time and the heart to let it all go.
You might find better uses for the money that is locked in; or you may find better things to do with your time and effort; or you may realise that the “some other time” that you will use these is not coming up soon.
Make the festive season the time to clear up the clutter.
And on that note will be all for this week
Come back next week for more wealth wisdom



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