Seven effective principles in managing your finances during festive season
It is common to spend more money during festive seasons than any other time of the year. Nevertheless, ‘seasonal spending’ is being abused and has led many to the state of going ‘broke’ and even bankrupt when the festive period is over. A lot of people see ‘excessive spending’ acceptable during celebrations without even considering their income status, only to be full of financial regrets once that period is over. While there are several reasons that could propel one to indulge in spontaneous spending, there are also proven principles that when practised, will help you manage your finances effectively.
Ensure to spend less than you earn:
Never let your expenses be equal or surpass your income. Spending less than your income puts you on the conscious spot of applying discipline in managing your finances especially during the festive celebration. It also prevents unrest, unnecessary panic, mental distortion and every other negative effect that occurs when one has financial problems.
Stop the comparison:
Most people spend based on how they see others spend. We don’t live our own lives, walk our own path and run our own race; we try to live the life that we see other people living, failing to recognize that we are all different and have different needs. Don’t use other people’s lifestyle as a yardstick for how you spend. You have to cut your coat according to what you can afford and NOT according to other people’s budget and financial ability.
Do not follow trend:
You must not identify yourself with what others are doing. Endeavour to be unique and work with your budget. It is not necessary to be involved in what is trending. . Make an effort to draw the line between what you ‘want’ and what you actually ‘need’. Examine your income and ask yourself necessary questions such as – is it essential I buy new clothes during the festive season? Do I really need to go on this vacation? Do I have the budget to host a festive party? Although, it is commendable to celebrate the festive season, it is also very necessary to be prudent in your spending.
Create a “festive” budget:
To avoid being unhappy with the state of your bank account when the festive period is over, before the peak of any festive season, it is necessary to create a habit of budgeting and sticking to a certain amount you intend spending during the festive celebration. With this, you consciously discipline yourself by making an effort to spend within the budget during the festive season.
Track your expenses:
Make a record of every dime you spend. Tracking your expenses helps you measure your spending habit and propels you to make adjustment where necessary. It also makes you take proactive steps to cut off expenses that are not necessary and encourages you to save more. This is a very simple practice that can stop you from spending on unnecessary things especially when compelled by your environment or external factors.
Get an accountability partner:
One of the main reasons people are not able to effectively manage their finances is because they are not accountable to anyone who helps them monitor their spending and saving habit; someone who will motivate, propel and give them that extra ‘push’ of support to be financially disciplined. It could be quite difficult mastering the skills of financial management on your own. In this regard, you need to have an accountability partner, preferably a finance coach who will guide and help you review your money management, budgeting, expenses, spending and saving patterns.
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