Every penny counts: Finance tips to make your home special this Christmas
Tradition calls for plum cakes and wine, while everyone enjoys Christmas time. With a big Christmas tree, decorated all bright, children wait for Santa to come at night.
As the Christmas spirit dawns upon us, it’s time to spruce up the house and make it cosy. Many a time, Christmas calls for “spring cleaning”. Further, shopping for new clothes, presents for everyone, decorations, and feasts, can leave one’s pocket quite done and dusted.
Being financially wise during the season time can save many a dime. Considering that the New Year is approaching and resolutions arise backed by reason, it would be good to start being financially prudent during the season.
Here are a few tips on financial management during the high-budget season.
Credit cards - Using your credit card to buy what you need during Christmas may be the only way to have all the season trimmings. But is it worth the interest you’d be paying back? If you haven’t saved enough to take care of the season expenses, a credit card might come in handy. Here’s what you need to be aware of when you use your credit card.
● Only spend what you can pay back in full.
● If you pay your bill in full by the due date, the bank does not charge you interest.
● Buy things on your credit card on EMIs, if available. This enables you to pay for it in easy installments at a fixed interest rate.
● If you choose to carry forward a balance of payment due on your card, be aware that you will be charged interest on the balance as well as any subsequent purchase you make.
Credit cards are great for buying big-money items that can be purchased on EMIs. Some banks offer zero processing fees or zero interest on the purchase which makes it ideal for budget spenders.
Personal loans - Personal loans, easy credit, and overdrafts are so easily accessible these days. A good portion of society depends on these loans to fund not just emergencies but general home expenses, travels and vacations, whims and fancies. Personal loans are actually a good option if the purpose is worth it. One must remember that these loans are unsecured, meaning there is no collateral required. Therefore, the banks charge a higher interest rate because the risk they take is huge. Personal loan interest rates usually range between 13% to 20% p.a. If you take a loan for a short tenure, the interest payable may not be that much. The loan could be worth it to meet immediate expenses. However, if you take a long tenure, even if the principal amount is small, you might end up paying a lot as interest. Look out for an optimal loan tenure, principal, and interest rate when choosing a personal loan. You should also take into consideration processing fees and prepayment options.
Insurance - You might wonder how insurance makes your home special this Christmas. In India, not many people take insurance on their homes. It’s not a popular product because people don’t anticipate losing their houses or incurring any damages. But in light of the shoddy development of our cities, home insurance is becoming more appealing as the days go by. Insurance can provide financial protection against theft, fires, and floods, among others. You can also insure the contents of your home such as your television, refrigerator, and other valuables. Insurance makes your home more secure and gives the owner and occupants a peace of mind.
Savings - New Year’s resolutions only last a few days before their long forgotten till next year. Never forget that “a penny saved is a penny earned”. Always plan to meet seasonal expenses. If not for this Christmas, plan for the next.
Things to keep in mind before you splurge this Christmas
It’s so easy to forget what Christmas is all about. We get wrapped up in presents and having a decked out Christmas. But we tend to easily forget the true meaning of Christmas. So before you splurge, you need to think about a few things:
● It’s hard to do, but a budget would really help in not going overboard.
● Make sure you spend what you can afford to pay back.
● Don’t spiral into debt because of a wonderful holiday.
● Buy what you need.
● When it comes to presents, it’s the thought that counts. Gifts from the heart go a long way.
● If you choose you whip out that credit card or take the plunge with a personal loan, do your research before you swipe/apply. Take note of the interest rate, tenure, total interest payable, prepayment options, and any other fees and charges.
●Use an EMI calculator that’s available online to help you easily calculate the details of your loan amount, interest payable, processing charges, and EMIs.
Following a few tips and tricks can make this Christmas a truly enjoyable and peaceful one. Make sure unwanted debt doesn’t ruin the season fun.