Diwali, Christmas and then New Year brought along with it a lot of celebration, jollification and merry making. The long holiday week saw a surge of people flooding the roads and skies, cross travelling between cities and countries. Gauging the streets filled with frantic shoppers, shopping it seems, has reached an all-time high. People are desperately trying to keep up with the lofty lifestyle of this generation. With all the glitter around you, you are compelled to believe that If you are not spending, you are not doing it right. Certainly then, all this subsistence comes with a price tag. Considering you too went a bit overboard on your spending this festive season, here are some tips to get you back from your financial guilt-trip.
1. Get rid of your credit card, well just temporarily
Do this right now. Hide your credit card and forget about its whereabouts for a month! Seriously, that’s the only immediate way to escape further debt. While we know this is not practically doable, but having a credit card handy post is like lingering around the forbidden fruit, one bite, and get ready to be kicked out of the garden. Resist the temptation if you don’t want to bleed your credit score further. You can use a debit card instead to avoid the risk of debt. Better still, is to use a digital wallet or withdraw the old fashioned cash from the ATM and spend the same. In this way, you have a limited resource to spend from which keeps you aware each time the amount is deducted. The point is to pause your credit card usage for a while until things settle down!
2. Instead of buying new stuff, sell or exchange old one
Instead of indulging in buying something new, learn the art of selling, recycling and reusing. There are quite a few unused things in every house which can be either reprocessed or sold off. With various online portals at your disposal, selling has become as easy as buying. Those items which lay unused occupying your space could be sold off for a goodly return and for good. If you are not among the ones to engage in the hassle of selling, then you may look out for exchange offers. There are offers on electronics and clothes where you can exchange old ones in return of a new one minus the value of the old.
3. Prioritize on clearing your debt
Stress on clearing your debt first. Maintain due diligence wherever possible. Even the seemingly trivial expenses such as having outside food and drinks, turning off your AC/lights, cutting down your car drives, avoiding using debit/credit card in place of cash, avoiding unnecessary purchase of things could collectively have a significant effect on your savings. In this way, you will be able to repay the monthly EMIs on time and pay at least the minimum due credit card amount. You will also learn some discipline and could even inculcate this as a habit thus helping you in the long run to improve your credit report.
Now that the festive season is over and the damage has been done, it is time for you to scrutinize your financial health. In India, you are entitled for free credit score from any of the four bureaus authorized by RBI. Credit scores can vary across the bureaus and an overall score of 700 and above is considered healthy for all.
Seth Godin, an American author says, “People do not buy goods & services. They buy relations, stories, and magic.” This quote indicates that our buying decisions are not completely based on rationality but are driven by some emotional impetus such as Love, Pride, Ego etc. We don’t just want to buy a utility, we want to buy a memory. Hence, while buying, we tend to prefer something expensive over useful in order to maintain our status.
The company you have while shopping also matters a lot as they influence your buying decisions more than you think. You only realize what you have purchased once you are in the ecosystem of your own house. Spare yourself this emotional atyachaar by keeping your head on your shoulders while shopping. If you comply with the above laws, you will soon find yourself out of this financial mess!