Ever wondered why is it that even though you’ve fulfilled your near and dear one’s wishes by incurring an expenditure, which you’d have preferred not to at the present moment owing to the current financial health, you tend to feel not only happy but also regret and guilt? Have you ever given in to emotions and taken decisions, which cause financial stress to you, only to impress people around you? If yes, then now is the time to become accountable to self and take responsible financial actions.

The concept of emotions and their fulfilment is a tricky one and relative altogether. Know the four basic ways in which you easily succumb to emotions and fall into a debt trap..

MARRIAGE:

Marriage is an important event in a person’s life. Destination weddings with the fun of a pre wedding shoot, the craze for hosting a big fat Indian wedding which goes on for many days and includes almost every other person in the city, the charm of Bollywood themed functions etc seems to be the present trend. The present trend is such that the expenditure incurred becomes the highlight of the marriage rather than the bride and the groom themselves.

What one fails to understand is that with marriage comes a financial responsibility.

You needn’t go beyond your means to make the marriage of your child seem like a fairy tale one. It’s obviously not wise to empty your pockets at one go when you don’t even own your own house or when debts are mounting up at your doorstep ready to drown you under its weight.

What to do?

• Prepare a separate budget for marriage based on your financial health and accordingly incur expenditures.
• While gifting, gift anything that strengthens or secures the financial health of your child like investments(shares etc). You surely wouldn’t want to be ported from the venue of marriage to a hospital or let’s say even a bank or a lender’s house.

IMPULSIVE PURCHASING:

We all go through our highs and lows, some of us do it gracefully while others struggle through it. The digital world has offered a number of options to purchase almost anything on the internet. With one click, you can get what you want at your doorstep. Many youngsters use shopping as a means to get over anything unpleasant or to show their happiness. Little do they realise that such a “remedy” slowly digs into their financial health and sooner or later they fall into the debt spiral. .

A classic example is when you earn your first salary and you immediately purchase expensive gifts for your family members and friends. You’re so happy that you forget that the same amount when invested can yield far better returns and accordingly gifts as well.

Another example is when you’ve had a bad day and you decide to pamper yourself by shopping online and eating out at expensive restaurants.

What to do?

• The next time you want to purchase something, attach the item’s worth with the amount of time you’ve spent to earn that money. For example: You earn Rs. 1000 per day (Rs. 30,000 per month). You wish to purchase an item which costs Rs. 3,500, which equals 3.5 days of your hard work.
  Ask yourself, “Is this item really worth 3.5 days of my hard work?” TRUST ME, THIS WORKS!
• When you get tempted to spend money carelessly, ask yourself if you would’ve really purchased the product if you would’ve been normal.
• Stop and think if it’ll suit your financial health.

Adopting the above steps will go a long way in forming the right financial habit which is very important for building and securing your present as well as your future.

DEMANDS OF FAMILY MEMBERS:

If you are the sole bread winner in your family, meeting everyone’s requirements or demands can be challenging. In your attempt to provide the best of facilities and comforts to them, you sometimes miss out on the reality check of your financial health.

For example, your child has just passed out of 10th std and for his birthday he demands the latest model of iPhone. He pleads in such a manner that your heart “melts” and you decide to gift him what he desires. This process continues every time he demands something of you. By doing this two things are happening- one is that your bank balance is falling to extent the amount is spent or if you’ve taken the EMI option, your debts are mounting and second is that you are becoming the reason behind your child’s intolerance to hearing the word, “NO”..

Another example is when you undertake frequent travel to exotic places, for obviously travel is the new norm,,with your family members without really working out on the finances.

What to do?

• In the first case, before giving in to any demands, consider all factors relating to the purchase, like, what purpose would the product serve, is it really required at the present moment, and if so then can I go for a cheaper alternative which will suit my pocket. The point is to make a deliberate financial decision by practising financial discipline at all times.
• In the second case,doing anything that most people are doing gives you a sense of belongingness with the world, whether you want to do it or not become secondary, which is a dangerous thought. Analyse if you want to travel to that place, prepare a budget for travel and consider economical alternatives.

Such small changes indeed play a huge role in saving up a bulk of your money from wastage and debt altogether.

FESTIVITIES:

Festivals are always looked forward to because:

• You get a break from your monotonous lifestyle; it’s that time of the year when you purchase new clothes, prepare savouries at your place and send gifts with unique packaging to your near and dear ones, customers and much more.
• You get an opportunity to emotionally invest with prospective customers. Although this may sound like a good marketing strategy, among others, adopting this would take away a significant part of your income from your pocket.

The issue is we tend to over pamper ourselves and people around us and also overlook our existing financial commitments in the festive craze.

• During such times various e-commerce websites provide tempting offers- we successfully fall into these traps by purchasing even those products which we don’t require but purchase it anyways because it’s offered cheap. We consider these platforms as great savings engine but forget that the rails of such traps are only leading us to the destined world of debt spiral.

What to do?

• Festive season or not, practise minimalism while purchasing. Minimalism will help you make prudent financial decisions by which you can celebrate whenever you want.
• Prepare a festive budget as per your financial standing and stick to your plan. For example, if you plan on gifting 50 people, a variation of plus or minus 10 is admissible but if you land up gifting 150 people, it becomes problematic.
• Weigh the pros and cons along with your financial stability before considering gifting prospective customers.

In all, emotions can successfully hijack your finances if you don’t back it up with financial discipline. Think smart, act smarter.