The fragrance of flowers and mouth-watering sweets, all around these days, indicate the festive season is finally here. With the festive season comes the time when you purchase your own car, bike, air-conditioner, or a new home. As sale, offers, and discounts fully grab your attention, here are a few tips to save money, and manage your expenses amid Diwali celebrations.
First, as a thumb rule, plan your expenses ahead of any big celebration. It makes sure you don’t overshoot your budget and keeps you in check whenever you try to trump the neighbourhood Diwali celebrations. This doesn’t mean you shouldn’t celebrate. But you should make an estimate about planned purchases, regular expenses, and monthly EMIs so that you can celebrate the occasion without burning your pockets.
Secondly, if you have been thinking of buying your own home, I would suggest you delay it till the festive period is over. As this period is considered auspicious for new beginnings, many people plan to purchase their own houses. Further, builders and lenders across the real estate industry offer incentives on the purchase of new homes, home loans, discounts on processing fees, low interest rates, zero stamp duty, gold coins on pre-bookings, among other benefits that can make a significant difference to your initial expenses. Imagine your dream home costs Rs. 20 Lakh and you’re planning to pay Rs. 5 Lakh from your pocket as a down payment and take a loan for the remaining Rs. 15 Lakh. During the festive time, your builder may offer some discounts on the per square feet rate, resulting in a revised pricing of Rs. 18 Lakh. Now you can either pay a lesser down payment as we recommend, or pay the same down payment, and take a loan of Rs. 13 Lakh instead. The best way to reduce your loan is to take a smaller loan.
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Thirdly, if you have already taken a home loan, make good use of your Diwali bonus. You must have heard the proverb, a stitch in time saves nine. Here it means, a prepayment on time can save a lot on interest rates. Prepayment is an option provided by many lenders, where borrowers can pay certain amount over and above their EMIs. This amount is deducted completely from the principal amount. As the borrower doesn’t pay interests on this amount for the loan tenure, they save interest which would have otherwise due on it for future. You can opt for either a one-time lump sum payment, or small prepayments over a period. This way your one-time bonus can bear more fruits compared to its value in future.
Go ahead, plan the budget. Keep some amount aside for emergencies and you have a set amount that can be utilized for celebrations. Make good use of your Diwali bonus. You will be stress free, and the happiness will remain there for years for you and your family.
(Gaurav Mohta is CMO, HomeFirst Finance)
