Gift health insurance, start SIP: Balance festive spends with investing

As the festival season approaches, Indian households are filled with excitement, anticipation, and a long list of to-do tasks. For many middle-aged families, however, this festive energy is accompanied by financial anxiety.

 

At this stage in life, responsibilities such as children’s education, EMIs for a home loan, health-related expenses, and retirement savings already take up a significant portion of income.

 

The challenge, therefore, is to enjoy the festive cheer wholeheartedly while maintaining financial discipline and long-term investment momentum. However, the key is not to curb celebration, but to balance it. With a few mindful strategies, families can participate in the rituals, light up their homes, and spread joy without compromising future security.

 

Create a dedicated festive budget

The first and foremost step is to make a clear festive budget. Allocate funds under various heads. This helps you gain clarity and prevents emotional overspending. Importantly, do not resort to credit card rollovers, personal loans, or BNPL (Buy Now, Pay Later) schemes for meeting temporary expenses. The interest outflows from such borrowings often negate the short-term joy of spending. When you set a boundary in advance, you create financial room to celebrate guilt-free.

 

Integrate traditional gold buying with smart choices

Festivals are synonymous with gold purchases, especially Dhanteras. While jewellery purchases can continue as per family tradition, investors should consider channeling a significant portion of this into smarter options such as Sovereign Gold Bonds or Gold ETFs. These products provide the same exposure to gold, but with added advantages: SGBs yield 2.5 per cent annual interest, while ETFs offer high liquidity and price transparency. This way, you respect cultural practices while adding efficiency to your investment portfolio. 

Divide the festive bonus thoughtfully

For many salaried families, the bonus or incentive received around this time feels like a windfall. The risk is that it gets fully consumed in the joy of festivities. A balanced approach is to split the bonus. For instance, allocate 60 per cent towards festival expenses and gifts, while directing the remaining 40 per cent into investments such as mutual fund SIP top-ups, fixed deposits for near-term needs, or loan prepayments. This method ensures that your wealth goals progress alongside your festive indulgence.

Make financial gifting a tradition

Instead of limiting yourself to sweets, clothes, or gadgets, consider adding financial gifts that grow over time. Think of contributing to your child’s Sukanya Samriddhi Yojana account, starting an SIP in equities for your spouse, or gifting a health insurance cover to parents. Such gestures combine sentiment with prudence, and their long-term benefits create value that far outlasts material gifts. 

Keep SIPs non-negotiable

The golden rule during festive months is simple: never disturb your Systematic Investment Plans. SIPs are to your financial life what traditions are to festivals, sacred and continuous. Missing even a few contributions breaks the compounding chain, and the long term opportunity cost can be significant. Commit to running SIPs as usual, irrespective of the festive cash outflow. This is one habit that protects your investments from becoming seasonal casualties.

 

Practice responsible consumerism

Sales and festive discounts can trigger unplanned shopping. A cautious method is to create a wish list in advance and stick to it. Household discussions before making big-ticket purchases, like new cars, electronics, or luxury items, bring family alignment and ensure needs are prioritized over impulsive wants. Involving children in these conversations also instills financial literacy, teaching them that festivals are about joy and togetherness, not unchecked consumption. 

(Atul Shinghal, is Founder and CEO of Scripbox. Views are his own.)