Tips to avoid overspending

TAKAFUL Brunei Keluarga Sdn Bhd (TBK) launched its Islamic Financial Planning Campaign recently in hopes of creating awareness on prudent spending and planning your financial goals.

The festive season is one of the most exciting times of the year where families gather over great food and good company at open houses. It is also a good time for businesses providing goods and services.

Ramadhan and Syawal are the most festive months in the Islamic calendar, and as much as we are excited to celebrate them, we should learn to reduce unnecessary spending.

Of course, there are ways to enjoy the festivities without bringing about financial burden. And you can still shop, responsibly.

Here are TBK’s six simple financial planning tips to avoid overspending this festive season.

1 – Set a Budget: Allocate a specific amount to spend and stay committed to the allocation.

Try not to allow yourself to be pressured, even by your children or family, into spending more than you budgeted.

2 – Make a list: Once you have a budget, it’s time to list down the things you need to get ready for the festive season.

Try to think through all the different aspects of festive season spending, which may include Hari Raya clothes, food, paint jobs and lighting decorations for your home, and money for the green packets.

3 – Focus on priorities: Look back at your list and go through it again.

Always start with the things that you need before you start listing out the things that you want. It is important in financial planning to identify between wants and needs.

4 – Not everything needs to be new: Just because it’s the festivities doesn’t mean that everything needs to be new.

The decorations can be recycled; there is no need to buy new ones every year. Trying to impress friends and family with new furniture or a bigger TV set does not benefit you financially.

5 – Pay cash or with a debit card: If you can’t afford something, don’t force yourself to go into debt to get it.

As much as possible, only buy things that you can afford to pay by cash or debit card. Only use your credit card for emergencies.

6 – Keep track: Make note of your spending. Every time you spend, always check your initial budget.

It’s a psychological trick when you see the amount gets lower, you don’t want to spend it and you tend to save it instead.