7 Financial Mistakes to Avoid to Prevent Bankruptcy After Eid

Kapanlagi.com - Eid often becomes a moment filled with happiness, but it can also have a significant impact on our financial condition. Many do not realize that expenses during Ramadan and Eid al-Fitr can swell if not planned well.

From shopping for Eid necessities, traveling home, to giving THR, all of these can drain savings in a short time. To avoid getting trapped in the same pattern every year, it is important to understand the financial mistakes that often occur after Eid as a first step to address them.

Here are some mistakes that should be avoided and strategies for managing finances to remain stable after Eid, summarized from various sources by KapanLagi.com.

1. Mistake 1: Not Making a Budget Plan

The first mistake that many people often make is not planning the budget properly. Before welcoming the Eid al-Fitr holiday, it is very important to prepare a detailed budget plan. Determine the allocation of funds for each need, such as transportation, new clothes, food, Holiday Allowance (THR), and others.

With careful planning, you can control your spending and avoid waste. Avoid relying on rough estimates, and make sure to record every expense in detail.

Mistake 2: Impulsive Shopping

Impulsive shopping is also a common challenge when Eid arrives. Discounts and tempting promotions often make us eager to buy items that are actually not needed. It is important to distinguish between needs and wants. Make a shopping list and be disciplined in following that list. If possible, postpone the purchase of items that are more of a want until after Eid.

2. Mistake 3: Using Emergency Funds

One common mistake is using emergency funds for non-urgent needs. Emergency funds should be set aside for unexpected emergencies, not to cover expenses during Eid. If you must use these funds, make sure to replenish them as soon as Eid is over. Having adequate emergency funds is crucial to be prepared for unforeseen situations in the future.

Mistake 4: Ignoring Debt Payments

Don't forget the obligation to pay off debts. If you have debts, make it your top priority to pay them off after Eid. Delaying debt payments will only add interest and increase your financial burden in the future. Use part of your Holiday Allowance (THR) to pay off existing debts to avoid falling into a difficult debt cycle.

Mistake 5: Draining All Income

It is important not to spend all your income on consumptive needs. After Eid, it is essential to set aside a portion of your income for savings or investments. By having savings and investments, you will achieve better financial security in the future.

3. Error 6: Using Credit Cards Without Control

Shopping with a credit card indeed offers convenience, but it can backfire if not managed wisely. One of the main causes of financial problems after Eid is excessive credit card use without considering the ability to pay the bills.

Many people get caught up in discount and cashback promotions when shopping for Eid necessities, without realizing that they are actually spending more than planned. This often results in inflated credit card debt after Eid.

As a solution, it is advisable to use credit cards only for transactions that genuinely provide real benefits, such as discounts on essential goods. Additionally, always prioritize cash transactions to make it easier to control spending.

Mistake 7: Spending THR Without Planning

Eid Holiday Allowance (THR) is often seen as a bonus that can be spent freely. In fact, THR should be used to strengthen financial conditions, not just for consumer shopping.

According to YouGov RealTime Omnibus research in 2022, nearly 70% of Indonesian workers use their THR for shopping, while only 31% allocate it for investment. This shows that many people are still not wise in managing their THR.

It is better to allocate THR wisely, as follows:

- 50% for Eid needs (homecoming, zakat, and charity).
- 30% for savings or investments.
- 20% for entertainment or personal desires.

With this strategy, THR will not only be spent in a matter of days but will also provide long-term benefits.

4. Post-Eid Financial Strategies

After Eid, it is highly recommended to avoid taking on new debt, especially consumer debt. If you need extra funds, try looking for other options such as taking a side job or selling unused items.

It is very important to reevaluate your spending after Eid. Take the time to review your expenses and identify areas where you have overspent. This way, you can plan a more efficient budget for the next Eid.

Here are some additional tips that can help you:

1. Look for Additional Income: If your financial situation has been significantly affected after Eid, consider looking for additional income through side jobs or by utilizing your skills.

2. Save: After Eid, reduce unnecessary expenses such as dining out or entertainment activities. Try to prepare your own meals to take to the office or school.

3. Open Communication: If you are experiencing financial difficulties, do not hesitate to talk to family or close friends. They may be able to provide support or helpful solutions.

By avoiding these mistakes and applying these additional tips, you can maintain financial stability and avoid financial problems after Eid. Remember that good financial planning is the key to achieving financial stability.

5. Questions About the Topic

1. What should you do if you have to use emergency funds for Eid?

If you have to use emergency funds, make sure to replenish those funds immediately after Eid to maintain a reserve for urgent needs in the future.

2. How to create an effective budget for Eid?

You can create a budget by listing all necessary expense items, such as transportation, food, and clothing, and setting limits for each of those items.

3. What is meant by impulse buying and how can you avoid it?

Impulse buying is purchasing items without planning. To avoid it, make a shopping list and stick to that list before shopping.

4. Why is it important to evaluate expenses after Eid?

Evaluating expenses after Eid helps you identify excessive spending items and plan a better budget for the following year.

(kpl/mni)