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Financial Planning Lessons from Holi Celebrations

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Colours in the air, your friends and family all around, the sweet smell of gujiyas and thandai, music on full blast, and there’s you, caught in the crossfire of pichkaaris and balloons. Ah yes. The festival of colours is truly a feast for the senses and a spectacle to behold.  But there is more to Holi than just fun. 

There is so much one can learn from it. Holi teaches us about love and forgiveness, about harmony and peace, about the victory of good over evil, and about financial planning. Yup! You’d be surprised to know you can take many lessons about financial planning from Holi. Right in the middle of this colourful festival, you can pick up some great tips about goal setting, budgeting, emergency planning, investing, and more. So let’s jump in!

Setting a Financial Goal – Like Preparing for Holi

As you start your Holi preparations you make a list of things you need to do. All the things you need to buy, the food you have to cook, the decorations you want, the people you want to invite, the gifts you want to give and so on. Overall, your overarching goal for these little Holi errands is to have a good time with your friends and family. That is ultimately what you also do with financial goal setting. 

You set your financial goals – short-term goals such as saving for a vacation, medium-term goals such as investing to buy a home, or long-term goals such as building a retirement corpus, and work towards these goals hand in hand to have a fulfilling financial life.

These financial goals give you direction and purpose, so setting clear objectives is the first step in building a solid financial plan. When you’re setting your goals, it’s important to be SMART about them. SMART means Specific, Measurable, Attainable, Realistic, and Time bound, so make sure you clearly define your financial goal and set realistic savings targets that you can attain in a comfortable time frame. Your financial goals guide your actions, and with SMART goal setting, you will be much more likely to achieve your financial goals.

Budgeting for Festivities and Expenses

Alright, you’ve made your Holi to-do list, and now it’s time to get things moving. Your goals will give you a good estimate of the resources you need to plan your celebrations, so all you need to do now is to wisely and efficiently allocate them. That’s how it works in financial planning too. Once you have your SMART goals, you draw up a budget to achieve them. A budget outlines your expenses and helps you to live within your means. It makes sure that you spend less than you earn and encourages savings. 

To make a budget, first, you need to have a clear understanding of your financial situation. This means knowing all about your income, expenses, savings, assets, and liabilities. Then, you should categorise your expenses into different parts – essential expenses which include expenses such as rent, mortgage, groceries, electric and water bills, and non-essential expenses which are what you spend on recreation, hobbies, and leisure. 

Generally, it is said that one should spend about 50% of their income on essential expenses, 30% on non-essential expenses, and save 20%. This way, budgeting can help you identify areas where you can make cutbacks. For example, after drawing up your budget you might notice that you are spending too much on buying clothes you don’t need. Identifying such non-essential expenses allows you to redirect those funds towards savings.

Just like you would prioritise buying colours above anything during Holi, you should prioritise your savings. The more you save, the more you can invest, and the quicker you can realise your financial dreams. As soon as you receive your monthly income, you can save a certain percentage before spending anything. But remember, like your goals, your budget should be realistic too. 

If you make too many cuts from your non-essential expenses, you run the risk of getting burned by depriving yourself of enjoyment that contributes to your overall well-being. Find the right budget allocation so that you can stay motivated in the long term to stick to it. 

Avoiding Impulse Spending – The Water Balloon Effect

These days, impulse spending has become increasingly common. We are constantly bombarded with ads, and thanks to online shopping everything is just a few clicks away. We have nurtured a culture of instant gratification. You might think it’s not a big deal, just a small purchase, but that kind of thinking can be very harmful. Some purchases once in a while are fine, but impulse spending can easily become a harmful habit. And the ease with which one can get a credit card these days? Impulse spending can snowball into debt. 

We celebrate the first day of Holi as Holika Dahan, where we light a bonfire and symbolically burn all evil. Why not take it as an opportunity to burn our financial evils such as impulse spending? The money you can save by resisting your impulses can be redirected towards investment planning that can pave the way for long-term financial growth.

Your budget can be a lifesaver when it comes to keeping impulse spending under control. You can set spending limits and stick to them to avoid unnecessary expenses. 

Emergency Funds – Rain Dance Reserves

When you’re right in the middle of celebrations, the last thing you want is to suddenly run out of colours or gujiyas. That’s why it’s always a wise move to have some extras tucked away, you know, just in case. With this little extra preparation, you can make sure that the fun keeps going without any interruptions. Once again, the same thing applies to financial planning! Unexpected situations such as a loss of employment or home repairs can interrupt your life, and the financial fallout from such events can be pretty big. That’s why we do emergency planning, where we build emergency fund

An emergency fund is a reserve of cash that is used to cover unforeseen expenses such as a medical bill. These unexpected expenses have the potential to wreak havoc on your finances but with proper planning, you can cover them quite easily. This safety net doesn’t just protect you from these costs but also helps you avoid debt. On top of that, emergency planning also makes sure that you don’t have to liquidate your long-term investments. Generally, it’s advised to maintain at least six months’ worth of expenses in an emergency fund, and in an easily accessible account.

Interestingly, Holi falls around the time when the new financial year is about to begin, so it is an excellent time to resolve to build an emergency fund if you don’t have one yet!

Investing for Future Celebrations – Planting the Seed

When one plays Holi, one takes a lot of precautions because apart from colours all sorts of stuff like sprays, paints, and grease are flying around. These substances can be quite harmful to the skin, hair, eyes, nose, and lungs, so we play sensibly and use organic and safe materials to protect ourselves. 

Similarly, when we invest, we must take a sensible approach. Before investing, you should have a clear understanding of your financial goals, situation, time horizon, and risk appetite. These factors can help you identify suitable investment options. When you are building your portfolio, make sure to diversify by including a variety of options such as mutual funds, stocks, bonds, real estate, and gold to reduce risks. Think of your portfolio as the Holi plate, and all the assets as colours. Just one colour is never enough, is it? 

Protecting Your Financial Future – Shielding from Color Splashes

Lord Brahma blessed Holika with a cloak which protected her from fire. When she took Prahlad and sat on the pyre, the cloak flew from her and onto Prahlad, and so Holika burned and Prahlad was saved. We could all use a cloak like that to save us from financial troubles, don’t we? Well, insurance is our cloak, and it acts as a financial shield against the fires of uncertainty. You can insure your health, life, your assets such as your properties. Comprehensive insurance coverage is an important part of any financial plan and it safeguards you and your family from the hefty medical bills, repairs, or any unfortunate event. 

There are different kinds of health and term insurance plans that are tailored to meet different needs and preferences. For example, a pure protection term plan that has low premiums but no maturity benefit, a guaranteed return insurance plan that guarantees a maturity benefit as well as a death benefit, or a Unit Linked Insurance Plan which not only provides insurance coverage but also offers investment opportunities and tax benefits. With so many choices available, it’s important to carefully weigh your options and select the plan that best fits your financial circumstances and goals. On top of safeguarding you and your loved ones, insurance will also give you confidence and peace of mind.

Celebrating Responsibly – Eco-Friendly and Financially Friendly

During Holi, it is our responsibility towards nature to be mindful of the environmental impact of our celebrations. We use synthetic colours, too many water balloons, and no doubt too much water. To be more eco-friendly, we should use organic and eco-friendly colours, and limit the use of water balloons and water as much as we can to promote sustainability. 

Similarly, we can get careless when managing our finances. We tend to ignore or abandon our budget after a few months, not have any control over spending, live above our means, take on too much debt, buy stocks without proper research, etc. So it is our responsibility to be financially friendly as well. This means saving and investing regularly, setting specific goals, managing credit wisely, making a realistic budget and sticking to it, consulting with financial advisors, regularly monitoring our investments, etc. to make our financial planning more sustainable and fruitful. 


From setting financial goals and budgeting to investing and risk planning, who would’ve thought Holi could be such a financial guru? Applying these lessons in your daily life can take you far. Holi is a time for reconciliation and forgiveness. It is a time when we let go of the grudges in the past, so one should let go of past financial mistakes, learn from them, and move forward with confidence. 

It is also a time when we build new relations, so this Holi, if you’re seeking advice about investment options or financial planning, don’t hesitate to consult with a professional and build a relationship that can secure your financial future. 

Wishing you a very Happy Holi!