Dashain is just behind us and Tihar is a couple of weeks away. If you're like most Nepali households, this is the most expensive stretch of the year: new clothes, meat, tika money for the little ones, the bus or flight home, sweets and lights for Tihar, gifts for the sisters.
None of that is a mistake. These are the moments the money is for. The mistake is treating it like a surprise. Dashain comes every year, around the same time, and costs roughly the same. Yet every year a lot of us pay for it with a festival loan, a credit card, or a few months of quietly cutting back afterwards.
The festival allowance isn't a plan
If you're on a salary, you probably got a festival allowance, often a month's basic pay. It feels like the festival is "covered." But look at what actually happens:
- It's often smaller than the real cost. Basic salary is usually well below your total pay, and the festival bill tends to be bigger than one month of anything.
- It arrives late. By the time it lands, the shopping has started on borrowed money or the wallet.
- Not everyone gets one. If you're self-employed, a daily-wage earner or abroad, there's no allowance at all.
The allowance is a nice top-up. It shouldn't be the whole plan.
Step 1: Work out what this year actually cost
Do this now, while you still remember. Go through your wallet and bank statements from the start of Ghatasthapana onward (the same statement check from my wallet spending post) and add up everything that was festival-related. Here's an illustrative example for a family of four:
- Clothes: Rs 15,000
- Meat and food: Rs 18,000
- Tika money and gifts: Rs 12,000
- Travel home: Rs 8,000
- Tihar extras (sweets, lights, Bhai Tika gifts): Rs 7,000
- Total: Rs 60,000
Your number will be different. What matters is that it's a real number, not a guess. Most people underestimate it by a lot, because it's spread over three weeks and dozens of small payments.
Step 2: Divide by twelve
Rs 60,000 spread over a year is Rs 5,000 a month. That's the whole trick. A sum that feels painful all at once becomes a regular line in your monthly budget, the same as electricity or school fees.
This is called a sinking fund: money you set aside bit by bit for a cost you know is coming. It's different from your emergency fund. Dashain isn't an emergency. You know the date.
If Rs 5,000 a month is too much, start with what you can and plan to rely on the allowance for the rest. Half covered in advance is far better than nothing.
Step 3: Keep it somewhere separate
A festival fund mixed into your main account will get spent on something else by Magh. Some options:
- A recurring deposit timed to mature just before Dashain. Many banks offer these with small monthly amounts, and the money is out of sight.
- A separate savings account with no card and no wallet linked to it.
- A standing instruction on payday, so the transfer happens before you see the money.
Don't put a festival fund in shares. You need this money on a fixed date, and the market doesn't care about your calendar. That's the core idea from my post on saving vs investing.
Step 4: For this Tihar, set a limit now
If Dashain already stretched you, Tihar is where you can stop it getting worse.
- Pick one number for Tihar in total and load it into your wallet, the way I described in the wallet post.
- Skip festival loans and "easy EMI" offers on phones and appliances. A small monthly payment can hide a lot of interest, as I worked through in the EMI post.
- Separate gold from spending. If you're buying gold on Dhanteras, decide in advance whether it's jewellery or savings. My gold post explains why that matters.
- Watch the card games. Tihar tash with family is tradition. Losing a month's grocery money isn't.
If you already borrowed
Don't panic, and don't let it roll on. List what you owe, pay off the most expensive debt first (usually a credit card or an informal loan), and put the festival allowance towards it if it hasn't been spent yet. Then start next year's fund in Mangsir, even if it's small, so this is the last year it happens.
A quick checklist
- Add up this year's festival spending from your statements
- Divide by 12 and add it to your monthly budget
- Open a recurring deposit or separate account for it
- Set one total limit for Tihar and stick to it
- Pay off any festival borrowing, starting with the most expensive
General information, not personal financial advice. Figures are illustrative and rounded. Deposit terms vary by bank, so check before you open one. Have a question? Leave it in the comments.
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