Perhaps one day there will come a time when Pakistanis will have an honest conversation about the culture of consumerism that has come to define religious holidays in the country. But until then, the vast majority of households will continue to feel the financial strain of keeping up appearances in front of relatives whom — let’s face it — we probably do not like very much.

Now, if you are expecting this column to teach you some hidden trick to manage to have a rambunctiously expensive Eid without hitting your pocket book, I have some bad news: I lied in the title. (I probably should not have, but it’s after iftar at the time of writing and I had to get your attention somehow.) The best I can do is tell you why the Eid cash crunch exists in the first place, as well as provide some tips to avoid any banking problems on or close to the day of Eid.

There are three related problems that occur around Eid: prices of almost everything rise, families consume more than they normally do and banks have a hard time making cash available to account holders. The first two of these problems have no real immediate solution (other than annoying the living daylights out of your family by making them consume less) and the third one can be mitigated with a little planning.

There is an old myth among most Pakistanis that prices tend to rise during Ramazan and Eid because of some mysterious group of conniving “hoarders” who artificially inflate prices to make outrageous profits at the ordinary consumer’s expense. There may be some hoarders, certainly, but economic research done by the State Bank of Pakistan suggests that much of the price increase is the result of an increase in demand.

According to a working paper by SBP economists, inflation in Shaban (the lunar month preceding Ramazan) averaged about 0.95pc (or 12pc on an annualised basis), compared to 0.7pc (or 8.7pc on an annualised basis) in Ramazan itself.

Plan ahead so you don’t have to worry about cash shortages at the last minute

The reason for this jump in Shaban is that people start buying their food for the holy month in the preceding month and since Pakistan has a lack of modern supply chains that can anticipate and prepare for a seasonal increase in demand, prices go up. Overall inflation rises because food is the single biggest component of inflation and the category the country as a whole spends the most money on.

Anecdotal evidence backs up the supply chain theory for the rise in prices. Companies such as Pepsi, Engro Foods and Unilever can keep prices stable or even offer Ramazan discounts because they are sophisticated businesses with modern supply chains that anticipate the rise in demand. (All those IBA and LUMS graduates filling up the junior ranks at these companies have their uses after all.)

In my brief stint as a consultant to the retail food sector in Karachi, I observed a doubling of demand at my clients’ businesses. Anyone who has seen an iftar anywhere in Pakistan does not need to ask why.

The point of me telling you all of this is not to deliver a lecture, but to make the following argument: the next time you go out shopping during Ramazan or Eid and find yourself shocked at the prices, remember that your insane increase in demand is part of the problem. I could tell you to eat less, but you and I both know that is not happening, so let’s not kid ourselves.

This leaves us with the final problem: getting your hands on actual cash during Eid season. This is a problem that many people are already aware of: it is unusually difficult to get cash out of ATMs during the season around Eid since many of the machines seem to be out of it.

The reason behind this is obvious: all those people spending large amounts of money in our depressingly cash-dependent economy means that there is a physical shortage of cash during Eid season. Banks have gotten better over the years at dealing with the problem and it has diminished considerably from at least the larger cities in the country. But it nonetheless does occasionally cause some problems.

Here are some ways to mitigate the issue. First, plan out exactly what you will be spending money on and try to move up as many purchases as possible to Ramazan or even earlier. This will reduce your need for cash. Secondly, if you must use an ATM on or close to Eid, try to use one close to office buildings or industrial areas: the banks may not like their individual customers, but they like to provide a higher quality of service to their corporate clients.

And lastly — and I cannot emphasise this point enough — stop using cash. We live in an age where moving money electronically has become extremely easy. Why cling to the riskiest form of transferring money? Sure, there are places where it is unavoidable. But debit cards and electronic money transfers are becoming more and more widely used. Whenever the option is available, use it. It is safer, more reliable and more efficient. And it will reduce the chances of you spending your Eid cursing at an inanimate ATM.

Published in Dawn, Sunday Magazine, July 27th, 2014