4 useful tips to avoid overspending this festive season

The last one and a half years have been difficult with the pandemic and related challenges. Everyone has their hopes pinned on the upcoming festivals to bring respite from the gloom. People are looking forward to the festive season sales to shop for Eid-e-Milad, Dussehra, Diwali and Christmas.

While the festive season presents a great opportunity to treat yourself and your loved one with goodies, a little caution can be helpful. The convenience of online shopping, wide variety of choices and attractive deals often make it easy to get tempted and go overboard with our purchases. However, once the festive season has passed, you may be left with unnecessary debt, fewer savings and misalignment of financial goals. It then affects emotional well-being and may even bring disharmony within relationships.

Here are some tips to help you resist the impulse of overspending during the festive season.

Fix a budget and stick to it

The endless opportunities to splurge and seemingly tempting deals during the festive season make it easier to go off track. One way to ensure you don’t risk your financial health is to fix a budget for your festive shopping and stick to it. Start by estimating the amount you want to spend on different categories like gifts, travel, parties, decorations, etc.

Be a smart spender

Some strategic planning will make it easier to spend within your festive budget. Once you’ve mapped the various expenses you expect, identify the unnecessary ones that you can cut back on. Shop smart by comparing discounts and deals. Consider renting or reusing decor items. While gifts are a great way to show you care for your loved ones, we should realize that the gesture is more important than how expensive the gift is.

Watch out for retail tricks

Retailers have several tricks up their sleeves to make customers spend more. Loyalty cards, cashback opportunities, decoy pricing, deals and discounts are some of the incentives to get you to spend on things you don’t need. Be aware of these tricks to avoid impulse purchases. Some of the ways you can do this are by turning off online shopping notifications and unsubscribing from marketing mailers. Avoid adding items to your wish list or shopping carts to buy later. Take a moment to consider whether you really need something, no matter how much the discount.

Invest first, spend later

Make sure to save and invest a portion of your money before shopping for the festive season. If you get a festive bonus, allocate some of it for savings or investment rather than spending it all. You can also replace material gifts with acts for a sound financial future. For example, start a SIP in a mutual fund scheme for your spouse / children and attach a goal to it. The goal could be higher education for the children or financial security of the spouse. When you invest with a goal it is likely that you stay focused in achieving it and not giving in to temptations to overspend.

While festivals are a time to celebrate, it will be more joyous if we avoid overindulgence and build a corpus for better financial health in future.

Courtesy : HDFC Mutual Fund