The festive season means excitement, celebrations, indulgences, card parties, sweets, and of course tons and tons of shopping. Many people had started saving for their shopping spree months ago, and plan to splurge on gifts for themselves, their friends and families, and also on household appliances and lots more. In such a scenario, when it’s extremely easy to get carried away, we offer advice and suggest which five money mistakes you should steer clear of during the festive season. Avoid aimless shopping
You have a Sunday afternoon to kill, so what do you do? You head to the mall. And what you didn’t know that the mall is on sale! Hooray, right? Wrong. If you have nothing specific to purchase, or just headed to the mall or browsed through an online shopping website in search of a killer deal, you might end up spending more than you initially intended to. The best way to ensure that you are in control of your money, and the situation isn’t the other way around, is to make a shopping list. This gives you focus and manages to cut down any impulsive buying significantly. A list will also help you put an estimate on things you're about to buy and plan your purchases accordingly. And of course, once you have made your list, it is important to stick to it, come hell or high water.
Try not to spend too much of your Diwali bonus
Diwali is the time when most employers hand out bonuses to their employees. Try your best not to spend all of it on your shopping spree. Banks are offering easy equated monthly installments (EMIs), low interest rates, discounts, minimal paperwork, and more. Unless it is an emergency, resist the urge to borrow money to spend on your festive shopping. Create a budget for your festive shopping to avoid falling in future financial problems. Adding festive shopping as a goal in your financial planning list will ensure it is on the horizon and will also ensure that essential and valuable items make it onto your list, instead of cavalier spending.
Compare prices and do your research before you shop
If you have noticed, almost all shops, stores, outlets and eCommerce websites like Flipkart, Amazon, Indiatimes and Snapdeal are constantly competing with each other, and offering bigger sales each day. Always compare prices on large purchases, both online and offline before you buy anything. You could even use www.mysmartprice.com (for all products) and www.indiabookstore.net (for books). Comparing costs and doing your research will help you find the best deals.
Stop using your credit card for every single thing
It’s great that you have a credit card with a large spending limit, but try not to use it for your entire festive shopping spree. Credit cards charge a lot of interest on your outstanding dues. We tend to use our credit cards because they offer instant gratification and have higher spending limits, causing the illusion that you have much more money to spend that you actually do. It tends to pinch you more when you see a depleted bank account rather than get a high credit card bill the next month. Be cautious and mindful about when to your credit card and for how much. Remember, even if you buy stuff with your credit card on EMI, you will be paying interest on that.
Don’t just think of spending, save too
You might not want to think about boring things like investments and savings during the festive season, and while it might seem like a buzz-kill, it is as important as spending money is. Saving and investing your money seems like a good idea, especially because you have a surplus of cash at hand. You could use the money to pay off an existing credit card bill, pay an outstanding loan or even invest in suitable products. You could even do a half-and-half, where you spend some of the bonus and save the rest. Make investing your first priority and allocate funds to that before you do anything else. That way, you are automatically giving yourself a spending limit, and curbing unnecessary expenditure.
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