5 smart ways to avoid overspending this festive season


Overspending during the holiday season is inevitable. Offline merchants and online merchants offer deep discounts and price reductions on almost all items. Party shopping often leads to overspending. Such purchases, which are often impulsive in nature, can potentially disrupt you financially in the short term and can also prove dangerous to your financial planning. Therefore, you must draw the line to reduce your spending and careful steps must be taken to have a stress-free shopping experience within your spending limits.

Here are some tips you might find useful to avoid overspending this festive season.

1. Control emotion-driven purchases

Human psychology plays a vital role when shopping. Shopping driven by emotions and fear of missing out on the latest trends can affect your finances. So above all else, have some control over your impulsive approach to buying things immediately. It may be difficult, but it will help you get rid of your financial stress. Stay disciplined without disrupting daily spending.

2. Spend within your budget

If you’re buying multiple things, it’s a good idea to prepare a budget before you start spending money. Knowing your ability to spend by considering your current and future cash flow, savings, and monthly expenses gives you a clear picture of your budget and how much you can exceed it. Stick to your budget by adjusting all your upcoming holiday purchases to it.

Read also: Where to invest this Diwali to illuminate your finances

Adhil Shetty, CEO of Bankbazaar.com, explains, “It’s completely normal to go over your budget when shopping for Diwali celebrations. Make sure that after the holiday season, your expenses won’t impact your ability to meet primary expenses like rent or IMEs. Even if you’ve overspent, especially on your credit card, don’t waste time developing a repayment plan. See how you could save more in the months ahead to recover from your unforeseen splurges.

3. Plan your shopping in advance

Festivals come every year. Therefore, you have plenty of time to plan your purchases in advance. Manage your cash flow throughout the year while regularly allocating a certain amount to festive purchases to overcome the problem of overspending. For example, if you need, say, Rs 1 lakh to spend, you can plan it accordingly by accumulating the sum through monthly allowances. Just under Rs 10,000 in monthly savings would suffice. You can either start a short-term recurring deposit (RD) with Rs 10,000 per month or put the same in a debt or balanced fund. Any interest or returns accrued during the term will be an additional bonus that can be used during festive periods.

4. Prioritize your needs

Prioritizing what you need can help you manage your party shopping. The things you need the most that can no longer be avoided should be at the top of your shopping list. Non-essential purchases can wait. It’s worth remembering that every time we can’t have the best of both worlds. A little adjustment is prudent.

5. No-cost financing options

Sometimes you run out of money, but some important purchases can’t wait. It can happen to anyone and it’s normal. In such a situation, you can try no-fee financial options like no-fee EMIs on your credit cards or programs like Buy Now Pay Later. Opting for such financial products might not protect you from overspending, but it would actually delay the payment of the current purchase. So, you can easily repay the amount in installments over the next two months. This will help keep you from being overloaded during the festive months and keep your financial stress at bay.

Disciplined financial behavior is of paramount importance. You have to know the difference between needs and wants. When things are planned well in advance, effective budgeting is done, and most importantly, when you know your financial situation by understanding short-term and medium-term cash flow situations, you become aware of your spending habits. Regular cash flow analysis and ongoing review of budgeting exercises tend to help control overspending.


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