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Diwali is here and your joy in the celebrations would be great. Traditional Diwali celebrations have many disguises: the joy of giving and offering sweets, clothing, electronics, jewelry, etc. However, these gifts also come with costs and added stress on your finances.
There is no alternative to Diwali gifts and shopping, but you can still make wise decisions on how to spend your money to avoid a bad taste in your mouth once the celebrations are over.
Create a holiday budget to avoid overspending
One of the biggest causes of financial disruption after Diwali is overspending, especially on things you don’t need. “To avoid this, a budget and holiday background is a must,” says Anup Bansal, a chief business officer at Scripbox.
He suggests separating out all the items you want to buy and then prioritizing them. Allocate more money to priority items and less money to items as you go down the priority ladder. You can also save money by spending it wisely, e.g. B. taking advantage of wholesale opportunities for household items, sweets, etc., or special seasonal offers.
Also, keep an eye on your budget to avoid deviating from it.
Say yes to holiday discounts, but don’t be fooled by illusory offers
Banks and fintech companies are happy to offer you money to borrow. That doesn’t mean you should only get blind loans.
In addition, online and offline stores often market exceptional celebration sales with lucrative free EMI programs and Buy Now Pay Later (BNPL) options.
Courtesy EMI programs are loan offers in which the purchaser of a product or service simply pays the selling price of the product in equal installments. If you choose to participate in the “Free EMI” programs, depending on the product and offer, you may not receive part of the advance rebate associated with it when purchased at retail stores.
A BNPL device is a personal loan granted by a fintech. There are a few e-commerce giants and fintech lending companies like Amazon Pay Later, Flipkart Pay Later, LazyPay, Simpl, ZestMoney, etc. that allow consumers to pay later while shopping. All purchases during a billing period are totaled, which you can pay later.
“Some deals can be wishful thinking because retailers often jack up the price and offer discounts,” says Bansal.
“If you plan to buy a large quantity during the festive sales, compare prices between outlets to see if they offer an initial discount and if the total cost is lower than on e-commerce sites,” says Harshil Morjaria, financial planner Certified by ValueCurve Financial. Solutions, he said.
Tips for a Financially Smart Diwali
Say NO to excessive use of credit cards
Credit cards are a blessing only when used wisely. It offers you a much wider selection of rewards like cash back, airline miles, reward points, and facilities like special discounts.
“But if you go over the credit card limit, you can fall into a debt trap,” says Morjaria.
Credit cards incur interest charges when the outstanding balance is converted to EMI. There are also late payment fees for late-payments and convenience fees for partial payment of arrears.
“Today, credit cards give you the convenience of simple EMI, but they increase your debt,” warns Bansal. After the holiday season is over, all you have to do is pay the EMI and/or interest. “Overspending and simple near-death experiences take a toll on your post-Diwali budget. So avoid it,” he says.
Do your calculations to calculate the benefits of the offer
Most banks and e-commerce sites have launched debit/credit card cashback offers to capitalize on the holiday spirit. These deals are mostly offered in association with specific brands or department stores. “Customers looking to buy appliances, clothing, home and kitchen items, furniture, and electronics can bundle these deals into cards for maximum value,” says Raj Khosla, founder of MyMoneyMantra.
Banks/e-commerce companies may get a commission on these sales, but remember you’re spending your hard-earned money. “Offers like gift certificates or Fast Track Rewards points will probably entice you to spend more during the holiday season,” says Bansal. However, remember that your shopping budget should not be dictated by these offers.
Not spending Rs 1,000 is a real saving than saving Rs 1,000 on a Rs 2,000 purchase.
Choose to save and invest
During spending season, you may also incur expenses that can help you increase your wealth. For example, you can buy assets like gold or silver; It is also traditional to buy such assets in Dhanteras.
Ultimately, they are investments because their value tends to increase over time. Alternatively, invest in stocks this holiday season. If you spend your investments this year, you may be able to use the proceeds from them to buy gifts for years to come—think long-term.