Diwali, the festival of lights, is just around the corner. Shoppers are gearing up to splurge on gifts, decorations and essentials. But before you embark on your shopping spree, arm yourself with these savvy hacks to make the most of your budget.
Create a budget to avoid overspending
Unplanned purchases during Diwali can significantly disrupt one's finances. To avoid that, having a festival budget and/or fund are musts.
To manage your Diwali expenses effectively, start by categorising your desired purchases and prioritising them based on importance. Allocate your spending money accordingly, assigning more funds to essential items and reducing allocations as you move down the priority list. Additionally, maximise your savings by spending prudently—take advantage of bulk-buying opportunities for household essentials, sweets, and other items, and leverage special seasonal discounts. Finally, maintain a close track of your expenses to ensure you stay within your budget and avoid unnecessary deviations.
Use cashbacks apps to maximise savings
To amp up your savings during the season, consider tapping cashback platforms. These offer substantial discounts on online purchases, allowing you to earn cashback rewards on your shopping sprees. “Simply research and select a cashback platform that caters to your preferred online stores,” says Rohan Bhargava, co-founder of CashKaro and EarnKaro, a cashback and coupons app. By doing so, you'll accumulate cashback points on your purchases, which can be redeemed for future shopping or conveniently transferred to your bank account, he adds.
Compare prices across platforms
To ensure you're getting the best possible deal, don't settle for the first price you see. Actively compare prices across various online websites such as Amazon, Flipkart, Myntra, BigBasket, Zepto, etc. “Additionally, utilising price tracking tools can help you stay informed about price fluctuations and identify the most advantageous deals,” says Bhargava. By conducting thorough price comparisons, you can make informed decisions and maximise your savings.
Also read | Diwali house purchase: Here's how a higher credit score can help you get cheaper loans
Don't get duped: Verify discounts
Beware of deceptive discount tactics employed by some e-commerce sites. These platforms artificially inflate prices only to offer seemingly massive discounts later. However, the actual price may be similar to what it was three months prior. To avoid falling prey, do your research before making a purchase. Verify the authenticity of the discount by tracking prices beforehand. Make informed purchasing decisions and avoid false bargains.
Take advantage of bank offers
Many banks collaborate with online retailers to offer exclusive discounts and cashback incentives to their cardholders. “To maximise your savings, check with your bank or online shopping-specific companies that promote shopping cards to see if they have any current promotions or partnerships that can offer cashback or higher rewards,” says Bhargava. For instance, Amazon has partnered with ICICI Bank, Axis Bank, IDFC First Bank, BOBCARD and HSBC, and offers cashback points on using credit or debit cards issued by these banks for transactions.
While credit cards offer enticing rewards like cashback, air miles and discounts, their benefits are only realised when used responsibly. According to Harshil Morjaria, a certified financial planner at ValueCurve Financial Solutions, exceeding the credit limit can lead to a debt trap.
Credit cards come with interest charges on outstanding balances converted to EMIs, late-payment fees and convenience fees for partial payments. The convenience of easy EMIs may be appealing, but it can increase debt. Once the festive season ends, cardholders are left with the burden of EMIs and interest payments, disrupting post-Diwali budgets.
To avoid financial strain, it's crucial to use credit cards judiciously and avoid overspending.
Also read | Festive shopping: 7 tips to make the best of 'handsome' offers
Stay away from BNPL and no-cost EMI schemes
As banks and fintech firms push loan offers, remember to borrow wisely. Festive sales often feature enticing no-cost EMI and buy now, pay later (BNPL) options, but understand the fine print.
No-cost EMI schemes spread the product's price over instalments, potentially sacrificing upfront discounts. BNPL plans, offered by companies like Amazon Pay Later, Flipkart Pay Later, Simpl, etc., are essentially personal loans that accumulate purchases made during a billing cycle, allowing payment at a later date.
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