Money detox: Take this 7-day challenge to reset financial habits after Diwali indulgence

Compile a comprehensive list of outstanding EMIs, credit card dues, and loans, then prioritize payoffs starting with the highest interest rates.

The lights have dimmed and Diwali festivities are winding down. Let us be honest the festival of lights can be draining, physically and financially. Between buying gifts and impulsive purchases, budget is overshot and bank balance shrinks.

Just like a health cleanse after overindulgence, finances, too, deserve a reset.

Take this 7-day money detox challenge, a simple plan to develop healthy financial habits, and get your finances back on track.

Day 1: Financial fast

Kick off with a complete pause on non-essential spending for 24 hours while meticulously tracking every outgoing rupee. Use a notebook or an app to log essentials like groceries or transport.

"Gaining awareness of the money that goes out is the first step to regaining control over it," said Mukesh Pandey, director, Rupyaa Paisa, a financial advisory firm. By day's end, you'll likely spot patterns such as how small daily leaks add up, setting the tone for conscious choices ahead.

Day 2: Expense audit

Dive into your recent Diwali expenditures by categorising them into "needs", "wants" and "regrets." For instance, sweets and diyas for the puja might fall under needs, while a trendy outfit for parties could be a want and that overpriced gadget bought on impulse might be a "regret".

Review bank statements or receipts to uncover emotional triggers such as stress-buying during family gatherings. This introspection reveals habits rooted in festivity-driven impulses, empowering you to avoid similar pitfalls in future.

Day 3: Auto-save setup

“Start saving automatically by moving 10-20 percent of your monthly income into diversified equity mutual funds through systematic investment plans (SIPs),” said Pandey. For instance, if your salary is Rs 50,000, set up an auto-debit for Rs 5,000-10,000 right after payday.

Tools like bank apps make this seamless, ensuring investment happen without relying on willpower, which often falters post-festive fatigue.

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Day 4: Subscription scrub

Scour your accounts for unused subscriptions — be it OTT platforms, gym memberships, or niche apps —and cancel them. Consider that a Rs 499 monthly streaming service you barely use amounts to over Rs 6,000 annually, money better redirected toward debt repayment or investments. This step frees up cash flow and eliminates passive drains on your budget.

Day 5: Debt detox

Compile a comprehensive list of outstanding EMIs, credit card dues, and loans, then prioritise payoffs starting with the highest interest rates such as credit cards at 3-4 percent monthly. For example, if you have a Rs 20,000 card bill at 40 percent annual interest alongside a low-interest home loan, tackle the card first to minimise compounding costs. Avoid balance transfers that might incur fees.

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Day 6: Goal reset

Reassess your financial objectives for the upcoming quarter, aligning them with current realities. “Whether building an emergency fund equivalent to three months' expenses, planning a modest holiday, or boosting investments in mutual funds, adjust your budget to support these,” Pandey said. If Diwali spending derailed your emergency stash, commit to replenishing it gradually.

Day 7: Reward mindfully

Celebrate your progress with a thoughtful reward that doesn't undo your efforts — opt for an investment over splurging. Treat yourself to contributing to a fixed deposit or investing in mutual funds or gold funds, ensuring it's guilt-free and forward-looking.

Conclusion

Remember that this detox isn't a one-off; it's a foundation. As Pandey said, "A quick detox can instil long-term discipline. Never forget that financial fitness, like physical health, relies on constant practice." By committing to these steps, you'll emerge with stronger habits, ready for whatever festivities come next.