How to spend wisely during festive season to avoid regrets later | Simply Save

Mega festive season sales have kicked off across offline retail chains and stores in India and also on e-commerce marketplaces.

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It’s raining offers and discounts and it’s difficult not to give into the temptation to buy the latest smartphone or an advanced appliance for your home.

To add to this, online marketplaces as also physical retail outlets promise to make it easier for you to buy the products you desire by rolling out schemes such as zero-cost EMI, buy-now-pay-later (BNPL) and EMIs on credit cards.

However, it is wise to resist the temptation instead of stretching your budgets. If you must make a big-ticket purchase, it is best to plan over a period of time – be it furniture and sophisticated appliances for your house or a foreign holiday.

Also Read | Early trends predict strong festive season sale for e-commerce companies

To know more about the mistakes that people tend to make while shopping during festive seasons, Moneycontrol spoke to financial planner Pankaj Mathpal, Founder, Optima Money Managers.

Here are a few important points that Mathpal highlighted:

-While festivals bring cheer, it is important to not go overboard in spending during the season. Adhere to your budget and spending plan. Giving into  temptations now could lead to regrets later.

-Several times, offers and attractive discount schemes are not genuine. Prices are inflated and a ‘discount’ is offered. People tend to fall prey to such gimmicks instead doing thorough homework.

-Many end up spending more than they ought to and buying things that they might not necessarily need. It is not easy to resist the urge to buy high-end gadgets or appliances, given the plethora of sale offers, discounts on credit cards and zero-cost EMIs being promoted by e-commerce companies.

-Ideally, you should not borrow to fund discretionary expenses such as upgrading premium gadgets or appliances. You should stick to your budget.

-It is easy to opt for, say, a buy-now-pay-later (BNPL) scheme to purchase a high-end television set that is beyond your budget at present. However, remember that even BNPL is essentially a loan.

-The e-commerce or offline retail players tie-up with financial institutions and the accounts are settled by the lender. However, the loan will be disbursed to you – the buyer-borrower. Though the interest is not paid by you but the brand, the responsibility to clearing this loan on time rests with you.

-Any delay due to lack of repayment wherewithal could push you into a debt trap. Credit information companies, too, will take note of such delays. This will bring down your credit score, affecting any future loan applications adversely.

-The right approach to making big-ticket purchases is to plan in advance. Festive season starts in the second half of the calendar year. So, you should start setting aside funds every month towards achieving this goal from January 1.

-This is also applicable to vacations. Plan ahead for domestic or foreign holidays. Not only will this ensure cheaper flight or hotel deals as prices tend to shoot up during holiday season, but also put lesser burden on your finances.