It's raining offers: Keep track of finances before you splurge

While you maybe excited to buy your favourite products at reasonable or discounted rates, this festive season, avoid overspending

Oct 07, 2014 03:10 IST India Infoline News Service Mahalakshmi Hariharan |

The festive season is here and most of us are on a shopping spree. Some of us may be looking at redecorating or renovating our homes, shopping for clothes, mobile phones and other accessories or even buying gifts for family and friends. While it is exciting to have all your favourite products at reasonable or discounted rates, it is important to keep track of your finances while spending.
 
Below are some tips to follow:
 
Avoid overspending: Use your money judiciously. Most of us have already thought about savings and investments for this financial year. However, you may spoil it all if you overdo your purchases, thereby increasing expenses. Most companies will also come up with bonuses and incentives during Diwali.  This money should be used diligently. Instead of spending it all on making purchases, you could instead use it to prepay your outstanding loans. In case you are not burdened with any kind of loans, you could look at investing part of your bonus into suitable investment products and spend the remaining sum.
 
Compare products: Do your spade work. At this point of time, shopkeepers and websites are offering a variety of products at competitive rates. Try and get the best prices online, while shopping for products like mobile phones and books. Check out various deals, compare prices and then buy clothes, home appliances and other items.
 
Save in advance: If you are a shopaholic, and love to splurge, try and save at least a month in advance. Every time you receive your paycheck, divide it into separate accounts, namely monthly expenses, investments/savings and shopping. Don’t touch the third account.
 
Shop wisely: You may be tempted to buy all those products with attractive deals and offers, but stop. You will only waste your hard earned money if you buy impulsively. Instead make a list and stick to it. This will help you to keep a check on only the things that you need and your money. At the same time, prepare a budget. You could get carried away with those discounts, low interest rates offered by banks and retail outlets, but preparing a budget will help you to keep a check on your spending. Also, before buying a product, research well and then go ahead.
 
Stick to cash: Pay by cash wherever you can, instead of swiping your credit cash. There is a tendency to spend more when you swipe your card, thereby purchasing more than what you need. Since credit cards have higher limits than what you need and they also give you the option to repay later, you may want to use your card more often. However, remember that this comes with a cost. In case you delay your repayment cycle; there will be a high penalty on it. Hence, be cautious. Meanwhile, avoid buying products on equated monthly installments as you may end up paying a higher sum. On the face of it, the schemes may look attractive and easy on your wallet, but there could be additional costs that could pinch you later.

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