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Top tips to avoid overspending online this Diwali

Updated: Mar 21

With the ongoing festive season, the online Diwali sale offers are being frequently promoted by big e-commerce giants like Flipkart, Amazon and Snapdeal. As per media reports, the festive season of Diwali accounts for a significant 30-40 per cent of the sales of online retailers. As per Live Mint, Flipkart which announced its Big Billion Day sale from 2-6 October raked in sales of about Rs.3,000 crore. That is huge. This reflects how the online shopping mania has gripped the average Indian. Not just apparel, furnishing, footwear, jewellery but Indians today are also comfortable buying LED sets, furniture, refrigerators, etc., online.

However, this profusion of choices and the hefty discounts have turned people into online voracious shoppers. Call it instant gratification, peer pressure, show off on social media, the convenience of online shopping is gradually turning into a habit, a dangerous one for many. An individual may be addicted to online shopping if he/she:

  1. buys an item to avail a huge 70-80 per cent discount but do not really require

  2. browses shopping portals and apps every day to check offers and saves in shop cart.

  3. spends on non-essential items every month

  4. rolls credit card bill every month

  5. spends beyond budget but not aware

Though it is easy to get carried away in the festive season, going overboard on mindless purchases has its repercussions on personal finances and the impact is felt much later. Here are a few useful tips to stop overspending online.

  1. Make a list: Firstly, make a list of items that you really need. When you go shopping online, strictly stick to the list. Avoid the impulse of looking at hefty offers on items that you do not really require and may unnecessarily clutter your home. This will ensure that all your purchases are driven by necessity rather than just bargains.

  2. Prepare a budget: Plan a budget to spend on festival related items including clothes, footwear, household items, decoration items, gifts for relatives, friends, etc. This would give you a rough idea on how much would be your outflow in the festive season. The festive budget will serve as a reminder of not going overboard, so try not to deviate from it too much.

  3. Clear outstanding dues on credit card first: Before you start your online festive shopping, clear your outstanding credit card dues, if any. This will help you to start with a clean slate instead of piling up additional debt. Clearing dues will also have a positive impact on your credit score. If your current savings are inadequate to clear credit card dues, then ensure to keep a tight leash on online spending.

  4. Reduce credit card limit: It is easy to get carried away and use credit card excessively during the festive season since it really doesn’t pinch when you swipe one! To avoid extreme usage, you can reduce your credit card limit before you plan your shopping. Another smart way is to switch to cash mode of payment. It would serve as a harsh reminder of how much you are spending.

  5. Invest first, spend later:While shopping is on the priority list during the festive season, allocate a portion of your savings to investments first. This could be in addition to the regular investments you do every month. You can also utilise a portion your Diwali bonus to make new investments. Gift your spouse or your child a fixed deposit or may be open a recurring deposit in their name or start a SIP in mutual fund. Just like majority people inevitably buy gold every Dhanteras, make investing a ritual too every year in Diwali. It is a good way to control your urge to spend more. The money spent less and also invested would give you a good feeling about your financial future.

  6. Control the buying impulse: Daily announcements of big bargains on your mobile apps could be very tempting. Turn off those notifications so that you do not feel the urge to look at them day in-day out and make that unnecessary impulse buy. Further, avoid adding items to your shopping cart list. You would be tracking offers on it daily and then eventually end up buying stuff at bargain prices but the ones you do not require.

Conclusion: Racking up huge credit card debt from frequent online shopping can do long term damage to your financial health. It could also derail some of your essential financial goals. So ensure to spend wisely in the festive season. Wishing all our readers a very Happy Diwali and a Prosperous New Year!

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