It's not the best time to splurge. But the offers are too tempting. With the festival season starting, it is hard to ignore the Rs 78,000 less offer on a Fiat car or Rs 10,000 off on an LED television.
There is peer pressure as well. With colleagues, family members, neighbours, children ... all buying a whole lot of new gadgets, it is quite difficult to resist the temptation. But, hold on to your horses.
Two things drive this need to spend. One, it is the festival season. So, everyone wants new clothes, personal accessories, phones and even televisions and cars. Two, the discounts are being offered by retailers looks like a steal.
In the rush to take advantage of these deals, it's quite common to overshoot one's budget and even buy things that may not be needed. Take Harish Roy who had visited a local mall to buy new clothes as part of his routine festival shopping. After doing his purchases, he walked in the electronics section of the mall just to take a look at the new television sets. After checking out a few models, he couldn't resist the "only for today" offer of an LED television available on exchange for his existing television set, which was not even two years' old and in good running condition. He left the mall exceeding his budget and buying something which he already had. On the other hand, if Harish would have planned his festival expenses beforehand he would not have spent the additional Rs 20,000 which he spent on the television.
Today, most things are bought on impulse and due to decent bank balances; it's very easy to buy something expensive even when a similar product having the same utility may be available for a lower price. As long as one can afford the financial consequences of being a victim of the shopping binge, it doesn't matter. But it may matter a lot for those who have financial responsibilities at home; EMI's to be paid, etc. By shopping beyond their means, they can even get into serious trouble.
Take the case of Prashant Sinha, who was earning a very good salary but was able to save a fraction of his salary due to his high expenses which also included home loan EMI's. Having gone shopping for replacing his old mobile phone, Prashant not only bought an expensive phone but also purchased the latest tablet pc which some of his office colleagues had also bought. It was easy for Prashant to purchase the gadgets since he used his credit card. The problem started when he was not able to make the payment in the following month on the due date and then a cycle of interest and penalty ensured that he had accumulated a huge credit card debt.
How do we ensure that we don't buy things that we have like Harish or fall into the debt trap like Prashant?
Following the above will ensure a celebration during this festival season.