The festive shopping list starts innocently enough. Gifts for the family, something new for the house, perhaps a phone you have been meaning to replace. Then come the sale alerts, cashback offers and monthly instalments that make everything look more affordable.
Enjoying the season is part of the plan. The trouble starts when purchases leave you juggling bills long after the celebrations are over.
Dussehra offers a timely reason to leave a few financial mistakes behind. Better personal finance management can begin with small changes to how you spend, save and make decisions. Here are 12 financial habits worth reviewing this festive season.
Table of Contents
1. Spending without knowing your limit
“I’ll keep an eye on it” can feel like a budget until several small purchases land in the same month.
Start with rent, groceries, bills, repayments and other commitments. What remains tells you more about your festive spending capacity than the balance showing in your banking app.
Set separate limits for gifts, travel, clothes and celebrations. A notes app or a sheet of paper is enough. Compare actual spending with those limits as you go, rather than waiting for the month-end surprise.
SEBI identifies tracking income and expenses as part of budgeting and working towards financial goals.
2. Buying something because it is on sale
A discount can reduce the cost of a planned purchase. It can also persuade you to buy something you never intended to own.
Suppose an item drops from ₹5,000 to ₹3,500. If you already needed it and the price is competitive, the offer may be useful. If you had no use for it, ₹3,500 has still left your account.
For an unplanned purchase, consider leaving it in the cart until the next day. Use that pause to compare prices, think about how often you will use it and check your budget.
The figures shown are for illustrative purpose only
3. Saving only what is left at month-end
Money without an assigned purpose can easily find its way into another purchase. Saving whatever remains makes your progress unpredictable.
One approach is to set aside an affordable amount when income arrives, after accounting for essential bills and repayments. Keeping it separate from everyday spending makes it easier to track.
Choose an amount you can sustain. If an automatic transfer repeatedly forces you to borrow for essentials, the amount or timing needs a rethink.
4. Treating festive expenses as emergencies
Gifts, family visits and celebrations may be expensive, but many of these costs are foreseeable. Paying for them from an emergency fund leaves less available for an unexpected medical expense or an interruption in income.
A separate festive savings pot can help you prepare for next year. A planned budget of ₹24,000 spread over 12 months means setting aside ₹2,000 a month, before considering any interest.
Emergency savings serve a different purpose. Their size depends on essential expenses, dependants and income stability. Keep access to that money in mind when deciding where to hold it.
The figures shown are for illustrative purpose only
5. Looking at the EMI but ignoring the total cost
A small monthly instalment can make a purchase look affordable. Several instalments running together can put pressure on the same salary.
Before using an equated monthly instalment (EMI) or buy now, pay later (BNPL) facility, check the repayment period, total amount payable, fees and consequences of a missed payment.
For a “no-cost EMI”, check processing fees, applicable taxes and any difference from the upfront purchase price. Charges depend on the offer and lender. Official bank disclosures show that EMI transactions can carry processing fees and taxes.
Add the proposed instalment to your existing commitments before deciding. Credit approval alone does not establish affordability.
6. Paying only the minimum credit card amount
The minimum amount due is only a portion of your credit card bill. Paying it does not clear the remaining balance.
RBI warns that repeatedly making minimum payments can stretch repayment over months or years, with interest costs. An unpaid balance can also suspend the interest-free period.
Check the total amount due, payment date and card terms. If full repayment is difficult, review new spending and discuss repayment options with the issuer before adding more purchases to the balance.
7. Spending the whole bonus before giving it a purpose
A festive bonus can start getting spent before it reaches your account. Gifts, upgrades and outings may leave very little for other priorities.
Before shopping, consider how the money could be divided between celebrations, outstanding debt, emergency savings and financial goals.
Salary increases deserve a similar review. If recurring expenses rise as quickly as income, your capacity to save may barely change. Check what an upgrade would mean for your monthly commitments before making it permanent.
8. Waiting until you earn “enough” to start investing
It is easy to keep moving the starting line. After the next raise. After the next bonus. After life becomes less expensive.
Once essential expenses, debt obligations and emergency savings have been considered, an affordable starting amount may be more practical than waiting for a large surplus.
A Systematic Investment Plan (SIP) allows you to invest a fixed amount periodically in a mutual fund scheme. The scheme needs to suit your goal, investment period and ability to bear losses. Regular contributions do not remove the underlying investment risk.
Bajaj AMC’s SIP calculator lets you explore estimated outcomes using different monthly amounts, investment periods and assumed returns.
The calculator is an aid, not a prediction tool. It may provide only an indicative picture.
9. Investing without knowing what the money is for
“I want my money to grow” leaves a few useful details unanswered: how much you need, when you need it and how much uncertainty you can accept.
Money for next year’s fees has a different purpose from money for retirement decades away. A fall in value close to a payment deadline can disrupt your plans.
Give each goal an amount and a date. These details help you assess suitable options and track progress. SEBI’s goal-setting framework emphasises specific, measurable and time-bound objectives.
Bajaj AMC’s explainer on financial planning offers a starting point for connecting these goals with your wider finances.
10. Keeping long-term savings parked without a review
Keeping money accessible for bills and emergencies has a purpose. Leaving all your savings in one place for years without reviewing that purpose deserves another look.
Inflation reduces purchasing power. If savings grow more slowly than prices, they may buy less even as the balance increases.
Separate money needed soon from money intended for longer-term goals. Assess the latter against your investment period, risk tolerance, costs and access requirements. Avoid moving money into an investment merely because it seems “idle”, especially if you may need it soon.
11. Buying investments on tips and fear of missing out
Someone in the family group has a stock tip. A video promises unusually high returns. A friend has made money, and you feel late to the party.
None of these establishes whether the investment suits you. Check how the product works, its risks and costs, and the credentials of anyone offering investment advice.
SEBI identifies guaranteed-return promises, pressure to act quickly and unsolicited offers as warning signs of potential investment fraud.
Verify claims of registration through the relevant regulator. Someone else’s gains, or a product’s historical returns, are insufficient grounds for committing your money.
Past performance may or may not be sustained in future
12. Putting off the boring financial checks
Statements, renewals and account records rarely compete well with a festive sale. Ignoring them can leave you paying for unused services or relying on outdated information.
Set aside time to review subscriptions, upcoming bills, insurance cover, contact details and nomination records. Changes such as marriage, a new dependant or a different job may also call for a fresh look at your financial plan.
Keep relevant records organised so a trusted family member knows where to find them when needed. Keep passwords, PINs and OTPs private.
Make one change you can carry into next month
You do not need to fix all 12 habits at once. Pick the one causing the most difficulty and choose a specific change.
That could mean setting a gift budget, listing existing EMIs or arranging an affordable transfer into a separate savings pot. Give yourself a review date to check whether the change is working.
Thoughtful money management can leave room for celebrations while keeping the bills and goals that follow them in view.
FAQs
How can I improve my money habits if I have very little left to save?
Review essential expenses, repayments and irregular costs first. A tight budget is not always a discipline problem. If essentials absorb your income, reviewing costs, available support or opportunities to increase income may be more useful than imposing a fixed savings target.
How much of my salary should I save each month?
There is no percentage that fits everyone. Your saving capacity depends on take-home income, living costs, debt, dependants and goals. Choose an amount that leaves essential commitments covered and review it when your circumstances change.
Should I use emergency savings for festive shopping?
Planned festive shopping can be included in a separate budget. Using emergency savings reduces the buffer available for unexpected expenses. If your festive budget is short, revisiting the purchase list may help you preserve that buffer.
Are no-cost EMIs and BNPL always a bad choice?
Their suitability depends on the purchase, repayment capacity and terms. Check the total payable amount, fees, applicable taxes, due dates and late-payment consequences. Consider all existing instalments together before taking on another commitment.
Can I start a SIP with a small amount?
Many mutual fund schemes allow small periodic investments, although minimum amounts differ. Check the scheme’s requirements and assess its suitability for your goal, investment period and risk tolerance before starting.
