These days, money moves faster in terms of how we spend it, and how fast we can spend it! For countless Indians, today’s living is both convenient and stressful, with digital apps allowing you to easily shop, but traditional expectations demanding that you spend lavishly on weddings, festivals, and gifts. While the impact of technology combines with tradition, distinguishing thoughtful spending from emotional spending becomes convoluted. This article identifies our culture, broad lifestyle trends, and psychology to provide perspective on our spending habits, as well as strategies for reclaiming control over our spending habits.
#1 Impulsive Spending and the Influence of Social Norms
Imagine this: It is a typical Friday evening, and after winding up, you tell your friends, “Let’s go out for drinks”— continuous rounds of drinking and then ordering extensively from a food delivery app. The next day, while browsing your social media, you are caught up in a FOMO situation where you make a spontaneous plan to Goa. A few days later, you check your balance and wonder ‘where did all your money go?’
This situation might sound familiar. Financial choices today are often intertwined with our cultural values and social influences. In a culture where traditions are crucial, people usually make financial decisions influenced by their surroundings rather than in isolation. In most cultures, the influence of one’s traditions is deep-rooted, so decisions concerning money tend to be dictated by one’s environment. Whether it is the ‘need’ to throw lavish weddings or the ‘temptation’ of looking for deals online, many people get trapped in unfettered expenditure that can slowly undermine their spending health. Understanding the psychology behind these spending habits and behaviours can help us break free from the cycle.
#2 Big Fat Weddings, Bigger Financial Woes
In a country where the word marriage holds years of planning and is related to social status and emotions. Weddings are often driven more by societal pressure rather than personal financial readiness. A KPMG report estimates India’s wedding industry at over $50 billion, with many families dipping into long-term savings or taking on debt to fund these events.
Indian festivals are changing as essential reasons for socializing and celebrating. Unfortunately, a LocalCircles report states that 74% of families feel the strain of financial expectations during these periods, which is fuelled by rampant spending on discounts or gifts. This mindset can distract from the real essence of the celebrations and make some unwise financial decisions that make it difficult to budget and plan for more important things.
#3 The Comfort of Tradition – Gold, FDs, and Stagnant Wealth
Gold has been viewed as a symbol of security and status in India for generations. However, Indian households currently hold a staggering 25,000 tonnes of gold, far surpassing the holdings of central banks worldwide. For comparison, the United States’ gold reserves stand at 8,133 tonnes, followed by Germany with approximately 3,300 tonnes, and several other countries—including Italy, France, Russia, and China—hold much less.
While gold and fixed deposits (FDs) are often seen as the cornerstone of financial security, their long-term growth potential can vary. FDs, in particular, have struggled to keep pace with inflation in recent years, offering stable but relatively low returns compared to more dynamic options like equities or mutual funds. Gold, on the other hand, has proven its worth—especially in times of uncertainty—but relying too heavily on any single asset class can limit overall portfolio growth.
In fact, according to a recent report, 74% of respondents in India expressed concern about their financial situation, compared to just 50% globally. This heightened financial anxiety may explain why many prefer to hold onto traditional, low-risk assets like gold and FDs—seeking comfort over potential growth.
#4 The Rise of Easy Spending
The amount is debited from your account with a click of a button. Gone are the traditional days of counting cash and swiping endless cards. A simple tap or phone payment gets the job done. The Unified Payments Interface (UPI) saw a 13.6% increase in transaction volume in March 2025, reaching 18.30 billion transactions, illustrating how quickly digital payments have become a part of everyday life in India.
But there is a catch to this — earlier, we could physically hand over cash, but now spending is not tracked easily. Hitting the “buy now” button does not trigger the same emotional response as parting with money, making buying things conveniently easier. This trap is called the “click to spend trap,” which makes more quick purchases.
#5 Society, Status & the Rise of Lifestyle Upscaling in India
Consumers today are undergoing a significant shift from old generations who focused on saving each penny to today’s urban Indians (especially the younger demographics), who are living in the time of YOLO (you only live once) and FOMO (fear of missing out) mindsets. This shift highlights more spending habits on maintaining lifestyles and experiences.
Instead of waiting to “afford” a particular way of living, many youngsters want to finance their aspirations. This wave includes purchasing the latest smartphones through EMIs, using credit cards for vacations, and leasing high-end vehicles to meet societal expectations. A Deloitte report projects that discretionary spending in India will more than double by 2030, fuelled by young urbanites who see spending as a way to express themselves and gain social approval.
This trend of lifestyle enhancement extends beyond luxury items; it’s reflected in everyday decisions, such as upgrading from basic to premium streaming services, choosing gourmet coffee, or selecting upscale rental apartments. The trend of upscaling reflects rising incomes and heightened aspirations, emphasizing the critical importance of financial literacy. As people pursue more luxurious lifestyles, the distinction between genuine needs and mere wants can become blurred. This lack of clarity may lead to overspending, insufficient savings, and increased financial stress.
India’s consumption story is thrilling, but the risk of emotional spending can be a serious downside. Cultural traditions and easy online shopping significantly impact how we handle money. These influences are strong, but they can be changed. By becoming aware of them, we can develop better spending habits and work towards financial health.
It is time for a shift. Starting small also makes a big difference – budgeting the festival season spending to making the digital payments. Asking yourself, ‘Do I need this?’ can make a change. Creating a balanced spending cycle can help you plan better for your future.