The festive season is usually the time when people ramp up their discretionary expenses. From new clothes, gifts and electronic appliances to furniture, automobiles and home renovations, this is the time of the year when people like to indulge themselves. However, this time around when the coveted celebrations will take place under the shadow of the Covid-19 pandemic, things could be different for some of us who are uncertain about their financial future as they might find it difficult to loosen their purse strings like in years gone by.

Special budget for festive spends
Having a special budget can help you to estimate your spending threshold during the festive season. List all the expenses such as apparels, appliances, gifts, home decoration, etc., and organise them from top to bottom as per their priorities. If your budget is not adequate to meet all the expenses, you may remove some of the low-priority expenses from your list. Plan your expenses based on your budget, like if you want to buy an Ultra High Definition TV or a smartphone, try to find out which particular model would fit your budget and if there are any discounts available on it.

The idea should be to save as much as you can on your favourite purchases so that you can accommodate even your low-priority expenses without exceeding your spending threshold. This planning should ideally not be a last-minute exercise. Set up a special fund in advance and allocate savings or channelise investment returns every month to build the fund and reduce excessive financial stress during the festive season.

Spending via credit and debit cards
The festive season is also the time when most retail stores and e-commerce websites come up with shopping deals. Firstly, many e-commerce websites organise big shopping festivals where you can avail special discounts on your favourite purchases. On top of that, your credit or debit card may qualify for additional deals and discounts. For example, you may find that your preferred smartphone worth Rs 50,000 is available for Rs 40,000 if you buy it during the big shopping bonanza organised by your preferred e-commerce website. You may save another Rs 5000 if you buy it through your credit or debit card and an additional Rs 5,000 if you exchange it for your existing smartphone. All these deals could ensure you get this smartphone for just Rs 30,000, i.e., at a 40% discount.

Secondly, if your existing credit or debit card doesn’t qualify for additional discounts, check whether your credit card reward points can sweeten the deal or not. The reward points accumulated on your credit card throughout the year can give you additional cashback on your total outstanding dues or get you merchandise for free on redeeming your reward points that you would have to purchase otherwise.

Thirdly, many credit cards also offer no-cost EMIs which can convert your big-ticket purchases to affordable instalments. So, check whether your credit card offers this facility on your planned festive expenses. However, ensure the new EMIs don’t add excessive burden to your monthly budget for credit card expenses and always clear your total outstanding in full within the interest-free deadline every month to avoid paying interest charges and late payment penalties.

As such, a detailed plan and a savvy approach can help you save a lot more on your preferred festive spends. Also, ensure you have a clear repayment plan which will not disturb your financial health if you plan to take a loan to fund your festive spends.

The writer is CEO, BankBazaar.com