Learn how to avoid overspending during the last quarter of the financial year

Offers, discounts, sales and more! They’re everywhere as one year ends and another one begins. And if you have a tendency to overspend or buy products impulsively, this time of the year can be quite hard on your finances because the temptation to spend is practically everywhere.

What can you do to avoid overspending? Let’s find out.

1. Set a spending budget

Although it may seem contradictory to the end goal of cutting expenses, setting a spending budget can actually make it easier to achieve this goal. Draw up a quick budget, compare your income with your everyday essential spending and see how much you can afford to spend on holiday shopping this year. Ideally, it would be a smart idea to spend a small percentage of your savings.

For instance, if you earn ₹50,000 during the month and spend ₹22,000 on all your essential expenses, you have around ₹28,000 left to save and spend on discretionary costs. So, you could set aside around 30% of this sum (i.e. ₹8,400) for your expenses this holiday season. 

2. Prepare a shopping list and stick to it

Another excellent idea to limit overspending during this period is to have a concrete shopping list in place. Write down the names of all the people for whom you are planning to buy gifts and presents, and set a budget for each of them.

Alternatively, you can also assign specific items or gifts for each of them, so there’s more clarity in how much you plan to spend. Knowing exactly what you need to purchase will make it easier for you to avoid impulsive shopping because you don’t need to spend time searching for various products or services.

3. Choose the right offers

During the holiday shopping season, you’ll find many attractive deals and discounts both online and offline. It can be easy to give into the temptation to spend more than you need to just to take advantage of the offers available in your favourite stores. That said, the ideal course of action would be to refrain from spending just for the sake of a deal or a discount.

However, if that’s not easy, it may be a better idea to choose the right offers instead. Check if there are any offers on the products or services that you anyway plan to buy. This way, you can get your holiday shopping done and get some nice discounts in the process.

4. Focus on saving rather than spending

One of the most underrated ways to avoid overspending is to do the exact opposite — and diligently focus on saving instead. Set savings goals this holiday season and reward yourself in small, non-monetary ways for achieving predetermined milestones.

For instance, say you set the target of saving ₹5,000 extra this month. If you do hit this milestone, reward yourself with an extra day off from work or a day spent honing your favourite hobby. This will bring you a sense of fulfilment and also help you save instead of spending.

5. Stay off the grid if you can

Another excellent idea that can help you avoid overspending this holiday season is to stay off the grid. If you’re taking a few days off from work, disconnect from the internet and spend quality time with your family. Going off the grid keeps you away from the overdose of information regarding holiday offers and deals — all of which could make you spend impulsively.

Additionally, disconnecting for a while will also help you take stock of how much you tend to spend in general. You can work on identifying your vulnerabilities with regard to overspending and take some measures to avoid this poor financial habit.

Conclusion

These practical and actionable tips can help you curtail your spending during the holiday season. As always, remember that spending by itself isn’t the issue. It’s overspending that becomes the problem. So, have an action plan in place and try to stick to the budget you’ve set for yourself. And in case there are any slip-ups, you can always forgive yourself and do better next month. After all, that’s how habits are built.