Five Tips On How To Avoid Overspending (Article)

1. Plan a budget        
2. Drawing up a budget can appear quite cumbersome. However, it will hurt you a lot less than paying off unwanted bills. So, allocate a realistic sum for festive shopping. Make your shopping list and then divide the total spend among the various items—clothes, shoes, gifts etc. Try not to spend on arbitrary goods, even if they are available at a discount. 

 

2. Assess your need

While making your shopping list, ensure you include only those things that you really need. Look for deals, for the goods on your shopping list, but be mindful of not splurging on impulse shopping, goaded by 'discounts'. During festive seasons, retailers come up with several seemingly interesting schemes to draw in customers. However, they might not always be in the customer's interest.

For instance, advertisements like '10% discount on gift shopping of more than Rs 3,000' hold a strong pull. But do you really need to spend Rs 3,000 for a Rs 300 discount, when you had allocated just Rs 1,500 towards gift spends? Is it a gain of Rs 300 or a loss of Rs 1,200? Question your buying decision—is the purchase of value? It will help you evaluate your buying decision. 
 

3. Make it a family affair

The allure of shopping, at times, can be too good to resist. So, if you can't control the urge to shop when it's raining discounts and 'sales' are aplenty, it is suggested you don't go for shopping alone. Involve your family. Take it along for shopping. And before you do that, discuss your shopping list with your family.
Your family is most likely to rein in your urge to spend by pointing out why, despite the discount, you really don't need another centrepiece, or a wall hanging. When you are making the shopping list, ask your family members to cross out what they think is unnecessary. Friends too can be of help in preventing you from turning into a shopaholic.
 

4. Wait it out

Allow the initial excitement around a discount/special offer to settle, before you make a purchase. Sit on the offer for a couple days and give that heady feeling some time to concretise. What seems irresistible at first sight, after a while, quite often, loses its lucre. So don't rush into buying things.
 

5. Opt for cash on delivery

Plastic money and Net banking are often a big reason why people overspend, say experts. The ease of making payment through cards and via the Net can blind one to the fact that he is losing his money. This is especially evident when making online purchases. With an avalanche of the hypnotic '50% off', 'up to 70% off' ads, there is little the shopper can do, particularly when all it takes to avail of them is just a plastic card.

Replace the card with actual fiat money, and the spell breaks. So, it is best to opt for cash on delivery when you order things online. The sight of parting with your money will deter you from ordering things you do not really need.   
**Source: ET Wealth (21^st Sept 2015)