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TACKLING FESTIVE DEBT HANGOVER

- KARTHIK JEROME

During the festive season, many households tend to go on a spending binge, fuelled not by savings but debt. When the festivities end, the reality of repayment hits home. If your finances, too, have got strained, here’s a structured plan to help you regain financial equilibrium.

Why people overspend

Festivals bring about heightened social interaction, prompting people to spend more on clothes, gifts, and parties to maintain their social stature. Social and family expectations add to the pressure to spend.

Positive emotions lead to indulgent behaviour and impulse purchases. “More free time during this period also results in higher discretionary spending on eating out and shopping,” says Vishal Dhawan, founder & chief executive officer (CEO), Plan Ahead Wealth Advisors.

“Annual bonuses increase disposable income, encouraging higher spending,” adds Adhil Shetty, CEO, BankBazaar.com.

‘Tempting discounts from merchants and lenders worsen the strain on personal finances. Zero-cost EMIs and buy-now-pay-later (BNPL) financing schemes make it easier to spend. “Advertisements announcing attractive offers create the fear of missing out (FOMO),” says Deepesh Raghaw, Sebi-registered investment advisor (RIA).