While discounts can help save money if you are organised and careful, there is a high risk of making mistakes such as spending more than you planned and getting bought into deals for things that you don’t really need. We spoke to experts to find out what buyers should be wary of during festive sales.
Don’t fall for flashy discounts
Customers often fall prey to flashy discount sales. They often end up buying things of poor quality (on discount) or things in the name of festivals and thus an occasion to spend. Very often people buy things they do not need.
Stick to your buying list
The promotional pricing leads to making people over-spend. Going beyond what one can afford is a gross financial error. Just like overeating may lead to health issues, if not managed properly, overspending can severely impact one’s finances and credit profile. Overspending could happen by utilizing the credit limit on cards or taking a loan. In both cases, the individual will have to pay interest and the monthly repayment would impact the cash availability. Also, higher credit utilization does impact the credit score, limiting one’s chance of having access to seamless availability of loans in the future, when they might actually need it.
Plan your spends in advance
The human mind loves rewards, so when it comes in the form of discounts during the festive season, people get excited and line up for it. Most people will buy into a product if there is a discount. It is because human beings are not rational.
Add to this the abysmal level of financial literacy and the reward system in one’s brain is ready to get hyper active with the words like free, discounts and so on.
The trend is here to stay, but as customers two things can hold you in good stead. One is to earmark the budget in advance and not overstep it no matter the temptation; this will force you to prioritize. The second is to plan in advance the things you will buy. This helps because when you plan ahead, you know exactly what you want to buy and are less likely to give into fancy advertisements.
Don’t get driven by best deal