Summary of this article
Festivals bring joy, but unchecked spending can lead to long-lasting financial strain. With mindful planning and discipline, it’s possible to celebrate without compromising financial health.
Delhi-based Deepti Verma’s heart sank when she opened her credit card statement in mid-January this year: Rs 87,000. The number glared back at her like an unwelcome guest who refused to leave. The festive season last year had been magical: new furniture, gold jewellery for her mother, gifts for every relative, lavish parties.
She wasn't alone. A recent study by the National Payments Corporation of India revealed that credit card spending spikes by nearly 35 per cent during the festive season, with 6 out of 10 cardholders carrying forward balances into the new year. Across India, millions repeat this cycle splurging during festivals, then spending months digging themselves out of debt. But here's what Deepti learnt the hard way: you don't need to choose between celebrating and financial sense. You just need to avoid a few critical traps.
Mistake #1: Treating Credit Cards Like Free Money
Credit cards aren't bonus income, they're expensive loans in disguise. She had swiped freely, thinking she'd "figure it out later." Later arrived with a vengeance. The interest alone would cost her Rs 15,000 if she only paid the minimum each month.
The Fix: Set a festival budget before the season begins. Use a debit card or cash for purchases. If you must use credit, ensure you can clear the full amount by the due date, not just the minimum payment.
"The festive season preys on our emotional spending triggers," says Sanjiv Bajaj, Joint Chairman and MD at BajajCapital. "The joy of giving and celebrating is beautiful, but it shouldn't come at the cost of your family's financial security for the next six months."
Mistake #2: Raiding Your Emergency Fund
Mumbai-based Neha dipped into her emergency corpus to buy a designer saree collection she'd been eyeing all year. Two months later, her son needed an emergency dental procedure. With no safety net left, she had to borrow from friends—an awkward, stressful experience that could've been avoided.
The Fix: Your emergency fund isn't for festivals, it's for genuine emergencies. Illness, job loss, urgent repairs. Keep it untouched. If you want to splurge, plan ahead and save separately for festivities.
Mistake #3: Falling For ‘Zero-Cost EMI’ Traps
That Rs 80,000 LED TV for ‘just Rs 6,667 monthly’ sounds tempting. But read the fine print. Often, the discount you'd get on cash payment disappears with EMI schemes. You're paying the full price, sometimes more, spread across months. Plus, you're committing future income to a past purchase.
The Fix: Calculate the total outflow, not just the monthly instalment. Ask yourself: would I buy this if I had to pay cash today? If the answer is no, the EMI isn't making it more affordable - it's just masking the real cost.
Mistake #4: Ignoring January Altogether
Festivals are clustered, but bills aren't. School fees, insurance premiums, credit card payments, rent, all continue after the diyas are extinguished. Many families overspend in October-November, assuming their regular income will cover everything. It rarely does.
The Fix: Before spending your Diwali budget, map out your January obligations. Keep that money sacred. Your future self will thank you.
Bajaj notes, "Financial wellness isn't about deprivation during festivals - it's about proportion. Celebrate fully, but within boundaries that don't compromise your tomorrow."
Celebrate Smart, Not Sorry
A year later, Deepti plans to celebrate Diwali differently. Same warmth, same family, same joy but with a plan. She has saved monthly, set clear limits, and will still enjoy every moment. This January, when her statement arrives, she will smile. Zero balance carried forward.
Festivals come every year, but financial mistakes don’t have to. This Diwali, let your celebrations shine, not your credit card debt.
