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Smart Festive Spending: How to Balance EMIs, Savings and Investments
M
Moneycontrol•19-10-2026, 12:59
Smart Festive Spending: How to Balance EMIs, Savings and Investments
- •The Reserve Bank of India raised the repo rate by 25 basis points to 5.50 percent, increasing borrowing costs for households.
- •Financial experts warn that taking on new festive EMIs can severely impact monthly budgets, emergency savings, and long-term investments.
- •Households should ensure their total debt-to-income ratio remains manageable and avoid relying on credit cards or personal loans for celebrations.
- •Experts recommend setting strict festive budgets, calculating the total cost of borrowing including interest, and protecting existing investment plans.
Key Questions Answered
The Reserve Bank of India raised the repo rate by 25 basis points to 5.50 percent on October 7, 2026, marking its first increase in nearly four years.
Financial experts suggest that households approaching the 40 percent debt-to-income mark should exercise caution before taking on additional EMIs for festive purchases.
Experts recommend fixed deposits, short-duration and target-maturity debt funds, floating-rate instruments, and arbitrage funds as better alternatives, while shifting equity focus to cash-rich, low-debt businesses.
