Spending more to save more money is a very common pitfall.
So-called “savings” opportunities, whether it’s a “limited time sale” or a “buy one get one free” temptation, where you add additional items to get an even bigger discount or simply to reach a free But it’s almost everywhere. Shipping threshold.
But if you’re not careful, spending money on savings can lead to excessive buying habits and high-interest credit card debt, according to consumer savings expert Andrea Wolloch.
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It’s similar to “girls math” analyzes the price of an item by cost per wear to justify a big purchase, and savings includes any way to streamline your purchasing decisions.
“When you save, you justify your desire to buy more,” says Brad Klontz, a psychologist and certified financial planner based in Boulder, Colorado.
Almost no matter how you look at it, Americans are under financial strain. But consumers continue to fall into these financial traps even as budgets are strained by inflation and high interest rates.
“A team of scientists has discovered a way to get more money out of you,” said Klontz, a managing principal at YMW Advisors and a member of CNBC’s Council of Financial Advisors.
But the savings come at a cost, he added.
“We’re constantly spending more than we can afford, and as a result, we end up experiencing financial health stress,” Klontz says.
Wollock said think carefully about your purchases and consider the trade-offs, especially when it comes to sacrificing your financial standing. Here are her six steps to avoid the financial trap of thrifting.
- Please keep the noise quiet. Wollock said identifying the triggers that lead to impulse purchases is key to avoiding them in the future. “Delete shopping apps on your phone that tell you about the latest sales and unsubscribe from store newsletters,” she said. Instead, it “looks for coupons only when you need them” through deal sites like CouponCabin.com or using browser plugins like SideKick that scan the applicable codes.
- Please pay in cash. Buying big-ticket items with cash can also help you avoid impulse purchases. “When you actually give them a bill, they’re less likely to part with their hard-earned money on something they didn’t plan on buying or don’t really need,” says Wolloch. This strategy does not eliminate the opportunity to save money, she added. Use the Fetch app to take photos of your receipts, earn points, and redeem them for gift cards at retailers like Walmart, Target, and Amazon.
- calculate. In some “buy more, save more” deals, the discount rate is often the same but disguised as greater value, Wolloch said. For example, getting $20 from $100 is the same as getting $10 from $50. “Don’t let this fool you into buying more. If in doubt, use a calculator,” she warned.
- Avoid temptation. If a particular retailer has a limited-time sale that piques your interest, avoid going into that store altogether. Instead, “order online, select in-store pickup, and get what you need,” Wolloch said.
- Creating “hurdles” for shopping. If you’re shopping online, deleting your saved payment details can create a “purchase hurdle” that you have to think twice about before proceeding with a purchase, Wolloch said.
- Set time rules. If in doubt, sleep on it, she advised. “Please take 24 hours to think carefully before you hit the buy button.” Chances are, you’re moving on.
