“Sale” Isn’t a Green Light
Up to 16 percent of Americans suffer from shopping addiction, or a compulsive habit of buying with significant adverse consequences, according to a study published in The American Journal of Psychiatry. And while shopping may not be such a serious problem for most people, some of us still make mistakes that cause us to waste money.
Whether you’re buying groceries, household items or shoes, chances are you’re overspending thanks to a combination of psychological and sales tactics. Here are five of the most common shopping mistakes and how to stop making them.
Spending More to Get Rewards
Known as “spaving,” spending more to save more is a shopping mistake that many retailers encourage with “crafty promotion design,” says Kendal Perez, blogger at Hassle Free Savings. For instance, shops like Express and Victoria's Secret often offer $15 off $50, $20 off $100 or $30 off $150, “making it seem like the more you spend, the more you save,” she says. “However, the more you spend, the more you spend, period!”
Another similar trap is spending more online to qualify for free shipping. “It's an easy trap to fall into, since it appears you'd be saving more by reaching the minimum order requirement,” says Erin Konrad, content developer at CouponPal. “However, often you don't really need the other products.”
How to avoid it: Establish a budget in advance and stick to it. “If what you planned to spend qualifies you for savings, enjoy those savings and leave it at that,” Perez says. If you’re shopping online and don’t qualify for free shipping, check out FreeShipping.org for available coupon codes or hold off until your order qualifies for free shipping.
Buying on Impulse
“Grocery stores aren’t the only ones tempting us with impulse buys at checkout anymore,” Perez says. “Retail stores like Old Navy and T.J.Maxx have checkout areas littered with small items like coffee mugs, colorful socks, cheap accessories and wrapping paper.”
Whether it’s gourmet hot chocolate or trendy accessories, “last-minute, point-of-sale items are like candy — hard to avoid and definitely bad for you,” says Brian Nickerson, co-founder and CEO of coupon search engine Chippmunk.com. “These items usually have high profit margins for the retailer, which means as a consumer you’re overspending.”
How to avoid it: Take the time to review the items in your cart before you pay. Make sure everything you selected is actually something you need. “You might find items you thought you needed in the moment no longer have the same urgency. By reviewing your cart, you can save money by deciding against unnecessary buys and distracting yourself from the impulse purchases,” Perez says.
Waiting Until the Last Minute
When you wait until the last minute to make a purchase, you’re more likely to overspend. “Dashing into the store on your way to the baby shower doesn't give you time to make a responsible spending decision,” says Gail Cunningham, spokesperson for the National Foundation of Credit Counseling. “Even worse [is] buying a gift at an airport shop as you travel to the family reunion. You're a captive audience, and the prices will likely reflect it.”
Yes, life is busy and it can be difficult to schedule time to buy groceries before the day of your dinner party, but feeling rushed every time you make a purchase is a recipe for spending too much money.
How to avoid it: Rather than purchasing needed items at the last minute, take time to plan ahead for the week’s — or month’s — spending. “Make sure to compare prices and discounts available across similar retailers,” Nickerson says. “Doing so can usually save a consumer 15 percent or more with just 30 seconds of additional time.”
Buying in Bulk Just Because
Purchasing items in bulk at Costco or overstocking on other items on sale at the grocery store can seem like a great way to save money. But purchasing large quantities doesn’t always work out well, especially if you’re not buying for a large household. “Well-meaning people think they're being financially savvy by buying in bulk,” Cunningham says. “However, you can have too much of a good thing. Not only can storage be a problem, but if you end up having to toss out food because you can't use it by the due date, you've wasted your money.”
How to avoid it: Before purchasing an item in bulk, keep track of how much of it your household actually consumes and how long it takes you to consume it. Also, make sure you have a specific place to store the extras before you purchase them. If you have no place to store items and no assurance that they will be used or consumed within a reasonable amount of time, skip purchasing extras. “Something’s only a good buy if you need it and will use it,” Cunningham says.
Not Having a Plan
Going shopping without a list or a plan results in overspending. If you don’t know ahead of time what you’re going to purchase, you’re more likely to be tempted by unnecessary items that ultimately may not meet your needs. When you know what you’re looking for, you can compare prices of different brands or at different retailers to ensure you’re getting a good deal.
How to avoid it: Make use of price-comparison mobile apps and good old-fashioned shopping lists. “Never leave the house without a list,” says Amber Sager, savings expert at Offers.com. “Whether you're going to the grocery store or heading out to do your holiday gift shopping, a list is imperative to saving money.”