Are you really saving money on that?
The following is a guest post from Miranda Marquit. She edits information on debt consolidation for DestroyDebt.com and writes for YieldingWealth.com.
Every where we turn, there are “special offers” and “bargains” that save us money. But sometimes, these are just gimmicks designed to help us spend more. Here are some ways that you may actually be spending more, even though you are supposed to be “saving” money:
1. Credit card and financing deals
“0% financing for 12 months!” is a common refrain, as is “Pay nothing until 1010!” However, when you buy something on this premise, planning to pay it off, the store wins. Most people actually don’t pay off their purchases before interest is charged. And in the case of the “no payment” deal, the interest is usually capitalized and added to the principal when it is time to start making payments.
Another problem with buying things on credit (besides the interest charges) is that you have a skewed idea of how much you spent. Study after study shows that people spend more money when they shop with credit – and they have a harder time remembering how much they spent.
2. Big superstores
The idea behind the superstore is “one stop shopping.” Additionally, it’s supposed to have a plethora of items at lower prices. However, many of us spend more money when they shop at these superstores. A few items are priced lower, but most of them are just as expensive as elsewhere. And people tend to buy more at a superstore, as well as buy impulsively. Comparison shopping for sales and using coupons often don’t enter the equation, either. You’ll buy less – spending less overall – if you make a list of the best prices at two or three stores, and plan your shopping trip in advance.
3. Free shipping
Many web sites offer free shipping when you spend a certain amount of money online. So, in order to save $5.97 in shipping costs, you make an unplanned purchase of $10.64. Your “free shipping” actually cost you $4.67.
This principle applies to other similar ploys. The “buy two, get one” sale and other gimmicks are designed to have you spend more money than if you stuck to your original plan to just buy one. It looks like a bargain, but you are really spending more than you planned – on something you probably do not even need.
Before you part with your family’s hard-earned money, it’s important to research whether you’ll really save money. Any “bargain” that requires a purchase of items you don’t need or want, or hadn’t planned on buying in the first place, isn’t really a money saver.
Agree? Disagree? What’s been your experience with these marketing tactics? If you avoid these kinds of strategies, I’d love to hear how else you “work the system” to save money.
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