March 18th, 2013
8 Shopping Mistakes that Cause Serious Money Woes
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We all know not to grocery shop when we’re hungry, and we all know not to visit retailers selling handbags for more than our mortgage payments. However, there are several shopping mistakes that aren’t as easy to identify. Read on for a roundup of common errors and how to avoid them.
You open store cards for savings.
Many shoppers are tempted by the store card sales pitch, with instant savings upwards of 20 percent making it seem like a smart move. However, the hard inquiry associated with opening a store card dings your credit score. Additionally, having a wallet full of credit and store cards can lead to mismanagement of payments and will likely result in more debt with mounting interest and late fees. If you’re looking for a new card, read reviews and stick to one or two that offer cash back or travel rewards. Meanwhile, search for coupons and shop sale racks to help you save at stores.
You’re unaware of dynamic pricing.
Dynamic pricing is the term associated with daily — even hourly — price fluctuation of the same product by the same retailer. NPR’s Marketplace highlights a great example of this retail strategy, when a popular DVD set was priced at $100 in October, $70 before Black Friday, and $134 after Black Friday. Ultimately, comparing prices on items is essential for savings, especially for items with high markups. Ink cartridges (a product known for extreme markups), for example, can be easily compared using InkjetWilly.com, where you can find prices for both OEM (original equipment manufactured) and remanufactured cartridges.
You are a compulsive “spaver.”
Buying something because it’s on sale is a waste of money, even if you’re paying less than the original cost for it. Referred to as “spaving,” or spending money to save, this impulse is a surefire way to sabotage your budget. If you weren’t intending to buy something and find yourself considering it anyway, make sure it’s for the right reasons and not simply because it’s on sale.
You assume you can’t return used or open items.
Dissatisfaction with a product is especially disappointing when you can’t return it. Unfortunately, most people assume that the moment they open and use a product, it cannot be returned. This is not always the case, however, even with personal items like cosmetics. CVS offers a 100% customer satisfaction on CVS-brand items and beauty products, enabling you to return that opened eyeshadow that you didn’t enjoy. Additionally, electronics stores offer open-box products to recoup the loss associated with a used-and-returned item. Ultimately, you should review return policies and chat with customer service reps about an unsatisfying purchase.
You are dialed into your smartphone 24/7.
Mobile devices spur us to spend more… and you may be surprised to learn just how much more. According to the American Institute of CPAs, smartphone users spend an average of $204 a month on apps and downloads alone. This doesn’t include all those impulse buys made by the tap of a finger that are ultimately promoted by email offers received directly on our phones. To keep your smartphone a useful tool and not a bad habit, delete your payment history information from the eRetailers you often browse. Opt for free apps and games and stream music for free via Pandora.
You’re a daily deal fiend.
Daily deals are a great way to get away, try new restaurants or indulge in a spa service for a low price. However, these discount vouchers— like those from Groupon or Bloomspot, for example— aren’t considered to be gift certificates and aren’t protected under the same consumer laws. Ultimately, these deals carry strict expiration dates and making careless purchase decisions will result in a stack of expired offers. Since these vouchers retain the value you paid no matter the expiry date, don’t just throw them away. You can also sell them at CoupRecoup.com before they expire to get some cash back.
You go to the grocery store several times per week.
Did you know impulse purchases make up 50 percent of the average grocery bill? If you’re headed to the store multiple times per week, those impulse buys can really add up. Limit the number of times you visit the grocery store by creating a detailed plan of what you will eat and cook each week. If this isn’t feasible, determine how much you’re going to spend during your next trip and shop with cash. Doing so will impede your ability to pick up those unnecessary extras.
You buy beyond your means.
Recent payroll tax changes mean you may not be bringing home as much cash as you used to. If you’re continuing with the same shopping and spending habits, you may need to review and adjust your budget to meet these changes. You don’t want to spend beyond your means and find yourself in a deep financial hole after it’s too late to catch up.
Andrea Woroch is a consumer- and money-saving expert who is passionate about helping people learn how to live on less without drastically changing their lifestyle. She travels across the country sharing smart shopping tips and personal finance advise with media and has worked with top news outlets such as NBC’s Today, New York Times, Dr. Oz, Kiplinger Personal Finance, CNN and many more.
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