I have a stack of half-written stories for Get Rich Slowly. Last January, for example, I started a post about “predatory shopping”, which is a term my friend Rhonda used to describe her behavior recently. She’s in great financial shape, so she sees all of the bargains and going-out-of-business sales as an opportunity for her to save money on things she’s been putting off. She calls this predatory shopping.
But Kiplinger’s has an article that warns that bargains may not always be what they seem. In liquidation sales, the first round of markdowns won’t save you much. And from what I’ve heard, they may actually cost you. If you really want to be a predatory shopper, you need to wait for the deep discounts to set in, but by then the good stuff may be gone.
Elsewhere, Matildaben pointed me to a fun thread at Ask Metafilter where user Math asks readers to fill in the blanks: “I used to do _____, but now I use _____ on the internet for free!”. For example, “I used to buy CDs to back up my data, but now I use the free backup system at Mozy.” I haven’t had a chance to read the entire list, but it looks like a treasure trove of ideas.
Over at Bargaineering, Jim has created a video in which he describes compounding and the difference between APR and APY. This is one of the topics that several GRS readers wanted explained during Financial Literacy Month. If you’ve been confused by the difference between these two terms, check out Jim’s video.
Finally, Michael J. dropped a line with a funny comic strip about frugality. (Well, I thought it was funny, anyhow.) I wish there were more humor in personal finance…
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Lol I must admit I enjoyed the comic and to be honest I have been guilty of that as well. I will save money on going out and clothing and then turn around to go on vacation. I see that as the main benefit of frugality though; save money on one area so you can spend it on another that brings you greater joy.
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Fertheloveofpete, don’t be banking on online storage space for cd backups. What will you do if the site suddenly goes under – fiscal issues or their backups fail? No if you use the online site as a backup for your backup cds (in case of a major catastrophe like a hurricane or tornado) then the online site is a wise idea.
But never let the site be your primary source of backups.
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The behavioral economist in me says Rhonda probably isn’t getting the good deals she thinks she is. There is nothing in the first and second rounds of liquidation sales that you can’t get online for cheaper. But by thinking she’s saving money on her purchase she feels better.
A bit cynical perhaps, but comparing “sales” to amazon is a hobby of mine.
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“Predatory shopping.” I like that phrase! When I heard today that Joe’s is filing Chapter 11 and will probably be liquidated, the first thing I thought was, “How much camping gear can I pillage?” But then I recalled how disappointed everyone seemed to be with the Circuit City liquidation – raising prices back up to MSRP and then marginally discounting back down to regular prices or just below. So, I will wait until the final days and see if anything I want is still left. By then, the deals should be great and my desire to swoop in and snatch up everything I’ve been holding out on should subside at least a little.
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I have to agree with No Freebie Online Space and add another caution based on my long career in information systems; you don’t know what the security policies are or, even if you do, what breaches lurk behind the scenes. Think of all the occurrences of credit card numbers being ‘lost’ on some bank techies’ laptop that was stolen.
On a more cheerful note, thanks J. D. for the link to APR/APY over at Barganeering. It was exactly the explanation I was looking for.
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Love the comic strip. Too bad they cut back on their cable. Their big screen won’t be as useful to them without it.
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Cable is not needed to enjoy a big screen telly. A PS3 and a massive collection of movies and games will do nicely.
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On the This American Life “Scenes From a Recession” ep a few weeks back, it was confirmed that the first thing the Circuit City liquidators did was raise prices.
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The term ‘predatory shopping’ makes me think of the companies that sell you a product that includes those deceitful hidden fees. An example…I purchased a free trial of a diet supplement online (just pay $3.95 s&h). Lo and behold, WHAM, a charge of $83.17 on my credit card. Believe me, I’m not an ill-advised consumer, there was nothing on the site and nothing on the package that I received that stated anything about the fact that I would be ‘automatically enrolled’ for a monthly shipment of this product (unless I called to cancel w/in 14 days). How can you cancel a membership that you didn’t know you had? I’m disputing it w/my cc, and I get to listen to my husband’s chiding! I truly believe that this is a big reason why none of us want to spend any more of our money…we’re all sick and tired of the gimmicks, promotions and sneaky BS. First, we lose all of our nest eggs and now companies are using marketing and tactics that are more aggressive than ever. We need to fight back!
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It is important to know the cost and pricing of things– this is how you will recognize TRUE bargains . . .
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the not-so-funny humor in personal finance comes from bloggers who publish junk and who know less than nothing.
not referring to you, JD, but they are out there.
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A local furniture store was going out of business. I had not thought of going until the last day when my husband said he needs a new office chair. So off we went since he does not move well and we do not have our own scooter yet. I went in without him. They had one chair left not quite high enough in the back for him. the going out of business discount was 20% off the marked price, by this I mean the original price. This chair did not fit the bill so I did not consider even beginning the bargaining process. Now furniture has at least a 100% mark up. The person next to me told me they offered what would be 30% off and they turned it down. As I walked to the front of the store I heard many people complaining they are only taking the marked discounts. The store closed that evening with out a sale to me. But I noticed many sold tags and not many with a high discount. I suspect they will restructure the business and reopen the store in six months perhaps with another name.
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Just because things are on sale doesn’t mean they are a bargain.
I recently picked up a heavily discounted memory foam pillow from MACYS. But I’ve been wanting a new pillow for about 6-months and I’ve been shopping around online to figure out how much pillows cost.
But predatory shopping isn’t a bargain if you don’t even need (or have a plan to use) the stuff in the first place.
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Yeah, the Circuit City liquidation wasn’t. Linens n Things was much better. We got some stuff for about 10% of the original price. My husband is a bargain hunter so he made sure we got a screaming good deal.
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I agree with what NoFreebieOnlineSpace space says about not depending solely on online backups, but I do recommend Mozy. It is my offsite personal backup of choice, and it works well. I recently upgraded to the $5/month option to get unlimited space and have shoved 80GB of personal photos and home videos up there. It’s not my only backup option, but it’s nice to know there is something offsite that gets automatically updated every night. Mozy plus a external USB drive for a 2nd backup makes a cheap but convenient & redundant backup system.
Also, the company behind Mozy is a subsidiary of EMC, which I think reduces the likelihood that Mozy will disappear overnight.
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