This is a guest post from Gail Vaz-Oxlade, the host of the popular Til Debt Do U$ Part on CNBC (Saturday nights at 10 and 10:30). Gail is a columnist for Yahoo Canada, Chatelaine, and Zoomer Magazine and blogs daily at her website, where she also offers terrific tools people can use to dig themselves out of the hole. Gail’s latest book is Debt-Free Forever.
Who doesn’t love a good sale? But when bargain-hunting, coupon clipping, or mastering the deal becomes the objective, you and your budget are likely headed for big trouble. I can’t tell you the number of people who have said, “But it was such a deal!” Really? You spent the money you need to have available to pay off your credit card balance in full — but it was a deal? Hmmm.
- If you’re spending money you don’t have — if you’re putting it on credit and not paying it off in full by the end of the month — it’s not a deal.
- If you’re buying something you don’t need, it’s not a deal.
- If it takes you three weeks, three months, or never to put what you bought to use, it’s not a deal.
A deal is buying the snowsuit your child is going to wear next winter on sale at the end of this winter at 70% off. A deal is picking up a new book you know your sister is dying to read for half price. A deal is getting something you really need or want at a significant savings — and being able to pay for it in cash.
There are some places that are known for having “deals”, and people take the value they’re getting for granted without actually checking the prices. Dumb! And there are people who will go to extremes to get a deal, lining up for hours to browse — and ultimately buy — in stores where they wouldn’t normally shop. Whazzup with that?
Shopping for bargains has become a social disease. So how do you know if you’ve been bitten? Here are three clues:
- Your home is jammed to the rafters with Stuff. Chronic bargain shopping is often unconscious spending, so you may not even know you’re doing it. Take a look around. How much of the Stuff you bought is sitting unused?
- Your favorite phrase is: “It was on sale.” All of us fall prey to impulse shopping from time to time. The problem for people who can’t curb their desire for immediate gratification is that they’re not prioritizing. They’ve lost (or never had) the ability to figure out if they can do without, so, but for a whopping salary, they’re a centimeter away from destitution.
- Acquiring something new makes you feel happy. As counterintuitive as it may seem, some people become chronic bargain shoppers out of a fear of poverty. It can be a self-esteem thing too. If you have to have the latest fashions and accessories to feel you’re admired, you’re self-esteem issues are showing. And if you have more scrap-booking supplies than you’ll use in your next five projects, take it as a sign that your bargain shopping is out of control.
People who can’t pass up a good sale — even if it’s on something they don’t want, need, or even particularly like — aren’t smart bargain buyers. They’re compulsive shoppers. Scoring deals helps them to ease their insecurities and feel more competent and in control. And they rationalize their purchases as something good they are doing for themselves or their families.
A study by Norwich Union Insurance in Britain in late 2007 showed that 17% of Brits spent more than planned because they couldn’t resist a bargain, and almost a quarter of them could justify buying more because of a low price tag. In fact, nearly a third got such a buzz from bargain shopping that they were always on the look out for the next hit
So are you a bargain junkie? Do you:
- Hit sales and clearance racks when you’re feeling sad or mad?
- Spend more than you can afford?
- See sales as opportunities you just can’t pass up?
- Feel guilty about your shopping?
- Walk out of stores with things you hadn’t expected to buy?
- Hide your purchases?
- Routinely forget what you bought and find things in your closets with the tags still on?
The next time you find yourself sidling up to the cash register with a bargain in hand, ask yourself some simple questions: “Do I need it? How will I pay for it? What will I do with it? What would happen if I waited?”
Better yet, get yourself a small notebook and promise you’ll never again shop without a list. In this notebook, keep a list of the things you need and want. If you find a bargain, look at your list to see where that item is. If it’s at or near the top of your list in terms of priority, and you have the cash on hand, buy. If not, walk away.
You’ll accomplish a whole bunch of things with a list book:
- You’ll keep yourself on track, looking only at things you know you need or want,
- You’ll prioritize your spending, and
- You’ll only spending money you have available.
In a culture that worships shopping, it’s only natural that the “bargain” be the Holy Grail. But if you find yourself being suckered into buying stuff just because “it’s a great deal”, you’re definitely not as smart as you think you are. If you’ve saved so much money with all your bargain shopping, show it to me.
If you can’t show it to me sitting in your retirement plan, in an educational savings plan for your kids, or in your emergency fund, you’re deluding yourself. You need to find something constructive to do with your time. Bargain-hunting isn’t doing it for you.
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