Why buying too many items on sale could be costing you a mint

Are you rushing out to buy things you need, or could really be going without?

We’ve all done it—seen something on sale (particularly over the Christmas/New Year trading period) and without a second thought, jumped to the conclusion—great discount, I must have it straight away.

If it’s an item that has been on your list for a while, you might save some real dough. But, if you didn’t take a moment to consider whether you actually needed the item you purchased—particularly if this is a familiar scenario—you might be spending a lot more than what you’re saving over the long term.

Here are some common warning signs that you’re forking out more than you realise, and some basic tips to employ post-Christmas and pretty much anytime you see the letters S-A-L-E.

Sucker-for-a-sale warning signs

The majority of emails you get are about sales

You know if you fall into this category. In fact, your friends think you’re inundated at work due to the copious amount of emails that continue popping up on your phone. Little do they know it’s The Iconic, David Jones and Woolworths keeping you up to date with the latest specials.

You’re giving up quality time with real people to scour sales online

Oh, how your family, roommate or partner miss the days when you used to sit up at the table at night and have a conversation. You miss it too, but you’ve just scrolled through 1,809 discounted shirts you could potentially wear to an event next weekend, and you’ve still got 1,203 to go.

You have things at home with the tag still on them

You can’t help but feel bad when you do a clean out and go to chuck something you bought ages ago that still has the tag on it. You were so sure you wanted it at the time, but you look down at the 50% off sticker, think about the money you saved, and tell yourself it could’ve been worse.

Packages often arrive that you don’t remember ordering

Sure, everyone likes a surprise, but if what you bought wasn’t something you were hanging out for, was it really something you needed? You may have asked yourself the same question but quickly blocked out the voice of reason inside your head and said—yes, I do need this!

You’ve racked up a hefty credit card debt

The average credit card holder in Australia currently owes around $4,213 and on top of that, is paying nearly $695 just in interest fees every year1. While your debt might be more or less than that, unpaid debt can have long-term consequences, including stifling your ability to get a loan in future.

How to take back control

Write a shopping list and stick to the plan

Often, the sensible way to bargain-hunt is to know exactly what you want before your shopping expedition begins. That’s why it’s a good idea to write down what you need, stick to the plan and try your best not to stray from the path.

Stop and ask if you really need what you’re buying

If you do come across something that you weren’t expecting to find, this is when it’s important to stop and ask yourself if you actually need the item that’s on sale. Consider whether you’d buy it if it wasn’t on sale. After all, it’s hardly going to be a good deal if you never end up using it.

If you have time, go back at a later date

Check out how long the sale is on for. Sometimes if you have an extra day or two and are willing to sleep on it overnight, you might come back with a different perspective the following day.

Think about what it’s really costing you

If you’re forking out on countless items you don’t need or use, remember that’s spending, not saving. Also keep in mind, the reduced rate mightn’t be as attractive as you think. For instance, 25% off something that’s $400 will save you $100, but 25% off something that’s $20 is only saving you $5.

Remember there will be other sales

Whatever you’re in the market for—clothes, appliances, electronics—sales are rarely a one-time event. You’ll see them during the holidays, as seasons change and coinciding with special events throughout the calendar year. One thing you can be sure of is most sales will happen again.

Add ‘SFDs’ to your calendar

Scheduling some shopping-free days (SFDs) into your calendar could be a big help and give you time to do other things. You might look at selling those sale items you never ended up using to put toward a holiday, or making that person you’ve been living with (remember them?) a nice dinner.

Put your spending into perspective

Check your statements to see how much has gone toward various sale items in the last six months and consider what other things you could have done with that money. It might be motivation to save the same amount of money over the next six months and put it toward a different goal.

Final thoughts

It’s easy to say ‘I saved so much’ without considering ‘it cost this much’, but hopefully some of the tips above will help you on the road to more mindful spending.

Meanwhile, if you’d like some assistance with keeping track of your money, AMP’s Bett3r account helps you automatically pay bills, save, and know what's left to spend to give you greater control.

On top of that, functionality that’s now available through My AMP provides you with the ability to view all of your AMP and non-AMP accounts in one place, while letting you categorise your transactions, making it easier to see where your money is going.

 

1 MoneySmart credit card debt clock – figures taken 8 January 2018

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Any advice in this page is general in nature and is provided by AMP Life Limited ABN 84 079 300 379 (AMP Life). The advice does not take into account your personal objectives, financial situation or needs. Therefore, before acting on this advice, you should consider the appropriateness of this advice having regard to those matters. AMP Bett3r Account is issued by AMP Bank Limited ABN 15 081 596 009, AFSL 234517. Consider the terms and conditions available on request by calling 13 30 30 or at amp.com.au/bett3r and whether this product is appropriate for you. Fees and charges apply.

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