Stop impulsive shopping
Many of us are guilty of shopping impulsively when there are “good” deals thrown in our faces via junk mail, advertisements, and other promotion media, but the only time those deals usually make sense financially is if they’re actually needed at the time of the sale. Otherwise, we’re just spending to spend.
Jeff Kreisler, editor-in-chief of the behavioral science website PeopleScience.com and co-author of the book Dollars and Sense, explains: “When you buy something that used to be $100 but is 35% off, you’re not ‘saving’ $35 — you’re spending $65. Instead, compare the price you’re paying to zero; that is, the price of not buying it at all.”
Cut back on recurring subscriptions
The subscription model is growing in popularity and so it’s easy to get carried away or even forget about the subscriptions for which you’ve signed up. Personal finance expert Jeff Proctor, owner of personal finance blog DollarSprout.com, suggests an easy way to take some of your budget back: “Pull up your online banking information and write down every single recurring subscription that you’ve paid during the past 90 days,” he says. “I did this recently and was surprised at how much I was spending. I’m not saying you have to give up your beloved Netflix — although that would save $150 or more during the next year — but cutting a few items out or even reducing a current subscription plan can be a great way to reinvigorate your wallet.”
Adds Logan Abbott, who is the president of Wirefly, an online comparison engine that helps people save money on monthly services: “Many people sign up for monthly delivery services like vitamins, razors, and online news websites — then they stop using the product but forget to cancel. You can identify these forgotten subscriptions by simply scanning your credit card bill.”
Transfer high-interest credit card balances
According to Abbot, It’s important to make sure you’re not carrying any large credit card balances that you’re being charged interest on that you have the ability to pay off. If you can pay it off, then go ahead and pay it off. If you can’t, and you’re paying interest, then look into reducing your payments by getting a credit card that offers a 0% introductory APR on balance transfers.
Are you really saving money if you’re already deep in debt? The answer to that question is always “no.” If you don’t need an item and you know you can’t afford it, you shouldn’t be buying it. There are no excuses that will justify this. And don’t try to convince yourself that you deserve it. What you do deserve is a credit score you can be proud of.
Beware of decoy prices
While retailers assume you’ll open your pockets for sale prices, decoy prices are prices sellers don’t really expect anyone to pay. It’s a shady business practice, but there are ways to spot it.
“Any time there’s an item with three options — the simple one, a middle one, and high-priced luxury version — chances are the highest price is a decoy price,” explains Kreisler. “Unless you’re an expert in that particular product, you’ll probably think: Oh, we don’t need the deluxe model, and I don’t want to be cheap and buy the lowest one, so I’ll just make the ‘safe’ choice and pick the middle one. Decoy prices are designed to make us choose the middle one.”
And now you’re probably thinking about all the time you’ve fallen for this ruse, aren’t you?
Pay attention to your payment methods
When we use credit cards or e-payments or shop online, we pay less attention to the amount we’re paying — and that results in quicker, less-thoughtful purchases.
“These methods are unavoidable, but keep in mind that paying in cash will always save you money,” Kreisler says. “Try to be mindful and treat all of your payments as if they were cash by stopping and thinking about the amount and whether or not it’s the best choice. Don’t be lulled into one-click and express-pay; that’s just code for no-think and over-pay.”
There’s no shame in trying to save money any way you can; I’d rather be debt-free and comfortable while living a modest lifestyle than be under constant financial stress trying to keep up with the Joneses. After all, do you want to be a prisoner to your creditors, or control your own financial destiny? It’s your choice to make.
Now … for six more ways to resuscitate your finances, click here.
Photo Credit: Rosemarie Voegtli