Finance News

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

As consumers the trading period over Christmas/New Years presents us with the opportunity to purchase many goods at a discounted rate. If it’s an item that you have been seeking for a while, you might have saved a lot for it. But, if you didn’t take a moment to consider whether you actually needed the item you purchased, you might be spending a lot more than what you’re saving over the long term. Here are some common indicators that you’re paying more than you realise, and some basic guidelines to use post-Christmas and pretty much anytime you see the word sale.

Sucker-for-a-sale warning signs

The majority of emails you get are about sales

Your friends think you’re inundated at work due to the copious amount of emails that continue popping up on your phone. When in reality 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

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 throw out 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

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.

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 your goals.

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.

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 example, 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 occur quite frequently. You’ll see them during the holidays, as seasons change and coinciding with special events throughout the calendar year.

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, treat that person you’ve been living with to 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.

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


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ASCK Pty Ltd (ACN 105 450 566), trading as AMEGA Financial Solutions is an Authorised Representative and Credit Representative of AMP Financial Planning Pty Limited Australian Financial Services Licensee and Australian Credit Licensee 232 706. General advice warning: This website contains general information only. It does not take into account your objectives, financial situation or needs. Please consider the appropriateness of the information in light of your personal circumstances.

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