Money and Life
(Financial Planning Association of Australia)
Tempted by the EOFY discounting frenzy or Christmas sale craziness? Learn five ways to keep sale spending under control so you can fight retail regret and limit your future debt.
Back in the day, post-Christmas sales were well worth queuing for. Big discounts offered by major stores came only once a year and saw customers flocking to high streets and malls on Boxing Day in their thousands. In the modern era of online retail there are multiple sale events to tempt us to part with our dollars for the sake of bagging a bargain. From Click Frenzy and Black Friday to the EOFY sales, it’s harder than ever to resist the lure of big discounts.
1. Fight FOMO and YOLO
Steering your thoughts away from a Fear Of Missing Out (FOMO) and/or You Only Live Once (YOLO) mindset is the biggest hurdle to overcome. Sale time is the perfect opportunity for retailers to tap into these attitudes and habits of mind. When something is reduced by 30, 40 or even 50% it’s easy to convince yourself that you’d be a fool to pass up the opportunity to buy. And marketing messages are getting better and better at convincing us that life’s too short not to treat yourself when sale time comes around.
Being aware that sale discounts, and the advertising that goes with them, are designed to exploit these thoughts is the first step to saying no to impulse spending.
2. Think time, not dollars
If you know you’re going to be tempted at sale time, there are a couple of simple, powerful techniques to help you make better spending choices. The first is to look at the cost of a bargain in terms of the hours it takes to earn the same amount. This can help you reframe what you’re prepared to pay for something, even when it’s significantly discounted from the original price. A $300 dollar item reduced to $200 may seem like less of a steal when it’s takes the best part of a day’s work to pay for it.
3. Take a mindful pause
Another effective circuit-breaker for sale splurges is taking a few moments to cast your mind back to the last time you made an impulse purchase. Try to remember the feelings you had at the time and how long they lasted. Did you feel good about buying it for a long time or did the post retail glow wear off quickly, or even transform into regret or guilt? This is another way of looking beyond the dollar discount to really understand what the purchase is worth to you.
4. Have a splurge budget
Treating yourself at sale time can make a lot of sense. If there’s something you’ve had your eye on for months, buying it on sale can seem like a just reward for your patience. But these purchases can be just as much of a problem for your finances as the impulse buys if you don’t plan for them in your budget. To avoid experiencing the financial stress and guilt of splashing out at sale time, have a splurge budget up your sleeve for just those occasions when a bargain comes your way. There’s no harm in some spontaneous spending if you’re prepared for it.
5. Avoid Afterpay
Online shopping has made it easy to snap up a bargain without even leaving the house. And with the widespread uptake of Afterpay by many brands and retailers, you don’t even need to get your wallet out to buy right now. But what seems like an easy, low cost way to ‘buy now, pay later,’ can get expensive and complicated if you can’t really afford it. Unlike credit card providers, most buy now pay later services do not check your credit history or ability to make repayments. If you’re unable to stick to your repayment schedule, you’ll be liable for late fees. Some providers also charge monthly account fees and for payment processing.
Looking for more ways to stay on top of your budget? Working with a CERTIFIED FINANCIAL PLANNER® professional can be the ideal way to get to grips with all your money matters, including your spending habits and cash flow.
 MoneySmart, Buy now pay later services, “Most buy now pay later providers do not check your ability to make repayments or your credit history. This means you could end up taking on more credit than you can afford and could have trouble making your repayments.” https://www.moneysmart.gov.au/borrowing-and-credit/other-types-of-credit/buy-now-pay-later-services