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With all of the Groupon, LivingSocial and other hot deal emails we receive in our email inbox these days, there are lots of fantastic deals for consumers to take advantage of. But how much of a “deal” are these emails? As reported by AARP, a recent study found that impulse shopping accounts for almost 40 percent of all money spent online. That can add up to a big chunk of our monthly credit card bill.
And while DailyFinance.com recently shared that TransUnion has reported that credit card debt has reached a 10-year low at $4,699 per borrower, credit card debt remains a struggle for a large segment of Americans who are looking to tighten their spending during these uncertain economic times.
If you are one of the many people who are drawn in by the hot deal emails and other online “sales”, there are some easy steps you can take to help curb your impulse shopping. By practicing these tips, you will be able to trim down your credit card bill so you can put your hard earned money toward better things than interest payments.
Here are the 4 steps we recommend:
1. Audit your impulse buysOften, we don’t even realize how much we are spending on our internet impulse buys. One great way to help curb our spending is simply by reviewing how much we are investing in items we really don’t need.
Create an easy spreadsheet where you can track your purchases. Every time you buy something off the internet, add it to your spreadsheet. Include the date and the cost; revisit the item 30 days after you received it and record how often it was used. If it was a gift card or credit toward a restaurant or other activity, record if it is a location you will visit again in the future.
If you are diligent with your list, you’ll be able to identify how much money you are actually saving on your internet deals as well as those buys that were really a waste of cash. You can take it a step further by putting together a “What Was I Thinking?!” list of your most expensive, less-than-practical buys and tape it to your computer. You’ll see the list before you make your online purchases and it will help you think twice before submitting your credit card information.
2. Make a 30-day listEvery time you come across an item that you want to purchase, add it to a “30-day list”. Write down the item, where you found it and the date that you added it to your list. If you still want the item after it has been on your list for 30 days (and the funds are available to pay for the item), go ahead and make the purchase.
Waiting for 30 days will give you time to evaluate how the item fits into your lifestyle, if it is worth the financial investment and provide you time to save the funds to pay for the item. Taking this time to reflect will help ward off unnecessary purchases.
Sure, this may mean that you miss out on a sale or two; but, you can nearly always find some sort of deal for the truly hot items. And if it’s an item that you didn’t truly need during those 30 days that you waited, chances are, you can wait to purchase the items until the next good deal comes along.
If there is an item that you truly need before 30 days have gone by, take at least 24 hours to think about the purchase. Add the item to your virtual shopping cart (or, better yet, add it to a wishlist) and walk away from your computer. Separating yourself from the computer will help you avoid the temptation of just purchasing the item without thinking about the expense.
3. Make it less simpleWhen you’re in a physical store, you have more time to talk yourself out of unnecessary purchases. You have to physically pick up the product, navigate to the cash register and wait in line. By the time you actually pull out your credit card, you’ve had several minutes to consider the purchase. But when a deal hits your email in-box, it’s possible to make the same purchases within seconds, leaving little time for the logical thinking to overcome the emotional appeal of a “fantastic find”.
You can add some time to the shopping process if you deliberately strip away some of the conveniences that have been built into internet shopping. First, make a point of not saving your shipping, billing or payment information online. Second, keep your wallet in a separate room than your computer. This will force you to walk to a different part of the house in order to complete your purchase.
Another idea is to unsubscribe from all of the marketing emails you receive. If you’re worried about missing out on a truly fantastic deal, ask a frugal friend or your spouse/partner if you can update your emails to go to their email account. They can screen the emails and let you know if there is a sale or coupon that you won’t want to pass by.
4. Take the time to comparison shopBefore you purchase an item, take at least 30 minutes to complete some comparison shopping by researching the other offers that are available through different merchants. This will allow you to think about the purchase as well as see some more consumer reviews about the product to see if it is worth the price. How many of us purchased an item spontaneously, only to find out 15 minutes later, there was an 8% cash back offer from FatWallet?
Daniela Baker with CreditDonkey says, this step alone often saves consumers from adding another expensive purchase to their credit card. It gets them in the habit of critically reviewing their purchases so they can ensure they are getting the biggest bang for their buck.
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