Developing a healthy relationship with one-click purchasing
I have a personal finance confession to make: I love one-click purchasing.
I write about personal finance, so I know that anything that makes spending more mindless typically is a bad thing for consumers. And I know that I definitely spend more when I have the ability to make quick, easy impulse purchases online. In fact, I often check out via PayPal, just so I don’t have to enter my credit card information.
One major guilty pleasure that sometimes eats up my “fun money” rather quickly: one-click impulse purchases of my favorite television shows. (“I Survived” marathon, anyone?)
I find that one-click purchasing makes it easier for me to be less honest with myself about the total amount I’m spending. I’ve told myself, “Just one more episode,” many times and then checked my credit card statement to see that I’ve shelled out more than I would have if I had just bought the whole season at once. But that would have felt, initially, like a bigger purchase, and I might have hesitated about handing over that much cash.
Still, I don’t want to turn off one-click purchasing because it is so convenient. Some personal finance bloggers say the same thing. For example, blogger Daniel Packer, of Sweating the Big Stuff, says he likes using the one-click option to buy books for his Kindle because it allows you to save so much time by bypassing the shopping cart and check-out part of online shopping.
But he also says quick, easy online purchasing can be dangerous for consumers because it encourages impulse shopping. I agree. According to personal finance blog Planting Our Pennies, we should all just turn off one-click purchasing to make buying stuff a little harder for ourselves.
I don’t plan to turn off one-click purchasing, but I do want to be smarter about it. The first step I took was to look at my credit card statement and identify my problem area: $1.99 TV show episodes that add up to big bucks quickly.
Next, I plan to be less impulsive about buying shows. I’ll consider taking a break from a show and waiting for the latest season to get added to Netflix. (I’ve noticed that Netflix sometimes lags a season or two behind on some shows, while Amazon is more likely to have the most recent seasons available at a price.)
If I really want to watch the show now, I’ll admit to myself that I’m going to buy the whole season, and I’ll purchase it upfront at a slight discount rather than buying all the episodes individually. One bonus: That allows me to see exactly how much I’m spending, rather than having to count and add up many small purchases. Overall, it will keep my credit card statement less cluttered.
I also love this tip from Lifehacker: Use gift cards for small purchases made by computer or mobile device. That will simplify your finances, as, instead of a mess of apps, songs and TV show episodes littering your bank statement, you’ll have the single gift card purchase. Gift cards can also help you stick to a budget by providing you with a finite set of funds.
If you really have issues with impulse purchases, Lifehacker also recommends using software like StayFocusd (a Google Chrome app that prevents you from visiting certain time-wasting websites) to block your problem sites during the times you’re most likely to overspend.
I don’t plan to go that far yet, but I think I’ll buy some gift cards to keep handy for the next time I get hooked on a new show.
The unexpected expenses that have been attacking my budget
I have an emergency account. And I count myself as one of the lucky folks who can keep enough in a checking account for regular expenses and some fun on the side.
But what about those sneaky “gray area” expenses that aren’t quite emergencies, aren’t quite regular living expenses and definitely aren’t fun? Here are a few I’ve encountered in the past month:
- My vacuum cleaner broke. It wasn’t the end of the world, but I was surprised by how quickly an oatmeal-colored carpet could start to look dingy.
- My car needed new tires. When I took my car in for a state-mandated safety inspection, my mechanic reminded me that I hadn’t replaced my front tires since he’d first suggested it a year ago. This time, his reminder was less of a suggestion and more of an “I wouldn’t let my wife drive on these tires” kind of thing.
- My seven-year-old laptop is not long for this world. It has been lugged around constantly, dropped on cement and crashing more and more frequently. I’ve already backed it up, knowing the end is near.
- My passport expired. I don’t have immediate plans to go abroad, but I don’t want to scramble with “expedited passport” fees when I do. So I opted for the regular, slow snail mail option — and it was still $110.
Minus the new computer (which I haven’t bought yet), these other expenses have cost me almost $460 in roughly a month (even though I had a gift card that I used to pay part of the cost of the vacuum cleaner). I run a pretty tight ship when it comes to my checking account, with money automatically getting siphoned out toward emergency and long-term savings when I get paid. So it’s not as if I have an extra $500 in checking at the end of the month, on top of what’s needed for rent and other bill payments. And I didn’t want to dip into my emergency savings (which I consider designated for scenarios much scarier than a broken vacuum cleaner).
Luckily, my financial adviser had encouraged me to also send a small amount a month to a “general” interest-bearing savings account for big expenses that crop up between now and retirement. Eventually, the contents of this account will be my down payment on a car. I transferred $480 to my checking account and used it to pay those gray expenses (some of which I routed through my credit card to get rewards points).
This experience taught me an important lesson: While I almost always deliberately save for fun short-term financial goals (such as a new camera or a vacation), I never think ahead about the non-fun stuff, such as tires. As this blog on Breakthrough Personal Finance Trainers points out, there’s no excuse for that, because many of these expenses can indeed be predicted. I knew for a year I should get new tires. My passport had the expiration date printed right on it. My vacuum had been getting gradually less effective and making strange noises. And it’s a miracle my cheap laptop is still hanging on. I could have spread those expenses out over almost a year instead of waiting for the holiday crunch — or sent a bit more each month to my general savings account (rather than making a huge dent in it all at once).
I feel incredibly lucky that I was able to pay for unexpected expenses without going into debt, but I can do better. I plan to be more aware of these types of expenses in the future, and I’m going to start with my laptop. I’ll be sending extra money into my general savings account for the next several months so that I won’t be hit with a massive surprise expense when my laptop dies for good — and rely on my phone or my boyfriend’s computer until I’ve saved enough to pay for a new computer in full.
Need help predicting big expenses — or dealing with those that sneaked up on you? Follow this advice from the personal finance blogosphere:
The Personal Financier explains how you can predict, with surprising accuracy, the expenses you think are unpredictable.
Simple Finance Blog provides a road map for those who get surprised by expenses and don’t have enough savings to cover them.
Experiments in Finance walks you through the options for covering expenses you didn’t plan for — and the possible risks they entail.
My Open Wallet warns that avoiding not-quite-emergency expenses for too long can make them grow into costly emergencies.
Evolving Personal Finance shares a story that illustrates how unexpected expenses can quickly derail your financial goals.
Want a discount on a big-ticket purchase? Just ask
Are you clipping coupons to save a few cents here and there, but missing the chance to save big by not asking for a discount on major purchases?
Recently, I was shopping for a sectional sofa to go in our newly remodeled living room. One day, I saw a coupon code for 25 percent off pop up on the West Elm website. I waited a few days to buy, and the coupon code had expired.
In the meantime, the couch had gone on sale, but the discount wasn’t quite as high as it would have been with the code. I called customer service, explained the situation and asked if there was any other coupon code I could get. The rep offered to credit me an additional 20 percent back to my credit card after I bought the couch.
On top of the sale price, I saved more than $400 just by asking, which added up to almost 40 percent off the retail price. If you’re going to put energy into trying to save a few bucks, it makes sense to focus your energy on big purchases, where you have the chance to save a bundle.
Here are some tips for getting discounts on big-ticket items:
- Do some scouting. If you can plan for a big purchase, you’re likely to get a better price. For example, if you know you want to buy a certain item but don’t need it now, ask a store associate when it might be going on sale, recommends personal finance blog Squawkfox. At the beginning of our remodel, I talked to an Ikea employee and learned that the store regularly has 20-percent-off kitchen sales and that one was coming up soon. We ended up saving $1,000 on our cabinets.
- Be nice. When you ask about getting a deal, it helps to be friendly and relaxed about it. Chat with the store employee or manager and don’t demand or even expect to get a special price. That’s what I did when I called about my sectional, and the employee was more than happy to help me save money.
- Price match guarantee? Ask for more. Many retailers have price matching programs, but they might not be advertised. Many stores will not just match, but will beat a competitor’s price by 5 percent or 10 percent, according to the frugality blog Southern Savers. But you might have to ask.
- Embrace imperfection. If there’s something wrong with an item, but you want it anyway, retailers will often knock a percentage off the price. I once got a great deal on some lawn chairs that were scratched just by asking a store employee, who called a manager. If you spot an already-discounted item in a store’s scratch-and-dent section, you often can get an additional 10 percent or so off if you request it, according to the personal finance blog LenPenzo.com.
- Pay attention to commissions. One more tip from LenPenzo.com: Find out which places pay their sales associates on commission. Shop around first to see what prices other retailers are offering, then go to the store that pays commissions and try to make a deal. The employee may be willing to cut you a bargain to close the sale.
- Forgot to ask for a discount? It might not be too late. WiseBread.com recommends keeping your eye out for sales after you purchase a big-ticket item. If you see the same item on sale at the store where you purchased it, or even another store, you can go back and ask for a refund of the difference. Also, don’t forget that some credit cards have price protection, which offers you money back if an item you bought goes on sale within a certain amount of time after you bought it. These programs often require the price to drop by a certain amount — and you’re more likely to hit that amount with a large purchase.
How to keep your miles alive without buying stuff you don’t need
I got an email from Southwest Airlines warning me that my miles would be expiring in January. Rapid Rewards points expire after two years. Because I now live in American Airlines territory, it’s been a while since I’ve earned points.
I’ve already let my points with AirTran and Frontier expire this year because I had so few points with them that keeping them alive wasn’t worth the hassle. Yet Southwest is different. Although I recently cashed in most of my points, my remaining balance puts me more than half way to a free one-way ticket. I don’t fly Southwest that often, but I’ve decided I’d like to keep those points around. If I happen to make a couple trips with them in the next couple years, I’d like to get a free ticket out of the deal.
The easiest way to keep rewards points active is to earn more points. The problem is, I don’t have a credit card with Southwest. If my Aadvantage miles with American were in danger of expiring, I could re-up my entire balance by buying groceries with my Aadvantage card. I can’t do that with Southwest.
Southwest’s email had a variety of suggestions for keeping my miles valid without a credit card, but most required buying stuff via its rewards portal — mostly stuff I don’t need or want.
My first plan of action was to buy something small, like a song on iTunes. This is the go-to advice for keeping points active among rewards bloggers, and I was happy to see that I could earn points via the Apple Store through Southwest’s shopping portal. But then I read the fine print:
“… not eligible on Apple iTunes purchases through the Apple Store.”
I then considered buying a gift card on the rewards portal and then using it for something I needed. Yet the selection on Southwest’s shopping portal was pretty limited. Although there were gift cards for many stores I’d love to shop in, none of those stores offered anything I was planning to buy. Nor did they match the interests of anyone on my holiday gift list. So I decided that getting a gift card would just become an excuse to stray from my budget.
There is one thing I buy every week, though, that will also keep my points alive: A meal out. My boyfriend and I dine out once a week as a special treat and as motivation to cook most meals at home.
Southwest, like many other airlines, offers a dining program: You register a card (it can be any debit or credit card in your wallet) with the airline. If you eat at one of the airline’s partner restaurants and pay with that card, you earn points.
I’d never considered joining an airline’s dining program before (I hate keeping track of rewards). But in this case, signing up provides a convenient solution for my expiring-points problem. I scrolled through the list of Southwest’s dining partners and found a place where I just so happen to have an unused gift card for. I’ll pay for part of the meal with the gift card, pay for the rest on the card I just registered, earn a few Rapid Rewards points and relax for another two years, knowing my points are safe and sound.
Oh, and because I registered my rewards card for the dining program, I’ll earn 1 Aadvantage mile per dollar spent. I also registered the card with American’s dining program. Although I don’t plan to seek out restaurants in its network, a few extra miles here and there couldn’t hurt.
Although keeping miles active is relatively easy, point expiration is frustrating. You earned those points by doing time in the air. And, unlike food, it’s not as if they’ll spoil if you let them sit around too long. Forcing you to keep points active is just the airlines’ way of getting you to spend more money (either with them or with their partners) — so don’t spend more than you have to. These tips from travel experts will help:
BoardingArea has a list of 36 odd and random ways to keep your points active, from getting an insurance quote to taking surveys.
The Points Guy recommends linking every piece of plastic in your wallet to the dining programs of every airline you fly. Once you’ve got it all set up, it’s an effortless way to earn points — and keep yours active.
If you do let your miles expire, you can buy them back. MileValue explains how.
WorldWanderlusting has the expiration polices for all major U.S. Airlines, so you won’t be surprised.
The Well Traveled Mile suggests donating miles to charity or transferring points from other programs into your mileage account to prolong the life of miles that are gathering dust.
How to convert your spouse to frugality
Earlier this year, my husband, Joe, and I got out of debt. That was a fantastic feeling, but there was one problem: We had different visions of life after debt.
I was ready to kick up our saving a few notches to create more financial security. But Joe, after years of penny-pinching, wanted to finally spend freely.
For months, we’d been at an impasse. So I went looking for advice on personal finance blogs, determined to find a way to win him over. I found some great ideas and formulated a plan.
In the end, I got lucky. He recently came across the TLC reality show “Extreme Cheapskates” and put it on our Netflix list because he thought I’d like it. I watched a few episodes one night when he was out.
A couple in one episode reminded me a little bit of a future version of us. They had a cool house filled with eclectic items probably bought at thrift stores, and the guy was really funny. He rode his bike all over town looking for loose change in pay phones and laundromats. A fan of exotic meats, he grossed his wife out when he purchased two cheap goat heads (yes, goat heads) to cook for dinner. I felt sure Joe would like him.
I asked Joe to watch the episode with me the next night. The couple talked about one of their money-saving techniques: going one week without spending any money five times a year (which they estimated saved them $700 each time). And Joe said, “That’s a great idea. We should do that!”
The next morning, as we were walking our dogs, I decided it was time to float an idea. I brought up the couple from the show and mentioned that it was interesting that they didn’t have to work since they looked younger than traditional retirement age. Then I told him I had an idea and he could feel free to say no if it didn’t appeal to him. I said, “What if we were to try to go just one year living only on your income and saving everything I make?”
I had already crunched numbers, so I told him how much I thought we could save in a year.
“Wow,” he said.
“Imagine how great it would feel to have that much money in the bank,” I said.
Then I told him that if we kept going for just five years, we could amass more than a quarter of a million dollars.
He hasn’t agreed yet, but I know he’s interested. I made a sample spreadsheet and started playing around with it so he could see what our budget might look like if we lived on one salary. I plan to give him time to think about it. I’m definitely using “soft sell” tactics here.
Are you trying to convince your partner to become a fan of frugality, too? You might consider trying these four tips for converting a reluctant significant other to a money-saving mindset:
- Start by talking about the future. “Paint a picture of the destination,” writes personal finance blogger Mr. Money Mustache, who saved lots of money and then quit his job in his 30s. When I described my idea to Joe, I focused on the good feeling of future financial security, which is more pleasant than thinking about, say, slashing our restaurant budget now.
- Talk about what savings can do for you. Both Mr. Money Mustache and Jacob, the blogger behind Early Retirement Extreme, recommend pointing out that money you spend is gone forever while cash you save can earn you more. Jacob writes that he pointed out to his wife that his saved money earns the equivalent of a full-time Wal-Mart salary, so it’s like having someone working for him for free.
- Think about what’s important to your spouse. Personal finance blogger Trent Hamm of The Simple Dollar recommends compromise. When I talked to Joe, I made it clear that I wasn’t suggesting reducing our “want money” (the amount we each get to spend on anything we want), which is very important to him. I’d be happy with a lot less mad money, but I know deferring to him on that will keep him happy.
- Make it as painless as possible. If your spouse thinks he or she will have to suffer for frugality, they’ll probably be less likely to go along with your plans. So, try not to be like the woman on “Extreme Cheapskates,” who got so mad her partner was taking a long shower that she turned off the water while he still had shampoo in his hair and then gloated about how she “made a point.” Instead, Jacob of Early Retirement Extreme recommends cooking $1 meals that taste like $10 meals and bartering or using Freecycle (an online network that lets users swap used items) to get great stuff. I’m already coming up with lists of fun free dates for Joe and me, to help us start our savings journey on a positive note.
While I haven’t yet gotten Joe to officially sign off on this plan, I think he will. And I’m excited about getting frugal again and meeting some huge savings goals.
My gift card audit: I had almost $80 lying around
Short on cash? After you’re done digging around in couch cushions and winter coat pockets, look to the gift cards hiding in the back of your wallet. You may have more money on those cards than you think.
Realizing my wallet was thick with not-quite-used-up gift cards, I decided to do an audit. So I sat down at the computer and looked up how much I had on each card. Across the eight gift cards I’d received in the past year or so, I had a total of $79.
Here’s the buried treasure I found:
- $15 on a local movie theater gift card
- $20 on a gift card to an Italian restaurant chain
- $10 on a Target gift card
- Between $3 and $12 each on a smattering of American Express and Vanilla Visa gift cards
My situation illustrates precisely why retailers, issuers and restaurants love these things. Thoughtful people buy gift cards as holiday gifts for the impossible-to-buy-for people on their gift lists. The recipients use some of the funds on the gift cards and forget about the rest. About $2 billion worth of gift card funds (about 2 percent of the money loaded onto them) went unused in 2011, according to research firm TowerGroup. That was actually down from the amount wasted in 2007, when $3.5 billion went unused. The Great Recession, it would seem, made consumers more likely to squeeze every last dollar out of their gift cards.
My gift card waste (the industry calls it “breakage”) was at about 17 percent of the original amount loaded across all my cards. How did that happen? In some cases (as with the movie theater card and the restaurant card), I used both cards once, intending to use of the rest later, but never did. As for the rest, it was a combination of tip tolerance (a frustrating practice that causes some of the funds to be “frozen” when you use the card at a restaurant and later refunded) and my own forgetfulness.
Since discovering this modest windfall, I’ve tried to use it wisely — and not as an excuse for extra spending. I took my boyfriend to see a movie we’d been eagerly awaiting for months and had already worked into our “fun” budget (it was a matinee, so the gift card covered both tickets). We will also be using the restaurant gift card for our scheduled weekly meal out this week. As for the remaining cards, I used them all for a purchase I’d been delaying for a couple months: a vacuum cleaner to replace my broken one. The cashier looked a little impatient, but I ran all six cards through, reducing a $70 purchase to just under $30.
If you suspect you have some funds languishing on gift cards, keep these things in mind:
- Your funds are safer than they used to be. The CARD Act of 2009 limits inactivity fees that can be charged on gift card funds (such fees can kick in only after the card has gone unused for 12 months) and prevents funds from expiring within five years of activation.
- You can sell the cards for cash. Personal finance blog Common Sense Millennial has some instructions for leveraging unwanted gift cards into cash or even discounted gift cards at the stores and websites you actually shop at. There are several gift card swap sites that let you do this.
Forgetting about my gift cards gave me a nice surprise at a time of year when money gets tight. Still, I’m planning to do a better job of keeping track in the future so that I can strategically let funds pile up and for larger purchases — and the occasional splurge.
Credit card deposit can lead to post-vacation stress
My husband and I (and our dogs) recently spent a weekend at a cabin in the mountains of north Georgia for some much-needed relaxation. The trip was wonderful, but one thing stressed me out: the vacation rental deposit.
The cabin itself was more like a rustic house, with two floors, a full kitchen and a huge sun porch with a hot tub. The deposit was big, too: $350.
When we checked in, the owner asked how we wanted to pay our deposit, and we handed over our credit card.
After our trip, I kept checking our credit card account online, expecting to see a credit. Days passed, then a week, and I started to get worried. I wondered if our dogs had caused some damage to the house that I hadn’t noticed. I checked the vacation rental website for information about deposits, and I saw a notice that said the money is refunded by paper check within 14 days after checkout.
I went ahead and paid the credit card bill in full. When no check arrived, I looked at our credit card account again and found a credit for the deposit amount, which caused a negative balance. I wished I had asked more questions ahead of time to save myself some hassle.
Like ours, most vacation rental deposits aren’t cheap. According to vacation rental site FlipKey.com, the typical deposit runs from $200 to $500 or more. So it pays to be vigilant when handing over that much money. To avoid problems (and stress) associated with vacation rental deposits, follow these tips:
1. Ask a lot of questions. Here are some things you should know before handing over your card:
- How much is the deposit?
- Is any part of the deposit non-refundable? For example, according to FlipKey.com, some deposits include cleaning or pet fees.
- Under what circumstances would you keep all or part of it?
- When and how will it be returned?
2. Learn the laws. According to FlipKey.com, consumers are protected by local laws that should spell out how much time the owner has to return the security deposit (usually 14 to 30 days) and under what circumstances the owner can keep the deposit. In some places, according to vacation rental company HomeAway, the owner has to provide receipts for repairs when keeping part or all of the deposit.
3. Get it in writing. Don’t rely on verbal assurances that you’ll get your deposit back. Make sure you get — and hang on to — a piece of paper that spells out the specifics of the deposit. In our case, we did get a detailed document that told how much would be charged for certain transgressions.
4. Use your credit card to pay it. The best way to pay for a vacation rental, including the deposit, is to use a credit card, according to travel site Frommers.com. Credit cards offer more consumer protections than other methods of payment, including the ability to dispute a charge — if, for example, the owner keeps the security deposit for damage you didn’t cause.
5. Check for damage when you arrive. FlipKey.com recommends doing a walk-through of the property as soon as you get in and notifying the manager or owner right away if you find damage. When we read online reviews for the cabin we rented, a previous guest had complained that the owner kept their security deposit over a couch pillow that had been chewed by a dog. The guest denied it was their dog that had an appetite for upholstery. If that was true, the dispute could have been avoided with a walk-through.
6. Be a good guest. According to RentByOwnerGuide.com, one reason owners charge security deposits is to give renters more incentive to be careful and neat during their stay. When we were at the cabin, we read the rules thoroughly and tried to treat the home as if it belonged to a friend. We even cleaned before we left. One exception: We did let our dog get on the bed, despite a warning that a fee would be charged if “excessive pet hair” was found on the comforter.
Next time, I’ll definitely follow these rules to avoid post-vacation fretting about whether or not I’ll get my deposit back. After all, a vacation is supposed to alleviate, not cause, stress.
I’ve been converted: Why I’m now an early holiday shopper
I have a friend (and don’t we all?) who always finishes her holiday shopping before the end of November. I often mocked her — and yet I wanted to be her. Sure, I’d make fun of her “Done with shopping! Good luck out there, procrastinators!” Facebook update on Thanksgiving weekend while I ate pie. But I always ended up eating my words while I was ordering gifts at the last minute and hoping they’d ship on time and trying to find parking at the mall on Dec. 24.
So this year, I decided to be my friend (instead of mock her) — and start my holiday shopping in September. It’s early November, and all my gifts are firmly decided — or already ordered. Turns out, this has saved me money, in addition to stress.
Here’s why I’m now an early-shopping convert:
Stress leads to expensive choices: When you head out at the last minute to complete your shopping, you get in the mindset of needing something, anything to put under the tree. That anxiety can lead to you putting something, anything in your cart, even if it’s more than you’d rather spend. In September, I made a list of all the people I’m buying gifts for. Over the next month or so, I jotted down ideas for gifts whenever they occurred to me. I then whittled down the list to the best ideas that were well within my budget.
That list became my game plan, and it’s a bit like having a shopping list when you hit the grocery store — which has long been a money-saving staple in the personal finance realm. As the blog Cash Cow Couple points out, having a list can prevent impulse buys and limit the amount of time you spend in the store, becoming ever more vulnerable to the sneaky signage that retailers use to get you to spend more.
There’s time to be creative and thrifty: When it’s days before the holiday party, you don’t have time to make a gift or even order one online. You’re limited to store-bought, ready-to-go stuff. This year, I’ve had plenty of time to put together a music compilation of local bands for a music fan on my list — and make a photo collage by hand.
You can make your purchases work for you: I’m getting close to my three-month deadline to spend $xxx to qualify for my new airline credit card’s sign-up bonus. The deadline is in mid-November, so the week before Dec. 25 would be too late. By moving up my shopping, I was able to use a couple larger purchases to make my sign-up bonus instead of scrambling to reach it by making unnecessary purchases.
There’s plenty of room to compare and crowd-source: By starting early, I’ve had plenty of time to comparison shop and make sure I got the best deal. Before buying someone a gift card to a day spa, I was able to read lots of online reviews and ask friends which local spas they recommended. I was also able to get multiple quotes for a custom-made gift and pick the most affordable one (which required three weeks for completion) — and not limit my options to the business that could get the job done the fastest.
So why do so many shoppers (including me for so many years) wait?
According to an October 2013 survey from consulting firm Accenture, 33 percent of shoppers do the bulk of their shopping in December (and 13 percent of those late shoppers start after Dec. 15). Being too busy to shop earlier was the most common reason late shoppers gave for their habits, followed by needing more time to save up for gifts. This December 2012 article from The Fiscal Times provides another reason: “Buy presents” is a vague goal, the type that tends to get put off. By making the goal specific (for example, “Buy Mom lilac-scented candles”), you’re more likely to accomplish it quickly. Perhaps that’s why the first step I took in my early-shopping goal (making a list) has helped me see it through.
It’s still early November, so it’s not too late to get an early start on holiday shopping. Let these tips and from personal finance bloggers help you:
Wise Bread’s Kentin Waits argues that there are still plenty of good deals to be had long before Black Friday.
Jackie at Fabulous & Frugal suggests creating a “holiday shopping” fund far in advance and then picking up items on sale throughout the year.
Frugal Rules proposes hitting garage sales and thrift stores for certain items on your list — including children’s toys. Kids won’t know the difference between brand new and used.
The Greenest Dollar points out that, if you take enough time to plan your gifts, you can not only save money, but help save the environment as well.
One Cent at a Time has a list of 101 inexpensive gifts that virtually anyone will like.
Financial Highway has some tips for using your cash-back credit cards to your advantage during holiday shopping.
When it comes to personal finances, millennials follow their friends
My parents said it, and perhaps yours did as well: “If all your friends jumped off a cliff, would you do it, too?” It was a rage-inducing line that generally corresponded with me not getting what I wanted. Yet the underlying advice is pretty solid: “Think before you follow.”
Those who don’t learn that lesson grow up to embody another clichéd saying: “Keeping up with the Joneses.” And millennials (young adults just out of college to those in their early-30s) are particularly influenced by what others buy. According to an October 2013 survey from the American Institute, 78 percent of millennials tend to model their financial decisions after their friends. Meanwhile, 66 percent try to keep up with their peers based on the neighborhoods they live in, and 64 percent base their clothing purchase on their peers’ choices. Almost two out of three millennials say they experience pressure to eat at certain places or own certain gadgets because their friends do.
Because I’m on the tail end of the millennial generation, this got me thinking about how much peers’ financial habits affect my own. I’m sure I do spend more than I would have if I lived in a Facebook-less vacuum. Seeing a cute pair of shoes in a friend’s Facebook picture has influenced me to pick a more expensive (and stylish) pair for myself when shoe-shopping. Plus, I already have a travel addiction, and being exposed to around-the-clock vacation pictures, I’m sure, fuels that habit.
The notion that constant exposure to your friends’ lives via social media causes you to spend more isn’t new. A September 2012 study from a pair of marketing professors from Columbia University and the University of Pittsburgh found a positive correlation between credit card debt and frequent social media use.
At the same time, it’s not as if I haven’t gleaned some positive money-management habits from my friends. For every vacation status update, I’ll see a “Paid off my student loans” or “Just made my last car payment” update. I talked with a friend about our respective emergency savings funds just last week (exciting, I know) and chatted with a friend about his super-frugal wedding and “saving up for a baby account” over lunch this week. Another friend explained to me how he and his wife hadn’t eaten at a restaurant in more than six months — they flip open a cookbook with their eyes closed every night and cook whatever recipe they land on. Whenever I have these conversations, I feel inspired — and that inspiration outlasts the temptation I feel when I see a nice article of clothing or a “Sitting on a beach with a cocktail” Instagram photo.
I’m sure it helps that I’m friends with people who don’t place a high value on status symbols. Those with high-spending acquaintances probably pay more to keep up with their peers. How do your friends’ money habits influence your own? Do they inspire you to save — or urge you to spend? If you’re part of the latter group, here’s some advice from the personal finance blogosphere:
The Simple Dollar points out that, thanks to how trendy thrifty living has become, keeping up with the frugal “Smiths” could replace keeping up with the extravagant “Joneses.”
Making Sense of Cents confesses a few times the “jealous monster” takes over and encourages overspending.
My Simpler Life has 20 ways to reroute the urge to spend. One of them? Surrounding yourself with frugal people.
Modest Money contemplates how the digital age pressures us to spend more by giving us a 24/7 news feed of others’ wealth and lifestyles.
Well Heeled Blog argues that travel has become the newest status symbol.
Money Ning provides advice for changing the dynamic of friendships that are costing you too much money.
Donate a dollar in the checkout line? Why I say “no”
You’re in line at the grocery store, you swipe your card to pay, and the cashier — or PIN pad — asks if you’d like to donate a dollar or more to charity. What do you do?
If you’re paying with plastic, it can be especially tempting to say yes without thinking, because it makes you look like a good person and you don’t have to dig a $1 or $5 bill out of your wallet.
But I always resist the pressure, and here are six reasons why:
- I feel put on the spot when I get hit up for a donation, with everyone in line watching, as I’m buying bread or dog food. I’m not the only one: Wall Street Journal columnist Eric Felten writes that checkout charity requests leave him feeling less than warm and fuzzy — and happiness is one of the perks of charitable giving, after all.
- I like to take time to research the charities I support, rather than just going with the one Publix picked that month. As personal finance site Kiplinger points out, it’s not exactly easy to check out a charity’s finances “while juggling the milk and bananas.”
- I don’t like to funnel my donations through a third party. I always wonder if the store takes a cut or reaps a big write-off at tax time. Charity Navigator’s guide, “The Top 10 Best Practices of Savvy Donors,” recommends eliminating the middleman and giving directly to the organization of your choice.
- I prefer to donate to smaller, local charities rather than the national heavy hitters so well represented on the checkout charity circuit. As Trent Hamm, personal finance blogger from The Simple Dollar argues, supporting local organizations has several benefits: You get to help a smaller group with fewer resources and you can directly witness the impact of your gift. That’s why I’d always rather give funds to a local animal rescue group that needs money to save a local death-row dog than, say, The Humane Society of the United States.
- I think requests for donations in the checkout lane encourage mindless spending. Does it really matter if it’s a donation to a charity or an impulse purchase? The end result is the same: You’re parted from your money without planning ahead of time. And it’s not as if donation requests only happen once in a while. I’ve been asked for contributions at least three times in the past few weeks. And as Hamm of The Simple Dollar points out, it can be harder to track your donations if you make lots of small contributions.
- Finally, I gravitate toward helping causes in more personal ways. For example, I’ve found fostering homeless animals to be the most rewarding way I’ve ever supported a cause I care about. So, maybe you hold on to your dollar at the checkout, but you give an afternoon helping at a soup kitchen or building houses for families who need shelter.
On the other hand, I can see some advantages of donating in the checkout line. For one, I’m sure these campaigns are an excellent way to raise money for worthy charities from consumers who otherwise might not have donated. Giving this way is super easy — you don’t have to look up a charity, figure out how to give and even possibly write a check and address an envelope. And it’s pretty painless, too, since you’re usually asked to kick in just a small amount.
I can see why those who donate do, but I doubt I’ll ever start doing the same.