Category Wise Shopping

Mar 1 2025

USE THE NUDGE THEORY TO CUT SPENDING

  • Useless spending can crush your savings goals.
  • The easier it is to spend money, the more likely you will spend it. 
  • Making things difficult can actually be a good thing.
  • Small changes can result in significant improvements over time.

These principles make up the nudge theory, which suggests that behavior can be shaped through small, subtle changes. Making spending harder can discourage spending and increase your financial awareness to achieve savings goals.

Adding friction to your spending activities can force you to make more deliberate purchases. To nudge your savings by reducing spending, consider the following actions:

  • Only pay cash for several weeks or months. The inconvenience of obtaining cash and keeping track of it for payments can reduce spending on frivolous items. Seeing cash in your hand can also make you more aware of its value.
  • To be more disciplined, write out a list of purchases on paper or using a notes app. While this can be annoying, it can result in immediately having more money for savings.
  • Account for all spending to avoid wasting money on silly and useless things such as empty calories and products you may not use.
  • Before making a credit card purchase, check your current account balance to help deter unneeded purchases and increased debt. 

These strategies are useful for those who are concerned about their spending and who live paycheck to paycheck. While companies make every effort to remove barriers for your spending, don’t make it simple for your money to leave you…put up obstacles.

This approach may not be for everyone. However, taking some action might save you $1,000 a year, which over ten years could be worth over $15,000 when the money is placed in an index fund or other stable investment.

For additional information on the nudge theory, click here.

Teaching Suggestions

  • Have students talk to others to obtain suggested actions for controlling their spending.
  • Have students create a podcast to communicate actions to control spending.

Discussion Questions 

  1. What aspects of the nudge theory might be useful for your money management activities?
  2. Describe actions a person might take to place barriers on their spending.   

Jan 18 2025

DYNAMIC PRICING

As you read this, prices are changing and can vary several times today. Dynamic pricing makes use of machine learning and artificial intelligence to determine changes in the costs of goods and services.

Setting prices for a product of service is an economic art to ensure a profit from the sale of each item. However, a fair price as perceived by customers is also necessary for attracting repeat sales.

Dynamic pricing differs from price gouging, which involves exploitation often because of a natural disaster (hurricane, tornado, earthquake). When an extreme need for water, food, batteries and other necessities exists, a business may radically raise prices on those items: that’s price gouging and is prohibited in many states.

Examples of dynamic pricing include:

  • Online retail prices can vary several times during a day. These variations are based on supply, demand, prices charged by competitors, the season, and clicks for an item.  The price may also vary if purchased on your phone or on your computer.
  • Fast-food businesses and other restaurants may adjust prices based on customer tracking data, demand and peak times.  Dynamic pricing can encourage customer visits on less popular days and slow times.  A backlash can occur when customers know they are being charged more during lunch than at other times of the day.
  • Ticket prices for sporting events, concerts, and Broadway shows in great demand are often higher than other events.
  • Airlines are a major user of dynamic pricing. Weekend airfares are often more expensive than weekdays as are holiday travel prices.  The fare can vary by day, location, weather, and other factors.  Flexibility of travel dates, checking online sites at different times, and viewing online calendars provided by airlines can result in savings.  
  • In addition, dynamic pricing is used by hotels, local stores, supermarkets, gas stations, car rental companies and others.

In the future, expect companies to continue to use technology to change prices many times each day. Consumers need to be smarter, shop around, and be diligent. Bottom of Form

For additional information on dynamic pricing, click here.

Teaching Suggestions

  • Have students monitor prices several times over two weeks to determine changes in an item in a store or online.
  • Have students identify online sites and apps that monitor prices to assist consumers in getting the best prices for various items.

Discussion Questions 

  1. What factors commonly affect price changes for items you buy regularly?
  2. Describe actions a person might take to get the best prices.   
Dec 7 2024

RENT-TO-OWN A CAR

For people who can’t qualify for a conventional auto loan or leasing, rent-to-own may be an option. This financing plan allows a person to rent a car with a portion of the payment going toward the purchase of the vehicle. 

The main benefits of a rent-to-own program for buying a car are no credit checks along with the opportunity to own the vehicle at the end of the rental term.  However, several drawbacks of this car-buying option usually include:

  • a higher total cost for the vehicle than for other used cars because of mark-ups for paying over time
  • requirement of a down payment
  • no warranty on the vehicle
  • more frequent payments, usually weekly or bi-weekly instead of monthly; this increases the chance of a late payment
  • may be charged a fee for late payments
  • ownership does not occur until payments are completed

Also beware of an early termination fee, which may be in the rent-to-own contract. If the car needs many repairs before the completion of payments, you might decide to end the rental. This action might result in loss of your down payment and other charges. 

Another option for a person with a poor credit history is a subprime loan; however, this would have a higher rate and result in paying several thousand dollars more in interest over the loan term. Instead of a rent-to-own car deal, become a credit union member, which may allow you to obtain an auto loan at a more favorable interest rate.  

For additional information on rent-to-own car programs, click here.

Teaching Suggestions

  • Have students talk to others to learn about actions they took to finance the purchase of a car.
  • Have students research current rates for financing a car purchase.

Discussion Questions 

  1. Why might a person avoid using a rent-to-own car buying option?
  2. Describe actions for avoiding a rent-to-own car buying option.   
Nov 9 2024

EXTREME COUPONING

With high and increasing grocery costs, coupons can save you money. Extreme couponing involves going beyond an ordinary clipping of coupons to create a plan to use coupons from multiple sources to maximize savings.

To take advantage of these savings, consider these actions:

  • Know the main coupon types. Retailer coupons may only be used at the store for which they were issued. Manufacturer coupons are issued for use when buying the product of a specific company. Try to use both types for one purchase for items on sale to achieve the greatest savings.
  • Locate coupons. In addition to traditional coupon sources (newspaper inserts, in-store flyers, store receipts, in the mail, on product packages, local coupon books), obtain coupons through apps, websites, email promotions, and loyalty, and frequent buyer programs.
  • Be aware of store policies. As you plan a coupon strategy, check for any retailer restrictions, such as the number of the same type of coupon you can use per day or if they accept competitor coupons.
  • Organize your coupons. An extreme couponing strategy requires time, effort, and planning. Review your shopping list and identify the stores where you would get the best deal on each item. You may plan a different shopping list for different stores. Sort coupons based on expiration dates. A digital coupon may allow use of the same coupon multiple times at different stores or on different dates.

Be sure to avoid two common couponing mistakes: (1) Compare prices at various stores and brands; the store brand of an item may give you a better value than a name brand item with a coupon. (2) Don’t buy things you don’t need or won’t use just because you have a coupon; use a shopping list to stay within your budget.

In addition to coupons, apps available to save money when shopping include:

  • Ibotta provides cashback offers on selected products.
  • Fetch earns points that are redeemable for gift cards.
  • PayPal Honey offers discounts when making online purchases.
  • RetailMeNot has cashback offers when shopping at over 1,200 retailers.
  • Groupon offers discounts on various services, attractions, and activities.
  • Capital One Shopping provides price alerts, coupons, and price comparisons.
  • Krazy Coupon Lady allows access to many coupon sources and current best deals.

For additional information on extreme couponing, go to:

Link #1

Link #2

Teaching Suggestions

  • Have students talk to others who have used coupons to obtain suggested wise shopping tips.
  • Have students create a visual proposal (poster, slides, video) with coupon shopping ideas and other wise buying tips.

Discussion Questions 

  1. What are the benefits and drawbacks of using an extreme couponing strategy?

In addition to coupons, what are some shopping actions for saving money?

Aug 17 2024

CREDIT DENIED?

Did you apply for credit and get turned down? Or did a lender offer you less favorable terms for credit? If so, they have to give you a notice with certain information. Improving your credit may take some time, but taking some steps will help you do it.

How to improve your credit? If your report is accurate but you want to improve your credit:

  • Know how to find legitimate help. A reputable credit counseling organization will spend time discussing your entire financial situation with you before coming up with a personalized plan to handle your money problems. They won’t promise to fix all your problems or ask you to pay before doing anything.
  • Know what negatively impacts your credit score.
    • Paying bills late. If you think you might be late on a bill, call the company you owe money to. Explain that you’re having trouble paying your bill and ask for a payment plan.
    • Keeping balances high. Credit scoring models look at how close you are to being “maxed out,” so try to keep your balances low compared to your total credit limit. Check your credit card limits — and pay down your balances, if you can. If the creditor says you were denied credit or more favorable rates because you’re too near your credit limits on your credit cards, you may want to reapply after you pay down your balances.
    • Frequent credit applications. Many scoring models look to see if you’ve applied for credit recently. If you’ve applied for too many new accounts, or taken out large amounts of new credit, it could hurt your score.

For More Information, click here.

Teaching Suggestions

  • Have students talk to others to determine how they first established credit.
  • Ask students to make a list of actions they can take to improve their credit.

Discussion Questions

  1. What factors can affect whether you can get credit, as well as the price you pay to get it?
  2. Should you hire a credit repair company to help you fix mistakes in your credit report? Or, can you do it for yourself at little or no cost?
Aug 3 2024

SHRINKFLATION AND SKIMPFLATION

Over the years, companies have raised prices through shrinkflation, in which the price of an item stays the same while the package size is reduced. A sports drink bottle is now 28 ounces instead of 32 ounces, or the “half gallon” ice cream carton is now 1.5 quarts or smaller. However, the price has stayed the same or perhaps increased. 

Other examples of companies downsizing products without downsizing prices include air-filled chip bags, smaller soup cans, and reduced size detergent packages. This marketing strategy is not new.  One of the first examples was years ago when a coffee company reduced its one-pound can to 13 ounces.

Similarly, skimpflation occurs when lower-quality materials are used in products like paper towels or cheaper ingredients in microwave dinners and restaurant meals, while prices remain unchanged. This also occurs when a hotel reduces the frequency of room cleaning or offers fewer food options for the complimentary breakfast.

While shrinkflation can be measured in government cost-of-living statistics, skimpflation is much harder to compute. If a paper towel roll costs the same with fewer sheets (shrinkflation) that will show up as a unit cost increase (inflation). However, if the paper towel roll is the same size but with inferior material quality (skimpflation), this change is not reflected in inflation statistics.

To get the best value for your money, consumers are encouraged to: (1) continue to use unit pricing to compare package sizes; (2) compare prices at several stores; (3) search online for digital coupons and rebates; and (4) read reviews of other consumers for information on changing product quality.

For additional information on shrinkflation, click here.

Video link: click here.

Teaching Suggestions

  • Have students find examples of shrinkflation and skimpflation for various products and services.
  • Have students create a visual (poster or slide presentation) that compares examples of shrinkflation and skimpflation.

Discussion Questions 

  1. Describe actions a person might take to stay aware of shrinkflation and skimpflation.
  2. How can a person assess changes in product or service quality to continue to make wise consumer choices?
Jun 22 2024

BEWARE OF FAKE ONLINE STORES

Careless online shopping can result in lost money and identity theft. Many fake companies attempt to attract and scam online customers.

To determine the legitimacy of an online store

  • Examine the URL for spelling errors, strange characters, and confirm you are on the correct website.
  • Look over the website design for poor grammar and low-quality images.
  • Click the padlock icon in the address bar; the dropdown box will tell if the site is secured with a digital certificate.
  • Use a website checker such as UrlVoid.com to inform you of any warning signs for the site.
  • Keep your browser and antivirus software updated to help identify unsafe sites.
  • Read reviews from multiple sources to confirm the credibility of the seller.

Each day, scammers create new ways to trick browsers and shoppers. Following these suggestions can help you reduce the chance that you will be a victim of an online scam.

For additional information on fake online stores, go to:

How To Spot a Fake Online Store in 6 Easy Steps

Video link:

Teaching Suggestions

  • Have students talk with others to learn about any experiences with fraudulent online shopping sites.
  • Have students create a recorded podcast with information on how to avoid fake online sellers.

Discussion Questions 

  1. What features of a shopping website have you observed that might be considered suspicious for a scam?
  2. Of the actions listed, which have you taken to prevent identity theft and online shopping scams?   
May 11 2024

THE BEST TIME TO BUY A CAR   

Car prices and availability are still being affected by the COVID-19 pandemic. Money management experts continue to recommend keeping your current vehicle. Even if repair costs are higher than what you owe on the vehicle, it may be worth getting it fixed to avoid the high prices.

However, if you plan to buy a car, to get the best deal consider the following:

  • Try to purchase a vehicle early in the week. Sunday has been the best day for a purchase, with an average savings of 10 percent off the manufacturers suggested retail price. In states that restrict auto sales on Sunday, Tuesday is the best day. Research indicates that Thursday is the worst day to buy a car.
  • Buying a vehicle closer to the end of the month may have advantages. Salespeople may be trying to make their monthly quota. View potential purchases between the 16th and the 20th of the month, and then negotiate your purchase the last two or three days of the month.
  • Some holidays that occur earlier in the month (President’s Day, Independence Day, and Labor Day) may result in better deals.
  • Some of the best car deals may be obtained at the end of each quarter of the year (March, June, September, December), especially at year end. Discounts are traditionally highest in December. The last quarter of the year can be the best time to buy a car, both new and used. December 31 can be the day to get the best deals.

Be aware that the calendar will only get you so far when obtaining the best deal. Doing online and in-person research is vital. Seek out incentives for vehicles in which you are interested. Also important, if buying on credit, is being pre-approved for a loan.

For additional information on the best time to buy a car, click here.

Teaching Suggestions

  • Have students talk to others about actions they have taken when buying a car.
  • Have students create and role play a car buying negotiation situation based on their experiences and research.   

Discussion Questions 

  1. How might a person reduce the automobile and transportation costs in their budget?
  2. Describe actions a person might take before meeting with a car salesperson? 
Apr 29 2023

ARE YOU BEING TRICKED INTO BUYING?

Retailing and marketing strategies are designed to encourage you to spend more than you plan. You can avoid these tactics by being aware of the tricks used to make you buy.

  • “5 for $5” implies that you must buy five to get the deal. However, you most likely can buy one for $1.
  • Taller, narrower packages are often viewed as holding more product. Be sure to check the actual weight. Also beware of smaller packages for the same price as before, or even higher.
  • “Up to 50% off” usually means many items in the store are being sold for a discount of less than 50 percent.
  • “A small $5 fee,” instead of “A $5 fee,” may influence you into thinking that is more reasonable than it really is. Also beware of prices that exclude shipping and taxes.
  • Rebates attract customers, but not everyone submits the needed paperwork to receive the refund.
  • Many prices end in 9 to create the impression of a lower price.
  • Beware of promotions that emphasize low payment; be sure to calculate the total price.

Remember: items may not always be “on sale,” but they are always “for sale.”

For additional information on avoiding marketing tricks, click here.

Teaching Suggestions

  • Have students talk to others to obtain suggestions for wise buying.
  • Have students create a visual summary (slide presentation or video) with tips for wise buying.

Discussion Questions 

  1. What actions can a person take to prevent spending money unwisely?
  2. Describe actions you use to make wise buying decisions.    
Nov 27 2021

ARE YOU AN IMPULSE BUYER?

During the COVID quarantine, online buying became an addiction for many.  During this time, impulse spending increased by an estimated 18 percent.  Unplanned buying occurs when you purchase more than intended.  Or, buying extra grocery items while shopping when you are hungry. Or, a bad day at work results in a purchase to overcome anxiety.

Most spending occurs to make a person feel better. A survey reported that 72 percent of respondents reported a positive mood from an impulse buy, while 65 percent reported that an impulse buy can reverse a bad day. Others reported that they buy things to help loved ones feel better.

Three personality types are often associated with impulse buying:

  1. Sensation seekers may not consider the risks of impulse buying but desire the spending experience when they feel guilty, bored, or disengaged.
  2. Impulse buying tendency buyers are those who are aware of their behavior but don’t necessarily see it as a problem.
  3. Consumer-driven self-identity is a desire to be part of emerging trends and high-end brands to present an image of status, style, and good taste. 

To take advantage of in-person shoppers, stores make use of sensory environments, bold and graphic signage, associations between brand and positive feelings, checkout line “bonus” items, and price discounts and markdowns. Online retailers encourage buying with the use of time-based and quantity-based deals, heavily targeted social media ads, abandoned shopping cart emails, and free shipping.

Symptoms of impulse buying include:

  • you shop to feel better, which can be dangerous; find other ways to channel your energy
  • you shop to compete with buying to stay up or ahead of others
  • you’re bored; plan something else to do–go for a walk, read, write, draw, email a friend
  • your finances are suffering; track spending to avoid unnecessary purchases   
  • you have too much stuff, much of which you will never use

To reduce your impulse buying…

  • avoid temptations by unfollowing your favorite brand, unsubscribing from marketing emails, clearing browser cookies, blocking favorite sites, deleting shopping apps from your phone, and unsaving credit card information on your browser.
  • create a “fun” budget item as therapy
  • save to buy a “big” item to avoid unneeded spending
  • wait 24-48 hours before buying an item
  • try a no-spend challenge in which you buy nothing for a set number of days, weeks, or months to save money and change past habits. 
  • ask yourself: “Do I need this today or tomorrow?” If not, don’t buy it.

For additional information on impulse buying, click here

Teaching Suggestions

  • Have students talk to others to ask about any actions they take to avoid impulse buying.
  • Have students create an in-class presentation or video that dramatizes actions to avoid impulse buying.

Discussion Questions 

  1. What types of impulse buying situations have you experienced or observed?
  2. How might impulse buying affect long-term financial security?