Tag Archives: wise buying

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.   

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?

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 24 2018

Holiday Spending Spreadsheet

The joy of the holiday season can be overpowered with shopping stress and financial difficulties. To avoid this situation, consider this approach:

  1. In mid-to-late November, create a spreadsheet to manage your holiday spending. Categories might include gifts for family and friends, donations to charity, holiday meals along with other items such as shipping, wrapping paper, decorations, parties, and travel.
  2. Enter realistic amounts that you are able to spend for the various people on your gift list and for the other categories.
  3. Monitor your actual spending, attempting to stay within your budget.
  4. Based on this year’s experiences, adjust categories and amounts for the 2019 holiday season.

The spreadsheet might include columns for name/item, budgeted amount, actual amount, difference, and notes for future reference.  Starting earlier in the year, consider   setting aside holiday money to avoid taking away funds from your normal budget. You might also consider using credit card and other reward points for gifts.

For additional information on a holiday spending spreadsheet, click here.

Teaching Suggestions

  • Have students create a spreadsheet that might be used to monitor holiday spending.
  • Have students talk to others to obtain ideas for not overspending during the holiday season.

Discussion Questions 

  1. How would you make use of a spreadsheet for holiday spending?
  2. Describe actions that might be taken to monitor and control holiday spending.

 

Jun 30 2018

Car Subscription Services

The opportunity to change cars like you change clothes is now possible.  For a monthly fee, car subscription services are an alternative to motor vehicle buying and leasing.

With an upfront fee is usually involved, the monthly fee covers the car payment, insurance, maintenance, and roadside assistance.  Subscribers can manage their plan online with the vehicle delivered to your home.

Car manufacturers that offer this service are Cadillac, Ford, Volvo and Porsche. Other companies specializing in offering a variety of makes and models are Fair, Flexdrive, Clutch and Carma.

Unlike leasing for 24 or 36 months, car subscription can be for as short as a month. However, some programs require a two-year contract, and only allow a trade-in (exchange) after 12 months.

The greatest benefit is the “negotiation-free” way of obtaining a car. And, if you don’t like the car, you can get a different vehicle. Car subscribers are reminded it’s not your car.  Smoking is usually prohibited and pets should be kept in carriers.  Not all cars are brand new but most are low mileage and less than six years old.

For additional information on car subscriptions, click here.

Teaching Suggestions

  • Have students talk to two or three others to obtain their opinions on the benefits and concerns of car subscription services.
  • Have students compare cost of various car subscription services with buying or leasing a vehicle.

Discussion Questions 

  1. What do you believe are the benefits and drawbacks of using a car subscription service?
  2. Describe life situations that might be most attracted to using a car subscription service.
Aug 26 2017

Vending Machines for Cars?

Believe it or not, you can buy a car from a vending machine.  Carvana has created an eight-story high glass structure holding 30 cars. The online auto retailer opened its first vehicle vending machine in Nashville, Tennessee, and also has locations in Austin, Houston, and San Antonio, Texas. Payment, financing, and trade-ins are arranged online.  Free delivery is offered in the areas served.  However, buyers have the option of receiving an oversized Carvana coin to drop in a slot to automatically move the car to the delivery bay ready to drive.

For additional information on Carvana, click here.

Teaching Suggestions

  • Have students search for a website or app related to car buying services that was not available a few years ago.
  • Have students talk with others about their car buying experiences. Ask students to propose an app or website that would improve car buying activities.

Discussion Questions 

  1. What benefits are associated with this type of motor vehicle buying process?
  2. Describe common mistakes people might make when buying a motor vehicle?
Dec 3 2016

Reducing Impulse Buying

All buying decisions fall into two categories: (1) items we need; and (2) items we want. Financial difficulties often occur when the categories are blurred. People try to convince themsleves that things they WANT are things they NEED, when often that is not the situation. Our true needs involve a fairly short list:  food, air, water, shelter, health care (including health insurance), clothing, and maybe…Internet access.

However, Internet access can be basis of our financial troubles. Time spent browsing online can result in many unneeded purchases.  How might you avoid this?  The following suggestions are offered:

  • Don’t buy an item right away. Delaying a purchase allows you to consider the value more carefully.
  • Review the purchases you delayed for at least a month to determine if the urge to buy the item still exists, and if the money is available.
  • Delete from your “wish list” any items that you no longer desire to buy.
  • Consider returning an item, as allowed, when the purchase does not meet your expectations.

For additional information on reducing impulse buying, go to:

Link #1

Link #2

Teaching Suggestions

  • Have students describe purchases that might have been avoided using the suggestions above.
  • Have students talk to others to create a list of methods to reduce impulse buying.

Discussion Questions 

  1. Why are some people continually involved with impulse buying?
  2. What are the short-term and long-term financial consequences of impulse buying?
May 28 2016

Ways to Reduce Environmental Impact and Save Money

To save money and help improve the environment, 20SomethingFinance.com suggests that you:

  • grow your own food and buy from local sources.
  • replace meat in meals with beans and vegetables.
  • bring your own containers to buy bulk items.
  • use refillable drink bottles.
  • ride a bike instead of driving.
  • use a low-flow showerhead.
  • sell items not being used; buy used items instead of new.

For additional information on saving the environment and money, click here.

Teaching Suggestions

  • Have students ask people to describe environmental-saving actions commonly used.
  • Have students create a promotional plan to create awareness of money-saving actions that are also environmental friendly.

Discussion Questions 

  1. What are benefits and drawbacks of environmental-saving actions?
  2. What factors might be considered when taking actions that save money and improve the environment?
Mar 7 2015

THINGS NOT TO BUY

To avoid wasting money, financial experts suggest cutting back on items that might not best serve your needs, such as:

  • cable television, since there are less expensive alternatives such as online streaming, which save a person over $800 a year.
  • name-brand razor blades costs can be reduced by using a membership program or by shopping at a discount retailer.
  • bottled water costs can reduced by using a home purification system.
  • USB drive costs can be reduced with the use of cloud storage.

For additional information on wise buying, click here:

Teaching Suggestions

  • Have students talk to others and create a list of items on which money is often wasted.
  • Have students suggest lower-cost alternatives for various items that are purchased regularly.

Discussion Questions 

  1. What actions can be taken to find low-cost alternatives for items that are purchased frequently?
  2. Explain short-term and long-term financial benefits of saving money on items that are purchased frequently.
Nov 26 2014

Trick yourself into saving

Saving money can be automatic with some simple actions that would reduce your monthly spending.  Some actions, which can include lowering your monthly cash outflows by as much as $400, include:

 

  • Using a programmable thermostat which can be used to automatically raise and lower the temperature in your home, resulting in energy savings.
  • Increasing insurance deductibles for your home and auto insurance which will likely result in an annual savings of several hundred dollars.
  • Practicing less aggressive driving; using a constant speed can save money on fuel costs.
  • Seeking out ways to reduce your communication bills, such as using basic cable along with streaming video on your computer. Also, using a free texting app on your phone.
  • Using a refillable water bottle can save hundreds of dollars by not buying bottled water.

 

To ensure that you actually save this money, each month, have funds automatically moved into a savings account or investment program.

For additional information on saving, go to:

http://www.bankrate.com/finance/video/saving-money/trick-yourself-into-saving.aspx#ixzz3IKDG71pN

Teaching Suggestions

  • Have students conduct online research to determine various actions to reduce spending and increase savings.
  • Have students interview several people to determine various actions that might be considered for reducing spending.

Discussion Questions 

  1. What actions have you taken to reduce spending and increase savings?
  2. Explain short-term and long-term benefits of reduced spending.