Cutting back on overspending

Whenever there’s a big sale event, like the upcoming Black Friday sales, it can be tempting to go on a shopping spree while products are discounted.

However, this can be a slippery slope and you may end up purchasing items you don’t need simply because they’re cheaper than usual.

Fortunately, there are tips and tricks to help you shop smarter and get the most out of the sales.

Plan your purchases in advance

There are times of the year, like Christmas and birthdays, where you’re likely to buy gifts for friends and family. By leaving these purchases to the last minute, you can wind up paying full price for something that you may have been able to get for less if you’d bought it earlier.

That’s why planning ahead for these key dates can be a great way to trim costs. By laying out all the special occasions in your calendar, you can make more informed decisions.

If you see something for 50% off and it’s the type of gift you were planning on buying someone who has a birthday in three months’ time, you can take advantage of the discount and tick that person off your list.

Set a budget

Even if you’re shopping during sales, your budget can still blow out if you’re not aware of your spending. One simple step you can take is to set a limit before you start shopping.

In order to come up with this amount, you’ll need to decide how it factors into your overall budget. If this isn’t something you’ve done before, it’s best to sit down and look at your finances broadly, rather than choosing a number at random.

You can use this budget planning tool to help you get started. It lets you log your income and compare this with your living expenses and other costs to help you set a budget. If you struggle with budgets, you may want to think about bucketing your money.

This is when you set up different bank accounts (called buckets) and use each one for a specific reason, such as bills, shopping and savings. This makes it clear how much money you have in each bucket and what you can afford to spend.

Track your spending

Nailing down a budget is a great start but to ensure you stick to it, you’ll need to monitor your spending.

Tracking your spending categorises your transactions but also allows you to see where your money is going and get a big picture view of your purchasing habits.

Over time, you’ll be able to identify patterns in how you’re using money and make better financial decisions.

Consider how you’re going to pay

Something else to think about is how you’ll pay for your item. Doing this ahead of time means you’ll have a better idea of your cashflow in the lead up to expensive periods of the year like festive season.

If you’re planning on heading to the shops, you can add your card to your digital wallet making it quick and easy to go cardless and make payments with your smartphone.

If you would like to split your purchases into instalments rather than paying the entire cost upfront you could consider Buy Now Pay Later services, which allows you to split purchases into four equal repayments. You just need to make the first repayment at the time of purchase and the following three repayments are due each fortnight from then. You’ll be notified as they approach.

Be conscious of where you shop

Choosing where you make purchases is also important. With so many options available online, it can feel like a straightforward decision – find the product you want for the lowest price.

However, take steps to ensure you’re shopping safely. Sometimes this means you might have to do some extra research, but it’s worth investing the extra time for peace of mind. This research could include:

• comparing prices with other websites (sometimes if it sounds too good to be true, it might be)
• reading reviews of the website
• checking if they have legitimate social media accounts
• reviewing their refund policy.

This will normally allow you to make a call on whether the website is a genuine one you can trust. If you follow these steps and still aren’t sure, you may want to be cautious and stick with a store you’re comfortable with.

Source: NAB
Reproduced with permission of National Australia Bank (‘NAB’). This article was originally published at https://www.nab.com.au/personal/life-moments/manage-money/budget-saving/spend-smarter-shop-safer
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