It's already September, and hopefully, you have already seen significant improvements in your spending habits. In this month's Twelve Months To Financial Fitness Challenge, we look at shopping habits that could be hurting your budget, and smarter, budget-friendly alternatives. Shopping expenses can be challenging to keep track of and keep under control because life happens, and unexpected purchases can come out of nowhere. Join us this month as we tackle keeping your shopping spending down.
Why It’s Important
Unlike housing and other fixed expenses, shopping costs aren't always predictable or easy to keep under control. Last-minute needs may pop up, or you decide to splurge on an irresistible sale. You may not know how to track those expenditures regularly and accurately, let alone stay within a set amount each month. Uncontrolled shopping habits can lead to big-budget problems or cause you to take on more consumer debt that you don't need.
The first way to start shopping smarter is to know what you need to buy, what you want to buy, and keep track of it!
Lowering Your Grocery Bill
Because grocery shopping is time-consuming and not exactly exciting, many people shop for convenience, rather than price. They may not plan for what they need, and end up making more trips than necessary or buying food that ultimately goes to waste in the fridge. Below are our favorite shopping do's and don'ts to keep your grocery bill low.
Don’t buy pre-portioned food, such as pre-sliced cheese, or pre-made salads. The costs for the extra labor and packaging add up with not much time saved.
Do take a little time to grate and slice your cheese or put together a healthy salad with the same ingredients, but half the cost.
Don’t buy paper products, such as paper towels and toilet paper, or other home staple items at grocery stores.
Do shop for those non-perishable items at big box stores where you'll spend much less on bulk purchases.
Don’t get stuck at your closest grocery store. You may be paying a premium on your items that aren't commensurate with the time saved shopping close.
Do explore discount grocery stores and international markets offering the same high-quality items, but at a much lower cost.
Don’t go in without a plan. If you don't have a clear plan about what you need and how to use it, you can easily buy items you don't need or will inevitably expire before it gets eaten.
Do keep a running grocery list and try to shop for one week at a time. You will limit the number of extra shopping trips because you forgot something, and ensure you are only buying what you need and know you will use in that week.
Saving On Clothing
Don’t get sucked in on sales. There will always be a sale somewhere, and you will be able to find a particular item again, or something comparable, even if you don't jump on a deal immediately. If you don't need to update or replace an item, buying just because it is on sale can end up costing you more overall.
Do shop sales when shopping for clothing that you need, but beware of adding extra items just because they are cheaper at that moment.
Don’t buy full price. Whether you shop online or in stores, full-price items are marked up far beyond their wholesale cost.
Do head for the clearance and sale racks first, and don’t be afraid to go to a few stores to find what you are looking for at a lower cost.
Don’t add extra items to your online cart to get free shipping, unless those items' cost ends up being less than the shipping costs.
Do find out how much shipping costs will be before checking out to analyze whether it is worth adding another $20 or so to your final price. Most shipping costs are less than whatever impulse item you would add to your cart.
Don’t always buy "new."
Do look for well-run thrift and consignment stores that carry trending quality clothes in good condition to shop from on occasion. You can save an enormous amount of money shopping second hand and still find clothing in good shape, some even brand new with tags.
Other Smart Shopping Tips
Beyond groceries and clothing, it is easy to lose track of spending in other areas such as home improvement and maintenance, automobile supplies, or health and beauty items. Below are some easy user tips no matter what you are shopping for:
- Set a budget and stick to it. That means knowing how much you can afford to spend in a month and keeping track of every transaction. It also means putting your card down when you've reached your budget.
- Look for coupons and sales. Set aside 20 minutes a week before going shopping to make some quick online price comparisons and to see what's on sale and where. Checking prices is an easy task using a store's website, coupon mailers, or store apps.
- Take advantage of loyalty programs. By shopping at places with loyalty rewards, you can get free items and discounts just by making purchases you were already planning on making.
- Keep track of upcoming events. By spending some time looking at your calendar each month, you can get a better sense of any gifts you may need to buy or extra food and drinks for social events. By knowing what's coming, you can better stay on budget throughout the month instead of being blindsided by an unexpected expense.
For this challenge, you first need to figure out where your spending may need a little control. You may need help keeping your grocery costs down, or you may need to focus more on other shopping spending habits. You may even need an entire budget overhaul. Take some time to analyze your shopping habits over the last few months so you have a better idea of how much of your income each month goes to shopping expenses that could be lower. If your necessary shopping expenses are on track with your budget, what about your discretionary spending?
Next, pick one shopping habit to change, and commit to a financially healthier alternative. Examples include exploring different stores or websites for cheaper items, making sure to track every expense so you can see how it all adds up, or even committing to cut discretionary spending by 25 or 50%. By starting small and changing one habit, you can more easily track your spending and see the results of your new habits without getting overwhelmed.
At the end of the month, check in with your budget and see how your new habit helped and what challenges you had sticking to it. By sticking with it, you should see dramatic savings over time, and your smarter spending habits will carry over into your other budget items.
Make Informed Decisions About Your Finances
We recognize that mastering money and finances is a continuous journey. That's why we want to provide you with the tools to create a bright financial future. No matter where you are in your financial journey, there is always room to learn. Visit our Financial Wellness page for more articles and resources on a variety of financial topics.