The Amazon Prime Day is just underway and Raj, a 25 year old working in an engineering firm can’t keep his cool. He does not have any strong appetite for speakers, but this ‘Prime Day’, he bought a headphone and speaker. That may sound okay to you but he has two brand new speakers at perfect working condition. Raj is just one of the many people who go through the phase of impulsive shopping during the sale days.
Everyone loves a good bargain. We are wired to look for the best deals. Now, we don’t have to argue with the seller but just wait for the Prime Days and Big Billion Days. While buying things on sale can help us to save money but there are other adverse impacts of the sale on customers and their behaviour.
On careful inspection, you will find that instead of saving money, you have spent more money and energy on these deals.
Online shopping sites give huge discounts on their products. However, we forget that we need to first buy the product to avail the discount. That means, we have to first shell out money to save some money.
Buying necessary things that you need on online platforms is absolutely fine. But the problem arises when you buy things that you don’t need or would not have possibly bought if it was not on discount. Raj was tempted by the offers given by these sites and bought two speakers even though he did not speakers in the first place. He would not have thought of buying an extra speaker if it was selling at MRP.
The slashed price give an impression that a quality product is within his reach and it creates a false sense of urgency. Although he got offer, he shelled out money to buy the things which was available on discount. After the purchase, Raj felt that his move was an intelligent one while it actually wasn’t. He was fooled into buying the speakers that he actually didn’t need.
Practice mindfulness. Understand what you actually need to buy.
Sale begins mostly during the festive season. To understand what you need, make a list of the things that you plan to buy during the sale season. Try to make the list one month or a few days in advance. If you feel the absence of that particular gadget or product at least three times in a month, then keep the thing on your list. Or else, you need to chuck it.
Ask yourself if you would buy the same thing if it was not on sale. If not, then it is not worth wasting money just to get an offer.
Set a budget on how much you are going to spend during the sale. Shopping is fun but it is just for a few moments. Retail therapy does not last long. What if there were a better alternative than shopping during sales?
Investing can help you buy things that you would not have dreamed earlier. Investing can help you buy the latest iphone, your dream car and your dream house. All you need to do is save money and be disciplined. To save money and achieve big dreams, you would have to make a few sacrifices which include mindlessly buying things.
Let’s see how much you would earn if you don’t spend and invest the same amount. Let us take that you spend an average of Rs.12,000 per year on clothes. Instead of spending, you invest the same amount in equity mutual funds at an average rate of 12%. If you do it for five years, your investment corpus will grow to Rs.78,500. But that is just on paper. Curbing your buying appetite will have a snowball effect on your personal finance. When you start to see the benefits of investment or see the growth in your investments, you will save more which will only add to your investment corpus. This will help you to fulfill your financial goals and live a more meaningful life.
Online shopping may be helpful but you need to help yourself first and take the right steps.
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