Published on December 1, 2018 2:12 pm, by Pete Lalor
Most spending in the Shopping category is Lifestyle related, therefore discretionary and so there will be lots of opportunities to spend less and save more. Our key tactics for spending less on Shopping are:
Stop spending on things you don’t need or you can do without
We all spend money on things we don’t need or we can do without. We do it for a lot of different reasons. Think about the things that trigger you to shop and what strategies you can put in place to offset those. Examples include:
If you want some more reading about why you shop the way you do, check out this article: https://www.moneybrilliant.com.au/blogs/cognitive-biases-and-how-they-affect-our-financial-decisions/
Getting the best deal you can
When you do need to (or you decide you want to) buy something spend less by getting the best deal you can. This will mean doing your research, being aware of all the purchase options you have and using a few spending hacks where you can.
Doing your research usually involves some online searching – Google is probably the best option for this, but you might also try online catalogues on sites such as Lassoo. A simple approach is to find the best price you can and then go to a retailer with a Best Price Guarantee and see if they will give you a better deal.
Our favourite spending hack is to use discounted gift cards to make your purchases. You can usually purchase gift cards from through rewards programs at a discount of 5-10% with a little bit of effort.
Clothes & Shoes
Be really clear on whether you actually need to spend more on Clothes & Shoes. Often fewer things and more planning give better results than lots of ad-hoc spending. There are great resources available to help you with planning your wardrobe, like these https://womens-fashion.lovetoknow.com/Basic_Wardrobe_Planning, https://www.becomingminimalist.com/declutter-the-closet/ and
When you really do need to buy Clothes & Shoes here are our tips for spending less:
Electronics & Software
Electronics manufacturers seem to have many of us on an upgrade treadmill convincing us to upgrade every year or two the latest version of whatever they make. You can probably spend less by challenging yourself about whether you really need the latest phone, tablet, computer or software package. The fact is many of us don’t make use of the features available in the electronics and software products we already have so we may not get much use from new features either. Often we can just do without, or at least do without an upgrade for at least 1 or 2 upgrade cycles.
If you decide that you do need to spend on electronics or software make sure you get the best deal you can. Our tips for spending less are:
JB HiFi is generally our pick software and electronics for their product range and their Price Matching policy.
Electronics retailers and software manufacturers often have discounted student or academic licenses. If you have a student in the family take advantage of these special prices. As an example, you could pay $739 for Adobe Acrobat Pro 2017 or if you had a qualifying student in the family you could pay $169 for the Education version!
Another great option for software is to see if there is a free alternative to what you are looking for. For example, if you are looking for an Office type application (Word Processor, Spreadsheet, Presentation package) you could $199 pay for MS Office Home & Student 2019 or you could use the free Open Office alternative.
If your employer is willing to let you salary sacrifice electronics you may be able to save a lot by using it to purchase a laptop or mobile phone. Under certain circumstances, these will be Fringe Benefits Tax (FBT) free and your employer may also pass on the GST to you as a saving. You can get more details about these arrangements from the ATO web site.
Whilst it might not look like much, all these tactics can add up to a significant saving on retail prices. For example, if you were buying a new laptop and waited for it to be on sale at say 15% off the retail price (not unusual for some laptop brands at JB HiFi) and then paid with discounted Gift Cards a $1500 laptop would cost you about $1211. If you were able to salary sacrifice the laptop through your employer it could be up to 50% cheaper again, depending on your marginal rate of tax.
There are some easy ways to avoid spending on books, but still enjoy the pleasure of reading. The key tactics are:
When you need to spend on books there are also some easy ways to spend less. These include:
In our experience, new releases are cheapest at Big W & K-Mart.
Whether it’s online shopping or in-person shopping the rules are much the same:
Also, don’t assume that just because you are buying online you are getting a good deal. We’ve seen plenty of examples where items on eBay, for example, cost significantly more than the same item through a major retailer. There is no excuse for not doing your research and shopping around.
Homewares can be such an easy category to spend in. There are so many options for sheets, towels, cushions, pictures, and knick-knacks that promise to make you feel happy and comfortable in your home.
If you love to shop for Homewares we suggest setting a budget and sticking to it. If you think you spend too much, then before you buy take a look around your home and see if you really need what you have your eye on.
Techniques to spend less on Homewares are similar to other categories above:
And when you have found an item that you have to have, shop around, find the cheapest price and as always see if you can access an eGift card to get an extra 5-10% off.
Jewelry is a discretionary category. Any money you spend here is a pure accessory “want” decision. So if jewelry makes you happy and you have budgeted in the money, then our recommendation is to find the best quality you can at the lowest price. If you think you are spending too much on jewelry though, you might want to try some techniques to spend less:
And when you are happy to go and spend some of your hard-earned cash on jewelry, then we suggest shopping around. If you’re going to buy some, make sure you will wear it. And always ask for the jeweler’s best price, often they will negotiate.
If you want to spend less at the Newsagent our advice is to simply stop! These days there isn’t really much that you need to buy at Newsagents (which is why many of them are going out of business, unfortunately). Our tips are:
If you are buying lottery tickets then stop. The fact is your chances of winning are infinitesimally small and you’d be better of saving the cost of the lottery tickets.
If you are buying newspapers then stop. You can get newspapers online – on your phone, tablet or computer. Some are completely free, some now have “pay walls” and some of these are easily avoided. Here is one approach to doing just that. If you don’t want to that there are plenty of other free news sources such as the ABC.
If you’d like to spend less on newspapers and magazines but still be able to read them, you may wish to consider alternatives:
And of course, if you do have a subscription to a publication but you’re finding that you don’t read it so much anymore, it might be worth canceling and buying when you will read it.
Peter is the CEO of MoneyBrilliant. He has over 20 years experience in banking, insurance and accounting. Peter has three sons, ranging in age from 16 to 3, is a sport and fitness fanatic and a volunteer firefighter. He is passionate about improving people's lives through making financial services more accessible.