When Saving Money isn’t Saving Money

Flip

Every spring while the flowers bloom and we pull out our summer wardrobes, Sephora treats us to the highly-anticipated, annual VIB Beauty Insider Sale.

Depending on your membership level (how much you spend annually in Sephora stores), Sephora will give you 10%, 15% or 20% off the entire store. Exciting times!

In your heightened state of elation, have you ever bought something you didn’t really want or need—just because it was a good deal?

Or have you ever been just shy of the next membership level, so you plop down your credit card and one mascara and a highlighter later (that you didn’t really need), you feel the glow of accomplishment for having reached the next level of VIB-ness? Or is that just me?

This can apply anywhere. How many clothes in your closet still have tags on them? How many unread books do you have on your bookshelf?

We all do this. It’s 100% normal. We are human, and we are driven by emotion and the idea that we are saving money. But when we can train our brains to slow down and think calmly during the excitement of a “sale,” we can avoid these unnecessary purchases that hurt our bottom line.

Saving money on things we genuinely need when they are on sale is good.

Buying things we don’t need or want just to save money when they’re on sale keeps us from our financial goals.

Would you buy the deal at full price

It’s so easy to get swayed by brand names and the latest fashions. Imagine you see a pair of Gucci sunglasses at 40% off. Do you buy them?

What if you don’t love them, but they’re ok in the style department? Is it a deal to get sunglasses at 40% off that you don’t absolutely love?

The reality is… if you don’t absolutely love your purchase, it doesn’t matter if it was expensive or cheap… it will be used a handful of times (if that), dropped into a drawer and forgotten about.

If you wouldn’t be willing to buy it at full price, think long and hard about why you would buy it at a discount.

What will it really cost you

O.k. Let’s say, as it turns out, you actually do love those 40% off sunglasses. But even with that steep discount, they cost more money than you budgeted for clothing this month. What do you do?

You’ll likely think of the immediate cost. Where is the money to buy these glasses going to come from? Or will you put it on a credit card? (Side note: This is where an impulse control system like the Cash Envelope System really helps.)

Before you swipe that card, think for a moment about the long-term cost—what will you have to sacrifice to make this purchase?

If it’s not budgeted for, it’s going to have to come from one of your other budget categories. Do you take the money from your vacation fund? Or do you decide not to put money towards saving for a house down payment this month?

Are those things worth the sacrifice of the new Gucci glasses? Maybe yes. Maybe no. In the heat of the moment, it might be hard to tell.

Ask the Sales Associate to hold the glasses for you for one hour, and go on a walk. Getting out of the situation and giving yourself a little space to think will help you get clear on your priorities.

Imagine one year in the future. Which decision will have made the most impact on your life?

If, after one hour, you are willing to sacrifice money from another area of your budget for those glasses, go back and get them. If not, walk away and never look back.

There is ALWAYS going to be a deal

Retailers do an amazing job of tapping into our primal instinct to react to scarcity.

“Limited time offer”
“This weekend only”
“Going, going, gone”
“While supplies last”

These phrases all convey a sense of urgency—that you need to act now or you will lose a unique opportunity.

But is it really a unique opportunity?

New Year’s Sale, President’s Day, Easter, Mother’s Day, Memorial Day, Father’s Day, Fourth of July, Amazon Prime Day, Labor Day, Black Friday, Cyber Monday, End-of-Year Blowouts, Close-out sales.

Sales, sales, sales… All. Year. Long.