Consumerism is an addiction for our society.
We consume products, food, things… at an alarming rate.
If you don’t understand consumerism and how to get out of the trap, it will affect you in every other area of your finances and your life.
How do you set yourself apart? How do you not let consumerism take advantage of you? And how do you become a savvy shopper? Well, here’s how…
The Road to Savvy Consumption
From credit card offers to coupons in the mail (or email), we are constantly hit with marketing. Marketing is everywhere. It’s all around us, all the time, and it always will be.
Marketing exists to get us to buy, buy, BUY! And that’s okay, because that’s how business works, but it’s up to us to buy intelligently. And it can be done, even if you’re an American.
We Americans get a bad rap due to our overspending and luxurious lifestyles that we can’t actually afford. It’s true, most Americans who look rich aren’t. Who wouldn’t want that new Mercedes with no money down and 4,000 easy payments of $500? As long as we can afford the monthly payment, it’s ours right? Well that’s a topic for another article, but it is possible to live within your means and be a savvy consumer, even if you do live in the “Land of Opportunity.”
In fact, I’m going to show you how to be a savvy consumer. More importantly, I’m going to show you how to take advantage of marketing campaigns without being taken advantage of by them. Are you ready? You’ve got this…
Change Your Thinking
I’m sure you’ve heard that before, just change your thinking. That’s the difference between the rich and the poor, right? Well yes and no, but thinking alone won’t do anything for your spending or your finances – there has to be action involved.
When I talk about changing your thinking, I mean don’t be fooled by marketing techniques. Learn how to spot them and take advantage of them. You need your marketing guard up constantly. Always be on the lookout for someone trying to get you to spend money, because honestly, there will always be someone trying to get you to spend money.
Let’s get into a practical example of what I’m talking about…
Paying $47 for a New Computer
Do you remember those deals that used to be everywhere on the internet?
“Get this new laptop, iPod, or other new electronic item for free. Click here now!”
Those ads were everywhere, so finally I decided to check it out. I didn’t believe the ad (at least not without some kind of catch), but I did want to know what was going on, so I clicked the banner. If you’ve ever clicked on one of those banners, you know how it works. You complete a certain amount of offers and they send you your free item. Not as easy as it sounds? Of course not, but I knew that it couldn’t be a flat out lie or the ads would have been taken down a long time ago and there certainly wouldn’t be so many.
So I tried it out. My wife and I sat down at the computer for a few hours to see what this deal was all about.
Here’s what happened…
We signed up for 14 different “free” offers. Now some of these offers required shipping, handling, or processing charges (I guess they don’t really understand what “free” means), but overall I suppose the offers were kind of “free.”
Now, I’m not a lawyer by any means, but I know how to read the fine print and I did… with every single offer. It turns out every offer we signed up for would begin charging us after a certain time period (monthly subscription, reoccurring product shipments, etc.), so we made a list of the following for each “deal” we signed up for:
- What we signed up for (product, service, etc.)
- How to cancel it (who to call, where to go, etc.)
- The date to cancel by (before we got charged)
- The account information (login, password)
After all of this was over, we got our free computer. It was worth about $1,200 at the time (I looked it up) and we paid a total of $47. When the dates came, we cancelled everything. Only one of the accounts had some sort of error and charged us for something else, but one phone call took that charge off and left us with a laptop after paying the $47 and putting in a few hours of work (including cancellation time, reading the fine print, and signing up for the offers). It took about eight hours in total.
Why did I tell you all of that?
Because offers like this are meant for people who won’t cancel the stuff they sign up for. We calculated how much it would have cost us if we would have kept everything and not cancelled the trials, subscriptions and products…the grand total? Around $600/month. Sounds crazy, right? How many people signed up for those offers, possibly got the laptop and continued paying the $600/month? Probably a lot. That’s why they do things like that. It’s for the people who are completely unaware of their spending and finances in general.
How many people are still paying for subscriptions, “free trials,” even gym memberships, and not using them? I’m not just talking about the people who completed the laptop offers.
It takes discipline and organization to pull off actually getting a free (or $47) laptop and most people don’t have either of those things when it comes to money. The companies know that, but that’s okay, because that isn’t you or me – we are savvy.
It Doesn’t Have to Be Worth $1,000
The laptop was an extreme example of how to be a savvy consumer, but you can apply this to every area of your life. We are a family of seven, so something even as minuscule as dinner needs to be planned out strategically to be the most savvy consumers we can be… without spending hours trying to save a few bucks, of course.
How does that work? We always have a plan.
Here’s an example. When our kids wanted McDonald’s while we were in the States, we decided to make it happen (we rarely eat fast food). So we went to McDonalds and spent about as much as we would at a sit-down restaurant, right? Nope. We bought all the cheeseburgers from McDonalds for about $8. Then I went to the grocery store and bought a 50 cent bag of fries (that the kids actually prefer over Micky D’s fries) and cooked them at home. What about the soda? Did we drink water because it’s healthier and cheaper? Heck no! This was a fun meal and a rare occasion for us to east fast food, so I decided to “secret shop” the sodas.
Total cost of a fast-food meal for six: “$8.50”, but not really…
I know I just kind of slipped the secret shopping thing in there, but basically I am signed up for several secret shopper websites, so I constantly get emails about shops around me. I had an email to get free sodas from a local store as a secret shopper so I chose that day to do it. By the way, I actually got paid $15 to buy those sodas…
Actual total cost of a fast-food meal for six: “-$6.50.”
Yes, we got paid to eat dinner. That’s not normal.
And that’s my point. Don’t be normal. Be savvy, which is anything but normal.
The 7 BEs of Savvy Shopping
Don’t fall for the tricks and gimmicks – take advantage of them. Figure out what you can take advantage of by being a savvy consumer. Once you know what the marketing goal is, it’s usually easy to spot how it can be of use to you, as long as you don’t fall for the actual gimmick they’re expecting you to fall for.
BE savvy. Here are the seven BEs to being a savvy consumer:
1. BE an Intelligent Money Saver
The main purpose of coupons is to get you to buy a bunch of other stuff you didn’t have coupons for. If you find a great coupon, have a plan and stick to it. Don’t be wooed by advertising, stick to your plan. And calculate how much time you’re using with coupons. It’s not worth saving $30 or even $50 if it’s costing you 10+ hours per week. Your time is more valuable than that.
2. BE a Skeptic Who Takes Action
When you’re given the opportunity to get something for free or cheap by sitting through a sales pitch (such as a timeshare pitch – does that bring up any bad memories?), have a plan ahead of time. Don’t go to the resort to get a free ticket for Disney World and spend $50,000 on a timeshare that you didn’t even know existed an hour earlier.
Decisions like that take weeks, months, or years to make. You should never make an on-the-spot decision, and especially not for a free prize that would have cost you less than a hundred dollars. If you can’t control yourself, just go buy the ticket, trip, or whatever you’re getting.
3. BE Quick to Look, But Slow to Act
Always be on the lookout for opportunities to benefit from, save money, or make money, but make sure you fully understand everything you’re doing before diving in head first.
Don’t be afraid of missing an opportunity by waiting to make a decision. It’s better to miss something, than to get into something you shouldn’t have.
For example, we went to a sales pitch at a Direct Buy once. If you haven’t heard of them, they’re supposed to be a wholesale company. You pay a huge fee to become a member, but then you supposedly get such great deals on furniture and other home items, it pays for itself. It doesn’t. It’s overpriced, their stuff isn’t that cheap, and their selection is limited. The thing is, you have to make your decision to join or not before you leave the sales pitch. They’ll tell you that you won’t be allowed to come back later and sign up. That’s a sign. If you can’t sleep on it, you don’t want it.
4. BE Mindful With Your Money
Never make a purchase without taking two seconds to ask: do I really need this and is this the best price for this item? How many purchases have you made, only to go back a day later and realize you overpaid? That’s why buyer’s remorse laws exist.
It may or may not be worth finding a coupon or a better deal, but the important thing is to take the time to ask the questions I just mentioned.
5. BE an Intelligent Traveler
Traveling can be expensive, but it doesn’t have to be. Be a smart and savvy vacationer. There are plenty of options out there to book cheap resorts, swap homes, and find cheap tickets. That may mean traveling during offseason, but what’s more important: booking a specific week or saving enough money to take two vacations for the price of one?
6. BE a Planner
Savvy consumers plan ahead. Period. From meal planning to vacation planning, it helps to be ahead of the game. When you go grocery shopping, you should have a list, stick to it, and everything on that list should be for a specific meal.
When you shop for clothes, keep a list of the things you need and the things you already have too many of. It’s hard to fall for marketing and advertising gimmicks, when you walk into a store knowing exactly what you need. The more you plan in advance, the less you spend.
7. [Don’t] BE Sold on Spending Money
It’s easy to fall into the trap of thinking you have to spend money to have fun. It’s quite often the opposite. Generally the more expensive something is, the less quality time it produces.
Think about it: movie theaters and amusement parks are fun, but how much time are you really spending with your family? Some of the best things in life really are free.
What it Means to Be Savvy
Being savvy is a mindset – a lifestyle really. It’s not about clipping coupons, pinching pennies, or never spending money, it’s about being mindful of your spending and prioritizing what really matters to you. “Savvy” translates to “aware”.
My wife and I aren’t impressed by fancy cars, so we don’t drive fancy cars. We’re not impressed by big houses, so we didn’t buy a big house. We prefer to spend our money on nice vacations, so we do. But what is it for you? What are the most important areas for you? Define them and focus on them. That’s where your money should be going.
Now go out there and BE a savvy consumer.
Further Book Reading
- Dollars and Sense by Dan Ariely & Jeff Kreisler
- I Will Teach You to Be Rich by Ramit Sethi
- Predictably Irrational by Dan Ariely
- The Paradox of Choice by Barry Schwartz
- Payoff by Dan Ariely
