Spaving: A Fine Line Between Savings & Overspending
Businesses regularly use sales and marketing tactics to increase revenues and pad their bottom lines. While these offers might entice consumers, many “deals” are just psychological tricks designed to get you to spend more.
As online shopping continues to dominate the marketplace, one tactic that is hard to overcome is “spaving,” a relatively new term coined to describe “buy more, save more” sales tactics.
In this blog, we’ll explore the world of spaving, revealing how these marketing tactics work, their impact on your wallet, and how to avoid overspending in the name of saving.
What is Spaving?
“Spaving” is derived from the combination of “spending” and “saving.” It refers to the concept of spending more money to earn greater savings. One of the most popular forms of this marketing type is BOGO or buy one, get one deal.
Although it may seem counterintuitive, retailers often employ this tactic to entice customers into spending more than they otherwise would to save money overall.
Examples of Spaving
Spaving comes in many forms, but It is designed to encourage you to increase your total purchase amount. Here are some of the more common spaving-type tactics used by retailers today:
- Buy One Get One (BOGO) Deals:
Grocery stores are famous for BOGO deals, especially on overstock items. However, many retailers will offer the same incentives to encourage you to buy more, such as with clothing or accessories.
BOGO deals usually come in the form of buying one item at full price and getting another similar item at a discount. While you may save on the second item, you likely wouldn’t have purchased the additional item without a deal in place. - Free Shipping Thresholds:
Many online retailers offer free shipping once you spend over a certain amount, like $100. This offer can lead you to add more items to your cart that you wouldn’t have otherwise bought just to avoid the shipping fee. Many times, the cost of the additional items ends up being more than the shipping fee alone. - Bulk Purchase Discounts:
Businesses also offer special savings on purchases over a high dollar amount, such as “Spend $500 and save $100 on your purchase.” This practice can lure you into buying more to meet the discount threshold, resulting in buying things you don’t need.
The Downfalls of Spaving
Spaving may seem like a savvy way to save money, in theory. However, in practice, it often leads to excessive purchases that can throw your budget off track and even lead to high-interest debt if you pay with a credit card.
- Excessive Spending:
Spaving can cause you to spend more than you intended. Without the lure of a deal, you likely wouldn’t have spent $500, but the opportunity to “save” $100 can make you overspend to feel like you’re scoring a deal. - Creating Waste:
While buying in bulk may seem economical and indeed can be in some instances, it can also lead to extra waste when you buy more than you will realistically use. For example, perishable items may expire before you can consume them all. - False Sense of Necessity:
Limited-time deals can trick you into feeling urgency and convince you to purchase items now solely due to the promise of a deal. You may think, “I’m going to need this and use it eventually, so I may as well go ahead and buy it now.” But if it’s something you know you’ll use later, buying extra and engaging in unnecessary spending is likely not sensible.
Tips to Avoid Spaving
Hope is not lost! Fortunately, there are many strategies you can use to avoid the pitfalls of spaving and improve your finances. Remember, spaving is more of a psychological trick. So, if you stop and analyze the situation, you’ll often realize spending the extra money isn’t practical.
Follow these tips to avoid falling for shopping schemes and ensure better money management:
- Stick to Your Budget:
While budgeting might not be the most enjoyable task, it’s the best way to manage and grow your money. When you set limits on your spending and actively review savings goals, you’re less likely to give into impulse purchases and limited-time deals. - Only Buy What You Need:
Make a list, check it twice, and don’t deviate. Build your shopping list based on only the items you need and work to get in and out of the store quickly. The longer you linger, the more likely you are to buy more. That’s why businesses spend so much money designing the layout of their stores and the location of promotional offers – they want to grab your attention and keep you around for as long as possible. - Do the Math:
Numbers don’t lie. If you need clarification on whether something is a good deal, take a moment to crunch the numbers. Everyone has a calculator in their pocket these days. Take out your phone and do the math. Sometimes, the perceived savings may be better than they seem. - Unsubscribe From Sale Alerts:
Resisting temptation is hard when it’s constantly flooding your inbox. If you’ll have a hard time resisting the constant exposure to promotions, unsubscribe from sale notifications and unfollow businesses that spam your social feeds with advertisements. - Shop Sales Smartly:
While looking for sales and discounts is a good saving strategy, don’t let it dictate your shopping list. Add your basic needs, then check for coupons on those items. Afterward, see if any other deals will be helpful for you if your budget permits.
The Impact of Overspending & Impulse Buying
Overspending and impulse buying are bad habits that can be challenging to break. They can lead to budgeting issues, and if you use a credit card, they can result in costly, high-interest debt.
Instead, be mindful of your spending habits and focus on your actual needs. Next time you come across a sale, instead of acting impulsively, pause for a moment. Run the numbers on your phone and analyze whether you would have bought this item if it wasn’t on sale. Even small purchases can add up quickly.
CAMPUS Can Help!
Spaving is only one of the many ways that businesses try to take your hard-earned money. While shopping is necessary, you don’t have to let sales or limited-time deals derail your financial plan. You can make better financial decisions by understanding how spaving works and analyzing the situation logically rather than emotionally.
One of the best ways to limit frivolous spending is to restrict access to discretionary spending. Instead of leaving excess funds in your checking account, utilize savings options to grow your money, like Club Accounts or Share Certificate Accounts.
If you want to learn more about the various savings accounts available, we’re ready to help. Please stop by any of our convenient service center locations or call 800-367-6440 to speak with a CAMPUS Representative today.
By CAMPUS USA at 1 Aug 2024, 08:00 AM