Wise Shopping

ARE YOU BEING TRICKED INTO BUYING?

Posted on April 29, 2023 by Melissa Hart

Retailing and marketing strategies are designed to encourage you to spend more than you plan. You can avoid these tactics by being aware of the tricks used to make you buy.

  • “5 for $5” implies that you must buy five to get the deal. However, you most likely can buy one for $1.
  • Taller, narrower packages are often viewed as holding more product. Be sure to check the actual weight. Also beware of smaller packages for the same price as before, or even higher.
  • “Up to 50% off” usually means many items in the store are being sold for a discount of less than 50 percent.
  • “A small $5 fee,” instead of “A $5 fee,” may influence you into thinking that is more reasonable than it really is. Also beware of prices that exclude shipping and taxes.
  • Rebates attract customers, but not everyone submits the needed paperwork to receive the refund.
  • Many prices end in 9 to create the impression of a lower price.
  • Beware of promotions that emphasize low payment; be sure to calculate the total price.

Remember: items may not always be “on sale,” but they are always “for sale.”

For additional information on avoiding marketing tricks, click here.

Teaching Suggestions

  • Have students talk to others to obtain suggestions for wise buying.
  • Have students create a visual summary (slide presentation or video) with tips for wise buying.

Discussion Questions 

  1. What actions can a person take to prevent spending money unwisely?
  2. Describe actions you use to make wise buying decisions.    
Categories: Chapter 6, Purchasing Strategies, Wise Shopping | Tags: , | Leave a comment

ARE YOU AN IMPULSE BUYER?

Posted on November 27, 2021 by Melissa Hart

During the COVID quarantine, online buying became an addiction for many.  During this time, impulse spending increased by an estimated 18 percent.  Unplanned buying occurs when you purchase more than intended.  Or, buying extra grocery items while shopping when you are hungry. Or, a bad day at work results in a purchase to overcome anxiety.

Most spending occurs to make a person feel better. A survey reported that 72 percent of respondents reported a positive mood from an impulse buy, while 65 percent reported that an impulse buy can reverse a bad day. Others reported that they buy things to help loved ones feel better.

Three personality types are often associated with impulse buying:

  1. Sensation seekers may not consider the risks of impulse buying but desire the spending experience when they feel guilty, bored, or disengaged.
  2. Impulse buying tendency buyers are those who are aware of their behavior but don’t necessarily see it as a problem.
  3. Consumer-driven self-identity is a desire to be part of emerging trends and high-end brands to present an image of status, style, and good taste. 

To take advantage of in-person shoppers, stores make use of sensory environments, bold and graphic signage, associations between brand and positive feelings, checkout line “bonus” items, and price discounts and markdowns. Online retailers encourage buying with the use of time-based and quantity-based deals, heavily targeted social media ads, abandoned shopping cart emails, and free shipping.

Symptoms of impulse buying include:

  • you shop to feel better, which can be dangerous; find other ways to channel your energy
  • you shop to compete with buying to stay up or ahead of others
  • you’re bored; plan something else to do–go for a walk, read, write, draw, email a friend
  • your finances are suffering; track spending to avoid unnecessary purchases   
  • you have too much stuff, much of which you will never use

To reduce your impulse buying…

  • avoid temptations by unfollowing your favorite brand, unsubscribing from marketing emails, clearing browser cookies, blocking favorite sites, deleting shopping apps from your phone, and unsaving credit card information on your browser.
  • create a “fun” budget item as therapy
  • save to buy a “big” item to avoid unneeded spending
  • wait 24-48 hours before buying an item
  • try a no-spend challenge in which you buy nothing for a set number of days, weeks, or months to save money and change past habits. 
  • ask yourself: “Do I need this today or tomorrow?” If not, don’t buy it.

For additional information on impulse buying, click here

Teaching Suggestions

  • Have students talk to others to ask about any actions they take to avoid impulse buying.
  • Have students create an in-class presentation or video that dramatizes actions to avoid impulse buying.

Discussion Questions 

  1. What types of impulse buying situations have you experienced or observed?
  2. How might impulse buying affect long-term financial security? 
Categories: Chapter 6, Wise Shopping | Tags: | Leave a comment

VIN Check When Buying A Used Car

Posted on September 25, 2021 by Melissa Hart

Every motor vehicle has a unique Vehicle Identification Number (VIN), which can be used to check the registration, title, and any insurance claims. The numeric characters in the VIN indicate: the country of origin; manufacturer and division; vehicle description, safety and type of engine; the manufacturer’s security code; vehicle’s model year; assembly plant; and vehicle serial number.

Several no-cost VIN-check services are available to identify potential vehicle problems when buying a used car. This service is especially important when purchasing a vehicle online through Craigslist or eBay. A VIN-check service may also be used to obtain information on your current vehicle.

The National Insurance Crime Bureau (http://www.nicb.org/vincheck) has a basic VIN check search tool that will tell you if a vehicle has been reported as lost or stolen, salvaged, or declared a total loss after an accident. 

VehicleHistory.com offers a more complete VIN check, such as fuel economy, ownership costs, and a price analysis. Also included are the selling history, recalls, manufacturer warranties, and price estimates for the best time to buy a certain make and model.

iSeeCars.com/VIN consider 200 data points to create a car history report with a price analysis, price history, projected depreciation, and the best times to buy and sell.

As always, when buying a used car have an ASE certified mechanic of your choice inspect the vehicle. Remember, nearly every used car is sold “as is.”  Also be cautious of vehicles with flood damage that were rebuilt and had their titles “washed” after a hurricane or other major storm. These cars often encounter failed electrical systems.

For additional information on VIN checks for used cars, go to:

3 Ways To Get a Free VIN Check Before Buying a Used Car

Teaching Suggestions

  • Have students talk to others to learn about actions to take when buying a used car.
  • Have students create a visual proposal (poster or slide presentation) with mistakes a person should avoid when buying a used car.

Discussion Questions 

  1. What features of VIN-check services might help people improve the car-buying process?
  2. Describe situations in which a VIN check may be appropriate.  
Categories: Chapter 6, Wise Shopping | Tags: | Leave a comment

ELECTRIC CARS

Posted on November 24, 2020 by Melissa Hart

As technology improves, electric vehicles, also referred to as EVs, are increasing in popularity. The benefits of EV are the result of:

  • being environmentally friendly with no emissions
  • nearly silent engine sound
  • potential tax credits have been available in recent years
  • lower operating costs and maintenance expenses
  • smartphone apps to program charging times and to heat or cool the passenger cabin in advance of driving

Common concerns associated with EVs include:

  • the higher initial cost
  • short driving ranges for some models and in cold weather and on steep inclines
  • slow charging time, which are improved with new technology
  • charging stations may not always be available
  • loss of cargo space for the battery pack
  • lower towing capacities than with a conventional vehicle

The two main EV types are battery electric vehicles (BEVs) only running on electricity, and plug-in hybrid electric vehicles (PHEVs) that use electricity for a limited distance before switching to a gas-electric hybrid mode. Some models have an onboard generator to create electricity for greater driving distances.

For additional information on electric cars, go to:

Link #1

Link #2

Link #3

Teaching Suggestions

  • Have students conduct online research to determine current models, prices, and operating costs of electric cars.
  • Have students conduct an interview with someone who owns an electric car or hybrid to obtain information about the person’s experiences.

Discussion Questions 

  1. What factors should a person consider when buying an electric car?
  2. Describe future developments that might make electric cars more attractive to car buyers.
Categories: Chapter 6, Wise Shopping | Tags: | Leave a comment

Anchoring Your Personal Finance Decisions

Posted on December 14, 2019 by Melissa Hart

To spend less and save more, consider an “anchoring” system.  One example of an anchor is the price of an item to determine if that is an appropriate amount of money to spend for the item.

Anchors prevent shoppers from being overwhelmed by the many choices, prices, and features.  You can create your own anchors by:

  • setting the maximum price you are willing to spend for an item.
  • considering the value of an item in relation to the number of hours you have to work to pay for it.
  • comparing the cost in relation to another item. If you buy coffee costing $2.50 a cup and want a sweater costing $50, view the sweater as costing 20 cups of coffee. Your “coffee” anchor will help you determine how valuable the sweater is to you.

When buying a home, you may be encouraged to look at properties outside your price range.  Anchoring yourself at a price limit will avoid overspending, make you feel more in control, and encourage wiser financial decisions.

For additional information on financial anchoring, click here.

Teaching Suggestions

  • Have students talk to several people to obtain information about how they determine the price they are willing to pay for an item.
  • Have students create a video presentation that demonstrates various anchoring methods.

Discussion Questions 

  1. How might anchoring help improve personal financial literacy and money management activities?
  2. Describe anchors people might used to determine the price they would be willing to pay for an item.
Categories: Chapter 1, Chapter 2, Chapter 6, Chapter 7, Financial Planning, Wise Shopping | Tags: , | Leave a comment

Personal Finance Hacks

Posted on April 13, 2019 by Melissa Hart

Hacks – skills and shortcuts – are used in many life settings.  For personal finance, here are some tips that can help stop money leakages:

  • Only use credit cards with financial advantages, such as cashback; always pay off credit card balances on time.
  • Making weekly payments, instead of monthly, helps to save interest and reduces the amount owed faster.
  • Pay off loans/debts with the highest interest rates first.
  • You might consider paying off a debt with another loan if the new loan has a much lower interest rate.
  • When shopping online, leave the item in the cart for several days or weeks; the price may be lower or you may decide you don’t really need the item.
  • Consider bulk purchases with friends to qualify for free shipping.
  • Take advantage of seasonal sales.
  • Unsubscribe from email offers.
  • Avoid household clutter to save time and money.
  • Cook your own meals; online videos and recipes offer fast, easy meals.
  • Talk to others for investment advice.

For additional information on personal finance hacks, click here.

Teaching Suggestions

  • Have students tell their personal experience with tech, travel, or personal finance hacks.
  • Have students create a video to dramatize various personal finance hacks.

Discussion Questions 

  1. How would you decide if a personal hack will be of value to you?
  2. Describe actions that might be used to communicate personal finance hacks to others.
Categories: Chapter 1, Chapter 3, Chapter 6, Chapter 7, Chapter 8, Financial Planning, Wise Shopping | Tags: , | Leave a comment

Why Buy When You Can Rent?

Posted on December 8, 2018 by Melissa Hart

While car ownership has been a cultural milestone in our society, this tradition is diminishing with a trend toward renting or borrowing rather than owning. This situation is partially related to fewer teenagers opting to obtain a driver’s license. Also, fewer young people are buying homes, giving preference to the flexibility of renting.

The owning of “stuff” is shifting toward “decluttering” and choosing instead to rent items as needed. A strong belief that overconsumption is putting our planet at risk is driving the rise of the sharing economy. In addition, there is a growing trust to value exchanging items with “real people” rather than buying from major companies.

In addition to Zipcar, which rents vehicles by the hour, other rental business models include:

  • Ann Taylor’s Infinite Style service that allows a person, for a $95 monthly fee, to rent up to three garments at a time.
  • SnapGoods rents cameras, power tools and home appliances, such as blenders.
  • Frankfurt airport has a service that allows travelers to store winter coats when flying to warmer climates. Other businesses are considering a service to rent cold weather clothing to travelers arriving from tropical areas.
  • Since about one-third of new vehicles are leased, Cadillac created the “Book By Cadillac” program allowing a person to exchange up to 18 vehicles a year.

The many empty stores in malls create opportunities for “swap meets” and “rental fairs” for various products, using these spaces to also build connections in the local community.

For additional information on renting instead of buying, click here.

Teaching Suggestions

  • Have students locate examples of sharing economy businesses and rental companies in your community and online.
  • Have students talk to others to obtain ideas for new types of rental businesses.

Discussion Questions 

  1. What do you believe are the benefits and drawbacks of renting instead of owning?
  2. Describe actions that might be taken to determine needs and ideas for rental businesses in a community.
Categories: Chapter 6, Chapter 7, Debt, Economy, Home Buying, Purchasing Strategies, Wise Shopping | Tags: , , , , | Leave a comment

Holiday Spending Spreadsheet

Posted on November 24, 2018 by Melissa Hart

The joy of the holiday season can be overpowered with shopping stress and financial difficulties. To avoid this situation, consider this approach:

  1. In mid-to-late November, create a spreadsheet to manage your holiday spending. Categories might include gifts for family and friends, donations to charity, holiday meals along with other items such as shipping, wrapping paper, decorations, parties, and travel.
  2. Enter realistic amounts that you are able to spend for the various people on your gift list and for the other categories.
  3. Monitor your actual spending, attempting to stay within your budget.
  4. Based on this year’s experiences, adjust categories and amounts for the 2019 holiday season.

The spreadsheet might include columns for name/item, budgeted amount, actual amount, difference, and notes for future reference.  Starting earlier in the year, consider   setting aside holiday money to avoid taking away funds from your normal budget. You might also consider using credit card and other reward points for gifts.

For additional information on a holiday spending spreadsheet, click here.

Teaching Suggestions

  • Have students create a spreadsheet that might be used to monitor holiday spending.
  • Have students talk to others to obtain ideas for not overspending during the holiday season.

Discussion Questions 

  1. How would you make use of a spreadsheet for holiday spending?
  2. Describe actions that might be taken to monitor and control holiday spending.
Categories: Budget, Chapter 2, Chapter 6, Wise Shopping | Tags: , , | Leave a comment

Car Subscription Services

Posted on June 30, 2018 by Melissa Hart

The opportunity to change cars like you change clothes is now possible.  For a monthly fee, car subscription services are an alternative to motor vehicle buying and leasing.

With an upfront fee is usually involved, the monthly fee covers the car payment, insurance, maintenance, and roadside assistance.  Subscribers can manage their plan online with the vehicle delivered to your home.

Car manufacturers that offer this service are Cadillac, Ford, Volvo and Porsche. Other companies specializing in offering a variety of makes and models are Fair, Flexdrive, Clutch and Carma.

Unlike leasing for 24 or 36 months, car subscription can be for as short as a month. However, some programs require a two-year contract, and only allow a trade-in (exchange) after 12 months.

The greatest benefit is the “negotiation-free” way of obtaining a car. And, if you don’t like the car, you can get a different vehicle. Car subscribers are reminded it’s not your car.  Smoking is usually prohibited and pets should be kept in carriers.  Not all cars are brand new but most are low mileage and less than six years old.

For additional information on car subscriptions, click here.

Teaching Suggestions

  • Have students talk to two or three others to obtain their opinions on the benefits and concerns of car subscription services.
  • Have students compare cost of various car subscription services with buying or leasing a vehicle.

Discussion Questions 

  1. What do you believe are the benefits and drawbacks of using a car subscription service?
  2. Describe life situations that might be most attracted to using a car subscription service.
Categories: Chapter 6, Chapter 8, Wise Shopping | Tags: , | Leave a comment

Teaching Money Skills to Children

Posted on December 2, 2017 by Melissa Hart

Youngsters learn money management attitudes and behaviors by watching family members and others. To help guide their financial literacy development, involve children in the shopping process using these steps:

  1. Have children help in the creation of the shopping list. Sit down together with paper or an app to list what you need. Talk through your list with your kids noting items that are low on in the household as well as things bought regularly. Have children check cabinets and refrigerator to determine things they use.
  2. While making your list, talk about a budget. Explain the need to keep track of how much is spent on groceries so there is enough money for household expenses. Make clear that a grocery list helps make sure you don’t overspend.
  3. Talk while shopping to explain brands you prefer and how sale prices or coupons might affect purchases. Also communicate why you choose certain stores for your shopping.  As you select items explain why you’re buying that one instead of a similar item.  Older children can be asked to comparison shop among different brands.
  4. While shopping, refer back to your budget. This will help you decide to buy an item now or wait until a later time.
  5. Provide explanations of buying choices. To avoid surprises, estimate your total before going to the cash register. Also explain different payment methods, such as a debit card, which subtracts money from your bank account right away.

Discussion of various decision-making elements will help kids learn shopping and money management skills they will need.  Thinking out loud can clarify what you’re doing and why when in the store, paying bills, or shopping online.

For additional information on teaching money skills to children, go to:

Grocery Shopping Tips

Money skills, by age.

Teaching Suggestions

  • Have students visit stores and explain to friends why they buy certain items and brands.
  • Have students create a visual presentation (using computer software or a poster) to communicate learning experiences for teaching wise buying to others.

 Discussion Questions 

  1. What experiences did you have growing up that helped you learn financial literacy and wise money management skills?
  2. Describe other methods that might be used to teach shopping and money management skills to young people and others who might lack these abilities.

 

Categories: Chapter 2, Chapter 6, Purchasing Strategies, Wise Shopping | Tags: , , | Leave a comment

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