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Expert Tips for Budget-Savvy Online Shoppers
Large retailers offer online shopping savings and specials year-round, making it tempting to overspend. Here are three tips to keep your budget top-of-mind while making purchases online.
Scroll. Tap. Purchase. Shopping online has become second nature. However, it can be more challenging to track online spending—two in five Americans say the ability to shop online has made it harder for them to stick to a monthly budget. Couple that convenience with heavily advertised online saving events from retail giants, and you might outspend your budget before you even realize it.
Financial wellness experts at Greater Nevada Credit Union have a few tips to help you maintain healthy spending habits and achieve your budget goals while purchasing items online.
1. Identify “Needs” Versus “Wants”
Retailers create online shopping experiences that motivate you to buy more. Think about the videos you see praising a product’s benefits or about the ease of purchasing something with just one click or tap. The online shopping experience is designed to entice you to make impulse purchases and buy items you may not need.
Before browsing online—or in your social media feeds—be mindful of your budget and assess your needs versus wants. If you haven’t created a budget yet, explore GNCU’s budgeting calculator or browse free financial education resources, including budgeting courses.
Identify the online purchases you’re looking to make that fall into the “need” versus “want” categories. Needs are basic things you need to live, such as food, shelter, utilities, healthcare, and transportation. It’s alright to spend on wants as long as there’s room in your budget after your necessary items are paid for. In fact, budgeting for fun purchases you will enjoy can be part of budgeting successfully in the long term. However, there may be times when reducing spending on your wants will allow you to achieve your financial goals.
Considering your needs and wants will help you stay on track to achieving your financial goals while still enjoying the convenience of making purchases from the comfort of your couch.
2. Research Buy Now, Pay Later Options Before Using One Offered by an Online Retailer
The Buy Now, Pay Later options offered by several online retailers are also known as point-of-sale (POS) loans. Various companies offer these loans, including popular providers such as AfterPay, Affirm, and Klarna. These give you the option to pay off purchases with bi-weekly or monthly payments over a set period until the balance is zero. However, some Buy Now, Pay Later Loans may charge up to 36% interest and add fees for late payments. Some loan providers do not charge interest or fees, so ensure you understand the terms.
If your online cart is loaded with high-priced items like furniture or home appliances, the Buy Now, Pay Later option can be tempting. However, before deciding to use this option, it is important to know that these loans can impact your overall credit score. It’s also critical that you understand the interest rate and repayment schedule before agreeing to the terms of a POS loan.
3. Track Your Online Credit Card Spending
Retailers make it simple to save your credit card information to your online shopper profile. The next time you make a purchase, your credit card may automatically be selected as the payment method, making it effortless to shop without closely monitoring your credit card usage.
Set a weekly or monthly reminder to look at your credit card statement and tally up the amount of online purchases you made using the card. Assess the amount of online purchases and be sure to adjust as needed to avoid overspending next month to avoid racking up credit card interest. GNCU, like many online banking platforms, offers customizable alerts to help you stay within your budget, notifying you when your spending exceeds a set amount or when your account balance falls below desired limits. Additionally, it’s always better to fund wants through savings rather than resorting to credit card spending at high interest rates.
We’ve outlined a few tips if you need assistance in paying down credit card debt. Or, get expert help in creating a debt repayment plan through free financial coaching.
Make a Financial Plan for Your Future and Navigate Shopping Like a Pro
If you enjoy online shopping, you’re not alone! Approximately 79% of Americans shop online. By keeping your goals and budget in mind, you can make purchases online without breaking the bank, and GNCU is here to help.
GNCU experts can assist you in setting financial goals, creating a sustainable budget, and working toward financial independence. While you can scroll and tap to make an online purchase, you can just as easily access free educational resources, expert guidance, and more online. Or, talk with one of our financial experts at GNCU by calling (800) 421-6674.
