Spending money in order to save money, a concept that plagues us all. This problem now has it’s own amalgamated word; spaving.
While initially I thought this was a little too Hollywood (like Brangelina for Brad Pitt and Angelina Jolie) I have actually come to appreciate this new buzz word.
Spaving is a problem that can really trouble even the most sophisticated saving money expert.
On one hand, you live by the rule of spending as little as you can in order to save money, while on the other hand you compliment this rule by always trying to find a bargain, in turn making the money that you DO spend go further.
The supermarkets know this, which is why they use specials, incentives and offers to lure even the most savviest of shoppers in. They offer deals that appeal to the second part of our thinking, that of which where we are actively pursuing a bargain (often at the peril of rule #1 which is to spend less).
The outcome? We spend money believing that we are actually saving money.
Given that spaving is something we face daily, I wanted to elaborate a little further on the concept of spending to save. I want to discuss frequent ‘spaving’ scenarios, how to avoid them and also list some hard and fast rules to swear by in order to sense check your purchases.
Hopefully, you have a new outlook on spending money to save money after reading this.
Examples of spaving (spending to save money)
Buy two, get one free offers
Ask yourself, did you really need two, let alone three of these items? Just because something is a bargain that can help you save money (technically) doesn’t mean it’s good for your personal finances.
Stocking up on an item when it’s on special
With a new baby, I am prone to stocking up on baby wipes or nappies simply because they are $2 cheaper on a particular visit to the shops. Is this really smart to have things purchased on discount only to sit there for months on end?
Perhaps the money would be better kept on my mortgage or used to earn me interest.
Extra rewards points on eligible purchases
Spending more money to receive extra reward points. While frequent flyer points are cool if you can earn them for not changing your behaviour, changing your spending to earn points is a big no no and is exactly what they want you to do.
The misconception of being a bargain hunter
Actively looking for ways to save money by spending, using sites like OzBargain or Daily Deals may seem like you are getting a good deal, but often it requires you to still outlay money. It shows that even ‘bargain hunters’ are actually still wanting to simply spend and consume like anyone else.
Purchasing something ONLY because it is cheap
For instance, the end of day muffins on the way to train station I see at ‘Muffin Break’. I don’t buy muffins ever, but why do I think $3 is a good deal for a muffin all of a sudden? $0 is a better deal and my waistline will thank me also.
How to avoid spending to save (spaving)
Ask yourself; will I need these items this month?
Realise that the money is quite often better kept elsewhere.
Baby wipes don’t pay interest, nor do 1000’s of cans of Tuna or Beans that you stock up on.
Note the amount you will save, search the web for alternatives.
Odds are there are online shopping sites that have better prices or deals than what it is that is currently tempting you in the shops. If you really want to save money on something, odds are you will be able to find it cheaper online year round.
When is spaving ever a good thing you may ask?
When you have the cash flow available to do so
If you know you can afford to stock up on items that you use frequently, go for it. Just ask yourself whether or not you could better use the money to invest or pay down debt before doing so.
I however often stock up on certain things that I go through quickly. While buying a metric tonne of baby wipes may be silly, buying 2 or 3 packs might be smart as it gets me a discount through spaving while also helping me not have to return to the shops for baby wipes in the coming couple of weeks.
When you intend to buy an item in the short-to-medium term
Sometimes you know you need to buy something in a month from now and all of a sudden it is on ‘super special’. This happened with a car seat I needed to buy once for the bub and a particular store was closing down, enabling me to save a good $250 on the seat simply because of an opportunity.
When you weigh up the opportunity cost of your time.
Remember, your time is valuable. If you know you need something, get it. Who cares if it is $1 cheaper if you order from the US, sometimes you need to buy, move on and use your time to make you more money instead of chasing tiny tiny savings.
So why do people ‘spave’ do you think?
- Humans love to spend money
- We love to feel like we are getting a bargain
- Retailing is fun
- We fear not getting that bargain in the future
- We have an inbuilt desire to ‘hoard’ and ‘nest’ for our families
Tell us about your spending to save tactics
Do you agree it is a problem? What items do you spend more money on in order to save?