One of the biggest marketing ploys in the world is the “It’s originally $1,000, but for today only, you can save $250 and grab it for just $750!”. The thing is, this level of marketing makes us think that we’re saving $250, but in reality, we’re not saving anything – we’re just not having to pay it.
Here’s what I mean. How many times have you “saved” money on something, but you didn’t do anything with that savings?
The thing is, we don’t mind telling people how much money we saved because we got a great deal on something; in fact, it makes us feel amazing about ourselves when we can brag about how much we didn’t spend. And rightfully so. I think it’s super smart to work hard to find the right bargains.
However, as with almost everything in life, there’s a catch. The catch is that you didn’t really save anything unless, of course, you were saving up to buy that $1,000 item. Then, when you went to the store, you discovered it was on sale for $750, and then you took your $250 savings and applied it to your emergency fund, vacation fund, or new car fund.
That would be saving your savings from your great deal.
Why am I making this point? Because summer is upon us, and as statistical data and well, just my experiences in real life, our finances tend to take a back seat during this time. In fact, the start of the new school year is termed in the personal finance world as a “second New Year” because everything starts trying to rein in their finances.
And during the summer months, between vacations, family reunions, weddings, sporting events, backyard bar-b-ques, and the like, we tend to forget about our money. And of course, retailers want us to forget about our money!
Why? Because then we’ll spend it.
In the book, Power of Habit, the author’s research discovered that the beloved company Target spent an ungodly figure of money to figure out how to determine when a woman was pregnant.
New parents are seen as the “Holy Grail” of retail customers because, as anyone who has ever had to care for a newborn baby overnight can tell you, the “zombie” parenting stage is haaaarrrrd. And you aren’t paying attention to anything, so if you run into Target for formula because you have a great formula coupon, you’re more than likely going to grab other items too and eventually do all of your shopping at Target, if Target markets to you correctly.
Seriously, companies do this. (If you have a Customer ID Number with Target or a Target RedCard, you’re in their system, and they’re tracking what you buy for the sole purpose of marketing to you.)
The reason I am sharing this is that awareness is critical.
Being aware that when we make a purchase, we’re spending money, not saving it, can have a dramatic effect on how we spend our money.When we stop seeing it as “saving money” and instead see it for what it really is, spending money, we’re more equipped to make better decisions about what we want to spend our money on.
Don’t get me wrong, I love StitchFix, Target, ThredUp, and Amazon just as much as the next person, and they can save you money when you’re proactive. But it’s important that we never lose sight of the fact, that not spending and saving are two different things.
Saving money is an action just like spending money is an action. If saving money is a part of your financial goals (which it should honestly always be a part of your financial goals), then I encourage you to take the time today to put it into your money plan. Set up automatic drafts every week or every payday to go into your savings account.
If you’re not sure that you can afford to even save any money at all, consider trying the $5 Savings Plan (see post here) or start by setting aside that tax refund check in a savings account instead of spending it.
If you develop a “save” mindset instead of a “spend” mindset, it can change your financial future in less time than you think. You could end up paying cash for Christmas this year instead of swiping a credit card, you could end up saving up that down payment for the house you keep talking about one day buying, or you could even max out your retirement contributions this year.
Amazing things can happen when we become aware of our spending habits and when we change our mindsets.
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