Is retail therapy busting your monthly budget?

02-12-2022Budget

The impacts of COVID and Amazon or other online shopping options and working from home has changed many of our behaviors.  But, has online shopping busted your monthly budget?

In a Harris Poll survey on behalf of the American Institute of CPAs, more than 2 in 5 Americans said online shopping makes it harder for them to stick to a monthly budget.  They are buying things when they want because it makes them feel good.  They are not realizing the cost until they see their monthly statement.

Here are some ideas to curb your appetite for “retail therapy.”

1. Shop with a plan - Merchants have powerful strategies to encourage you to spend. So, level the playing field by entering the retail arena with a plan of your own for what you need and can afford. Determine what you plan to purchase and how much you’ll spend before you start shopping.
2. Run the Numbers - Before making any big purchase, remember to run all the numbers. Make sure you understand the return policy, delivery costs, and any fees/taxes associated with the purchase. Take the time to compare the total purchase cost with other retailers to see if the same item is available for a better deal elsewhere.
3. Try a cooling off period - Take a step back and assess whether it’s an actual ‘need’ or more of a ‘want.’ Try putting an unplanned purchase in your ‘cart’ online or implementing a ‘cooling off’ period where you allow a certain amount of time to elapse before clicking ‘buy.’
4. Don't shop out of boredom - If you find yourself browsing through your favorite online shopping sites just to pass time or for entertainment, you are likely to spend money on superfluous things that you may not be able to afford. Instead, consider earmarking distinct hours specifically for online shopping and use only that time to shop for the specific items in your budget.

Additional Survey Findings

• 56% of Americans have increased online shopping since the start of the pandemic
• 31% say their overall online/mobile shopping has increased significantly
• 82% say promotions like free delivery or free shipping make them more likely to make an online purchase
• 24% have increased purchasing from ads on social media
• 50% have increased use of video streaming services
• 39% cite an increase in ordering groceries online
• 33% increased third-party take-out delivery services