When A Good Deal … Really Isn’t

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is this a good dealA few months ago, I found a great deal on Groupon: two tickets to a murder-mystery dinner theater for $50, including both dinner and the show. I asked Will if he thought we should get it.

“We’re trying to save money,” he reminded me. It was true. In fact, the previous day we had just had a conversation about how we both wanted to save more.

“But it’s a good deal,” I replied. The package was discounted 70 percent off the normal price.

He shook his head. “Just because it’s a good deal doesn’t mean you should buy it.”

He was right. Coupons and deals are forms of marketing: they appeal to our thrill of the hunt. They fill us with the immediate gratification of “scoring” a deal. Victory!

That leads to impulse buying. I hadn’t been looking for tickets to a show, per se, but when I found cheap tickets, I almost made a spontaneous purchase.

That’s effective advertising. It’s also bad for our budget.

“Okay, fine,” I told him. “We won’t buy it.” I felt a burst of satisfaction: crisis averted. We had just “saved” $50. That was exciting.

“I Buy, Therefore I Am.”

I’ve hardwired my brain – through self-talk – to get satisfaction from saving money. It produces the same dopamine rush as the novelty of buying something new.

But our strengths are also our weaknesses: this same mental training makes me susceptible to marketing that appeals to my love for frugal finds.

Self-talk is powerful. People buy things that reflect the type of person they want to be.

If my self-talk said, “Paula, you’re sleek and chic,” I’d be drooling over luxury brands and designer labels. Why? The advertising reinforces that self-image.

But my self-talk says, “You’re responsible. You’ve got sensible Midwestern values.” This makes me vulnerable to advertising that fuels that self-image: Groupon deals, Craigslist finds, clearance-rack impulse buys.

But a Craigslist ad is still an ad.

It’s all marketing, every last “80 percent off!” of it. And it’s as pervasive, and as insidious, as glossy magazine ads featuring sexy people wearing $800 pants.

Marketers pay big bucks to get Groupons and coupons in front of you, because they know it works. It appeals to your sense of frugality.

Frugality is just another form of consumerism: it keeps your focus on consumption. Sure, you’re buying for less. You found a cheap couch or a half-off dinner. At the end of the day, though, you’re still buying stuff.

The alternative? Think about what you can contribute to this world … not what you can purchase. Bargain-hunting is for consumers. You’re a creator.

 

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15 Responses to “When A Good Deal … Really Isn’t”

  1. Leah
    19. Feb, 2013 at 8:30 am #

    I’ve been looking for a way to say these words for ages now,

    “Frugality is just another form of consumerism: it keeps your focus on consumption. Sure, you’re buying for less. You found a cheap couch or a half-off dinner. At the end of the day, though, you’re still buying stuff.”

    So so so so true.

  2. Jeni L
    19. Feb, 2013 at 8:54 am #

    I needed this reminder. I had a very similar experience recently. I was at Target looking at baby monitors. I spotted one on sale for $79, down from $159 retail. Called the husband; he didn’t think we needed one. I hesitated as I put that monitor back on the shelf, but I’m feeling good now. We’ve gotten by fine without it. That was my $79 crisis averted. Paula- THANK YOU for helping me to keep the “big goal” of financial freedom in mind. I’ve been devouring your articles this week and love to see this new post.

    Btw, do you have a post on maxing out a Roth IRA? I know you prioritized that for 2012 but I’ve been debating about whether I want to tackle that first for myself or save the money for a rental home. I’d love to purchase my second income property already! Also, any articles or tips on how to borrow money from a house with equity? My rental home #1 is fully paid off and I’d like to get money out to invest in more properties. I’m trying to follow your real estate lead. :)

    • Afford Anything
      19. Feb, 2013 at 4:17 pm #

      @Jeni L — I know exactly what you mean. I’ve had so many experiences like the one that you’ve described at Target.

      You asked a really good question in the second paragraph. I’m going to answer that in a full blog post, since it will take a little bit of time to go through it. Congratulations on paying off your income property! That is awesome! Hooray for all of the passive income that you’re earning. Passive income rocks!

  3. Mochimac
    19. Feb, 2013 at 9:06 am #

    I’ve used this tactic to great success in the past month or two.

    Generally I go through 3 questions:

    1. Do I actually want or need it? — Eliminates 80% of purchases
    2. Is it something I would use and would fill a gap in my life somewhere and/or make it easier? — Eliminates the other 10%
    3. Is it a good deal compared to what I can find online, with a coupon, a sale, etc..? — Eliminates the other 5%.

    The best tactic of all, is just not to go into shops, subscribe to emails or shop online. Temptation is truly out of sight, out of mind for me.

    If I don’t go out and go into stores, I won’t buy anything. I’m very much an impulse shopper.

    • Afford Anything
      19. Feb, 2013 at 4:16 pm #

      @Mochimac — Out of sight, out of mind is the best way to go. It takes the self-control out of the picture and replaces it with blissful unawareness.

  4. William @ Drop Dead Money
    19. Feb, 2013 at 9:26 am #

    Very good perspective! I tend to avoid ads, period, because of exactly this reason.

    My self-talk says: I’m an ostrich: with my head in the sand, I never know about deals. I’m proud that I’ve stayed away from eBay, Groupon once and Craiglist except the one time when I shopped for a car for my wife.

    My wife calls it my version of the three monkeys: see no ads, hear no ads, buy no ads. :)

    • Afford Anything
      19. Feb, 2013 at 4:13 pm #

      @William — The ostrich/3 monkeys self-talk is awesome. I guarantee that staying away from Groupon, Craigslist and eBay has saved you a ton of money.

  5. Tina
    19. Feb, 2013 at 9:27 am #

    You’ve made a really good point. I was tempted to buy a Kenneth Cole jacket through a Groupon deal just because it’s a Kenneth Cole jacket that’s on sale! I’ve unsubscribed from these sites, and I don’t read fashion magazine but the temptations are still there. I remind myself that I would rather spend the money on travel or put it towards the mortgage, and it helps curbs what are simply wants, not needs.

    • Afford Anything
      19. Feb, 2013 at 4:14 pm #

      @Tina — Reminding yourself that every dollar you spend on X is a dollar that you can’t spend on Y is a great way to resist temptation. When I was saving up for my big trip, anytime I was tempted to buy something frivolous, I’d think about all the gorgeous beaches in Thailand or hillsides in Bali that I’d rather see.

  6. Kara
    19. Feb, 2013 at 3:32 pm #

    Brilliant.

  7. Chris
    19. Feb, 2013 at 4:47 pm #

    Well it’s all in the description. “Bargain-hunting” is hunting for a bargain. I usually go shopping for a specific item. I will likely look for the cheapest price but not at the cost of too much time or effort. I don’t want to spend more in my time than what I end up saving. One way I defeat impulse buying due to witty advertisements is by questioning what the ad is trying to relay to potential customers. Most of the time when you start to decipher advertisements you realize that companies really think you are an idiot and will buy anything with a red sticker on it that says “save up to” on it. I get greatly offended by these sort of advertisements and storm out of the store enraged and offended. Classic think-before-you-act situation. Also, being a skeptic helps immensly.

  8. American Debt Project
    20. Feb, 2013 at 2:05 am #

    Excellent! I always have so much self-talk going on in my head, it’s hard to quiet out the noise and remember what the goals are. But it’s a lot easier when you have big goals and you know they are more easily reached by being creative and doing, not just spending and thinking about spending.

  9. writing2reality
    20. Feb, 2013 at 3:59 pm #

    You are absolutely right about this AA… too often you hear people talking about their savings, without ever “checking back in” to what they spent.

    They say, “Well I saved 70% on this today at the mall!!” And I respond, “But it still cost you $100; $100 that you no longer have!”

  10. Olivia
    12. Mar, 2013 at 5:50 pm #

    That quote, “People buy things that reflect the type of person they want to be.” is eyeopening. I never realized just how much marketing and advertising influences my decisions! I thought being a frugal buyer was a huge accomplishment but I still find myself being influenced by consumerism. I will def reflect on this post the next time I see something half off!

  11. Simon @ YourWealthPlanners
    13. Mar, 2013 at 1:49 pm #

    Great article, and its so true. Its important to weigh up how much you are actually saving, dont fall into the trap.

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