November 23, 2021 | By: Kristina Delville

How to Be Thrifty When Spending

Budgeting | Credit Cards

Anyone can be blindsided by the impact of their shopping bills on their budget. It’s all too easy to go to the supermarket, the hardware store, a clothing shop, or any other retail business and find things that you didn’t even know you wanted. 

However, after making those purchases, you get home, check the bank balance, and get hit hard with a case of buyer’s remorse as you realize that you spent more than you could comfortably afford.

Reports indicate that nearly 1 in 10 people have expressed regret concerning one or more of the purchases that they made in the pandemic. So, if you bought something and felt guilty or frustrated about it later, you’re not alone! 

The real problem is how excessive spending during regular shopping trips can impact your finances. Even relatively minor expenses can add up over time.

Tips for Thrift Shopping to Save Money

While you don’t need to be perfect (everyone enjoys a little “just for fun” spending from time to time), it’s important to learn how to be thrifty with our shopping and to develop good habits that help us save money.

To help you stretch your shopping budget, here are a few thrift shopping tips that you can apply to your next trip to the store:

1. Instead of Buying New, Check Your Local Thrift Shop

The first step in learning how to be a thrifty shopper is to go to your local thrift store to buy gently used clothes and accessories instead of paying too much money for brand-new items. There are a lot of people who have perfectly good clothes that they simply don’t need any more.

Additionally, before adding to your wardrobe, ask yourself if you need new clothes or if you just want to change up your outfits a bit. If your clothes are in good condition, you can save more money by skipping the shopping trip entirely.

2. Go Garage/Yard Sale Hunting

In addition to going to the thrift shop, it can help to look out for garage sales in your area. At these sales, you can often find great deals on used clothes, toys, furniture, and more from people who need to make room in their homes.

It could help to connect with your neighbours, local homeowners’ associations, and social groups to learn when people in the neighbourhood are planning to hold a garage sale.

One piece of advice for hitting garage sales: be prepared to pay cash, since most people don’t carry a credit card reader with them! It can help to bring a variety of smaller bills and coins in addition to the bigger ones—you never know when the person running the garage sale is going to run out of change!

It can also help to be prepared to haggle, but don’t be surprised if not everyone you meet will be willing to budge on their desired price (especially early in the day). Consider returning to a sale later in the day to see if the item sold and, if they still haven’t moved it, see if they’re willing to cut you a deal on the price. 

Getting the seller’s phone number and asking if they’ve sold the item before making the trip back out can be a good idea for saving you some time.

3. Steer Clear of the Name-Brand Products

When you go out to shop, it’s really tempting to simply throw the items with the familiar brand names into your cart and get on with your day. Big companies spend a lot of money on ensuring they have the brand recognition to appear as the “default” choice for their specific type of product.

However, many products have alternatives available beyond the “big brand” names. In the vast majority of cases, these alternative-name products are nearly identical to the brand name products but are a fraction of the cost.

For example, consider your jeans. Does having a big, popular designer name attached to the back of the pants pocket make the denim sturdier and more comfortable than an identically-sewn pair of jeans without the label? There’s no need to pay for a fancy label and the manufacturer’s overinflated marketing!

Getting into the habit of buying the off-brand product can be a good money habit to get into to help you stretch your shopping budget further!

4. Deposit a Percentage of Your Paycheque in a Savings Account or Emergency Fund

Another thrift shopping tip that can help you avoid overspending is to put some of each of your paycheques into a savings account or other long-term fund. 

This can help you control your spending and be thrifty by removing available funds from your chequing account and setting it aside for an emergency/retirement.

This is especially useful if you find yourself spending money until you run out of funds (living the paycheque to paycheque lifestyle like 47% of all Canadians). It can also help to take a look at your monthly expenses compared to your income so you can start making a budget.

If you have outstanding debts, however, it’s probably best to focus on paying those down as soon as possible instead of setting up a retirement fund. This is because the interest on many forms of debt would far outpace the returns you can expect from most types of savings accounts and investments.

For example, say you had $5,000 of debt on a 20% APR credit card. You come into a windfall of money that’s just enough to pay your debt in full. If you invested that money in the stock market and were fortunate enough to make a 10% profit, you’d have $5,500. 

However, in that year, your $5,000 of credit card debt would accrue about $1,000 of interest (assuming the balance remained stable from month-to-month so the interest didn’t compound). That’s a loss of $500. 

However, if you paid the credit card off up front, you’d at least be free of that debt.

5. Downsize Your Home and Vehicles if You Can

How big of a house do you really need? Do you really need to drive a four-door luxury sedan or an expensive sports car to work, or is a small, two-door hatchback enough to meet your daily needs?

There’s nothing wrong with wanting to live in a spacious house or drive a fancy car. However, it’s extremely important to compare the costs of big homes and fancy cars to your needs and means. You may find that you’re spending more on housing and transportation than you really need to.

Consider “downsizing” your home and vehicle to better meet your needs and reduce your monthly bills—just be careful to check that the cost of downsizing won’t exceed the benefits. 

For homes, it can be a bit tough to find a new place where the rent/mortgage would be low enough to justify the expense of moving.

Also, for cars, if you’re already close to paying off your current vehicle, it may be worthwhile to stay with it even if the monthly payment would be lower. For example, changing your payment from $350 a month to $250 a month when you only have six months left and the new auto loan would take another five years to pay off is probably not the best idea.

If you’re in the market for a new vehicle, consider buying used instead of buying a new current model year vehicle. Shopping online for cars can also let you compare prices, financing options, and features without having to deal with a car salesman.

Even if you do end up going to a dealership, simply having researched your options can be a powerful bargaining tool since you can walk away and know what kind of deals you could be getting elsewhere.

Need Help Getting Out of Debt?

If you find that, even when following all the top thrifty shopping tips, you still struggle with debt, don’t worry—help is available! 

Organisations like Credit Canada are here to provide information, advice, and debt relief options that can help you build a solid foundation for your “get out of debt” strategy.

Reach out to us online or call 1.800.267.2272 to get started!

 

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