I’m a finance expert – are you guilty of a toxic spending habit could be costing you even more money in the lead-up to Christmas?

• A finance expert has shared tips on how to avoid ‘spaving’ this Christmas
• READ MORE: Here’s how to plan your monthly budget on a salary of £30000 

With Christmas around the corner, it’s perhaps never been more tempting to splash the cash.

And with the promise of mega-saving deals and once-in-a-lifetime discounts, it’s not long before the allure of the seasonal sale has you snapping up a glossy new pair of boots – even if you don’t need them.

This toxic shopping habit – the act of spending money to save money – is known as ‘spaving’. Amy Knight, a personal finance expert at NerdWallet UK explains: ‘Spaving’ is spending but thinking that you’re saving. 

‘This could include making several purchases on a 3-for-2 deal when you actually only wanted one of those items originally, or adding additional items to your cart to meet the threshold for free shipping’.

‘Overall, ‘spaving’ can fool us into spending more than we want to, so it’s important to balance finding fun deals with genuine ways to cut costs and save money’.

Amy Knight, a personal finance expert at NerdWallet UK, explains the toxic shopping habit ‘spaving’ – the act of spending money to save money (Stock image)

Here, we list the most common shopping deals around this festive season, as well as tips to avoid spaving, as revealed by the expert. 

1. Buy one get one free

For many shoppers, these five words are like music to the ears, particularly during the festive season.

The deal offers the perfect opportunity to pick up a gift for a loved one or colleague without pinching your pocket.

If you have sincere reasons for taking advantage of the deal, then Amy suggests snapping up the bargain right away.

However, if you don’t need any of the products on offer, the expert advises: ‘Try to hold off on these additional purchases for a few days at least.

‘Then if you find you’re still thinking about that item, you can come back to it. If you can wait until the January sales, the price may have gone down’.

2. Free shipping 

By now your inbox is probably littered with enticing ‘free shipping’ emails.

And while you may be eager to purchase £50 worth of make-up to qualify for the exciting deal, take a step back to consider if you’ll actually be saving coins in the long run.

Amy explained: ‘It’s only worth adding additional items to your cart to qualify for free shipping if, firstly, they are all items you want anyway or, secondly, if the item you add costs exactly the same as the cost for shipping. Ideally, you’re looking for both these things to be true.

‘Make sure you check whether there are a range of shipping options to choose from, as the default option may not be the cheapest. 

‘If you’re prepared to wait an extra couple of days for your order to arrive you can sometimes cut shipping costs down considerably.’

3. ‘Limited time only’ discounts

Some brands claim to offer discounts for a ‘limited time only’, causing shoppers to rush to stores to puck up the deals – however such advertisements can simply be a tool to encourage panic-buying.

In fact, many of these items have actually been sold at the same or lower price for months beforehand, or even all year round.

The expert strongly advises using free price comparison sites like PriceRunner or PriceSpy to check the price history before purchasing.

This way you can spot the variations, if any, made to the product’s price over the last year.

4. Delete your saved payment information

Next up is perhaps one of the more challenging directives on the list.

The advent of payment technology now lets phone users save their debit and credit card information, making it easy to snap up an item at just the tap of a button.

And while it’s definitely time saving, it can burn your pockets in the long run. 

‘I’d suggest you delete them,’ said Amy. ‘Either now or once you have found all your Christmas presents for loved ones. 

‘Everyone knows it’s hard to squeeze in Christmas shopping alongside work and day to day responsibilities. 

‘But time-saving tools like saved payment details can make it too easy to make a purchase without thinking it through. 

‘Just putting that little obstacle in place of having to manually enter your details can stop you from buying things you don’t really want or need.’

5. Set a budget 

Whilst some multibuy offers may provide a genuine cost saving, it can be counterproductive when you’re trying to stick to a budget. 

Setting a budget is perhaps one of the best tools you can use in the fight against spaving, and will even save you money in the future. 

Amy added: ‘Many online banking apps now offer a feature where you can set a budget for yourself, split by categories such as health and beauty, and dining out. 

‘When you approach the limit of your budget, your app will send you a notification to make you aware. You can also view your spending month by month.

‘It might be a good idea to look back over your spending last Christmas and see if there are any categories in which you feel you spent more than you intended to.’ 

Budgeting apps not only take the stress out of monitoring your spending behaviour, but also help to cultivate good saving habits that will serve you in the long run.

Source: Read Full Article