26 Sep

Can You Avoid Impulse Buying and Still Have Fun?

We have to understand the beast before we can slay it, right? Impulse buying occurs anytime you buy something you did not plan for. It is characterized by thoughts, sometimes internal, other times spoken out loud, perhaps to a disapproving spouse, that include phrases like:

  • “But it was on sale!”
  • “Life is short and I’ve always wanted one of these.”
  • “I’ve been really good for so long, it was time to treat myself.”

Why do we buy things we don’t need? An affinity for self-destructive behavior? Hardly. No one wants to be in debt.

While research is split about the psychology of why we do it, it makes sense think about impulse buying as no different than eating something unhealthy. Let’s be realistic, you can’t eat healthy all the time and you can’t stick to a budget 100%. We eat when we’re either happy or sad and the same applies to our spending behavior.

Now that we’ve addressed that it’s emotional, it’s important to remember that both genders are guilty. Three out of four adults in this country make impulse purchases, according to a new survey by CreditCards.com “We found that men and women impulse shop about the same amount, but the way they feel and how much they spend are different,” said CreditCards.com senior analyst Matt Schulz.

  • Men were significantly more likely than women to spend serious money on an unplanned purchase. While just seven percent of the women said they had spent $500 or more, 21 percent of the men did. Men also made more impulse purchases of $1,000 or more.
  • Women tend to keep their impulse purchases small, under $25.
  • Men are more than twice as likely to make an impulse purchase when they’re intoxicated.
  • Women are twice as likely to buy impulsively when they are sad.
  • Women are more likely to regret making an impulse purchase: 52 percent of the women vs. 46 percent of the men said they experienced buyer’s remorse at one time. Stop impulse buying. It can be done.

Now that we’ve identified what impulse buying is, identified that emotions have an effect on whether we do it, and acknowledged both men and women are guilty, time for some tips!

  1. Always use a list! This is not limited to grocery shopping. There is a certain big box store, orange in color, where one purchase miraculously turns into many items you never knew you needed.
  1. Don’t bring your kids with you. If you have to, practice different ways of saying no, or use bribes of things that don’t cost money that you can do as soon as you leave the store.
  1. Find alternative activities for when you’re feeling stressed, sad, or overwhelmed. Recreational sports? New workout routine? Home improvement project?
  1. Put the item down if you are only buying it because it’s on sale or it’s 2 for 1.
  1. With the exception of the grocery store, try to avoid using a cart.
  1. Remove saved credit cards in shopping apps. Apps that come to mind are Amazon and Groupon.
  1. If it’s a big purchase, try to institute a 3 day rule where you spend that time thinking about it, weigh it logically against the rest of your financial needs and goals, and consider if you really need it.

RMLEFCU is here to help you avoid impulse buying and save more of your money. However, we can still acknowledge that all work and no play makes life pretty dull. Try a few of these tips and let us know how you avoid impulse purchases. We can save more and avoid guilt together!

14 Sep

Avoid Making a Big Money Mistake with these Questions

The best way to avoid a money mistake is to question big-ticket items fully before committing. Asking yourself these questions will help you help you maintain your financial health by avoiding unnecessary debt. If it doesn’t relate to heating your home, drying your clothes, keeping your house dry, or getting you to work – the purchase is likely not one you MUST make.

This brings us to the first question in our series that you’ll want to answer.

1. Is it necessary? Can you function in your day to day life without it?

We realize we’re being strict, but a narrow view of necessities is key to maintaining control over your finances. You may have guessed from the introduction that we consider a new heater, a dryer and a car to be necessities. Boats, vacations to Tahiti, and kitchen renovations are typically not.

2. Can you borrow? Buy used?

Use Facebook or Nextdoor to put a call out. Examples of things you might be able to borrow include phones and laptops. They are necessary for us to maintain our jobs but if we don’t have the money to buy them new, one option would be to borrow or buy a sparingly used phone or laptop from a friend. Furthermore, while you wouldn’t borrow a dryer, you might make due without one for the summer months by hanging up your clothes to dry outside, using a neighbor’s, or going to the closest laundromat until you have saved up enough to buy your own.

Some items are harder to borrow, like a car or truck. Having a reliable vehicle to get you and your loved ones to where they need to go is important. RMLEFCU is proud to partner with AutoTrek for honest car buying advice. They are offering the following incentives to RMLEFCU members for used and new cars:

  • $100 gas card
  • Discounted prices on 2017 models
  • Exclusive access to 50,000 used models online and over 100 on their lot

3. Shop around if possible and pay attention to reviews.

The Internet and social media make it so much easier to Google the specific brand and model of many big-ticket items and find out who has the best price. A little research can save you a lot of money.

4. Can you do it yourself? Do you have the time? Are you handy?

Be honest not only with how capable you are, but with how much time you are willing to give up to fix or replace the item yourself. YouTube videos can be useful to show you how to properly cut a mango, but hanging drywall may be best left to a team who has done it before.

We have mentioned starting an emergency fund in many of our articles. If you don’t have one, here’s a few reasons why you should. Thankfully, RMLEFCU offers a service called Courtesy Pay that will allow check, debit and ACH items to be paid up to $1,000 by allowing your checking account to go into the negative; rather than returning the overdraft item. This will help keep you out of debt in case you have any financial emergencies.

Speak with a RMLEFCU employee about our current AutoTrek promotion and Courtesy Pay today!

11 Sep

Dollars and Cents for Parents to Be

Financial Advice for New Parents

We won’t bore you with the oft-quoted figures of what it costs to raise a child until their 18th birthday. We feel it’s counterproductive to scare you and we think those estimated figures are wildly inaccurate anyway. It’s expensive. Let’s leave it at that. *Note that we are not factoring in any college related expenses for this post.

Let’s start from the beginning. The moment you discover you are going to be spending many weekends at home, aka, you’re expecting, dig out your health insurance paperwork and find out what maternity expenses are covered and what is not taken care of. Specifically ask questions like:

  • What’s the procedure for adding your new baby to your plan?
  • Will the plan cover your newborn’s nursery stay? Remember that your newborn’s hospital bill will be separate from your own. Typically, a health insurance plan will provide coverage only if you enroll your child for dependent benefits within 30 days of birth.
  • Will the plan cover the costs of a neonatal intensive care unit (NICU) stay for your newborn?

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