Archive for April 26, 2012

5 Bad Buying Habits – Do you Have One Of Them?

Some people are short of money all the time. It is not because they made less money than others, but because they spent a lot more than others. Are you one of them? See following 5 bad buying habits. If you have one of them, please think again that you may want to stop doing that starting from today. If you have all of them, I bet your life is a mess, you may need seek professional help.

Impulse Buy
This is the number 1 bad habbit, and it is very hard to change. Ladies, how could resist a new fancy dress, despiting you have more than 20 similar ones in your closet, right? It is also very hard for man not to buy a new gadget, such as the new iPad. Here is the trick that might help you to change your mind: when you are ready to buy, say to yourself “Let’s buy it tomorrow”. It is very possible that you change your mind a day later.

Buy Because of Promotions
Promotions are the tricks that retailers use on you to spend more than you should. Buy one get one 50% off, sounds attractive? The truth behind it is that you end up spenging more, and retailers make more money. 20% off with $100 order or more? That means you have to at least spend $100, while all you planed to spend was probably $10.

Stick to a store because of rewards points
Many retailers offer reward points for your purchases. Usually $1 is equivalent to 1 point. You can redeem these points for some free products (such as Sephora) or even use it as cash for future purchase (such as I am not saying that these reward programs are bad. Actually you should join them to save some money or get something free. But please don’t stick to these shops because of the points, other shops may provide same products as lower prices.

Financing Unncessarily
When you buy an expensive item, such as a large appliance, furniture, or a diamond ring, many retailers will offer financing options, with no interests for the first 6 months. You may be eligible for additional discounts and promotions. The truth is that if you can’t afford it today, you are very unlikely that you can afford it 6 months later. If you still think you can, wait for 6 months and see.

Pay Later
With BillMeLater or Easy Pay, you won’t get billed until 30 days later. And after that you can choose to pay in full, or pay month by month with APR rate as high as 19.99%. Sounds pretty much like the above financing plans, right? But only worse. Financing does not hurt your credit scores, but BillMeLater or Easy Pay will. With a lower credit score you will pay high interest rate on your mortgage and car loans, or affect even your inurance rate!