Gails Blog

Lots of people shop emotionally instead of with their heads, buying stuff they don’t need because they’ve had a bad day, had a great day, or been with someone who is very convincing - be it a salesman, a best friend, or a wife/husband with a itch to acquire.

So, have you ever bought something you just couldn’t live without and afterwards find yourself scratching your head and wondering, what the hell was I thinking? Then you’ve experienced something called “buyer’s remorse.”

Want to avoid that horrible sinking feeling, the guilt, the wish-I-could-take-it-back sense of waste? Here’s what you should do.

1. Make a list, and never buy anything that’s not on your list. If you see something you really, really want, add it to your list.

2. Once you’ve added it to your list, go home and sleep on it. If you want it tomorrow, go to step three.

3. Do some research before you buy. Buyer’s remorse often climbs on our backs when we find out we’ve paid too much for something. Make sure you know how much the item you’re buying is really worth.

4. Get a second opinion. Take your sister, your best friend, your mom or dad with you, and ask if they think it’s worth the price.

5. If there’s any financing involved, figure out what the item will end up costing you once you’ve paid the financing charge. If you don’t do this step, you’re deluding yourself and you deserve to feel like a dope.

6. Ask yourself, “Do I need it or do I just want it?” If it’s a need, put it on your list in a position of priority. If it is simply a want, it goes at the bottom of your list. Take care of your “needs” before you start scratching your “want” itches.

7. Ask yourself, “What else could I do with the money I’m spending on this item?” Are you working towards a goal that would be served well by this money? Is there another priority that should take precedence? Put your money where it will do you the most good.

Answer me this: You’re standing in the bookstore holding a copy of a book you’ve been dying to read when the woman next to you says, “I saw it just down the street for $18.” Would you head off to the store that’s 15 minutes away to save $7?

I would. Yup, the walk would be good for me, and I just can’t pass up a good book.

Everyone has stuff they can’t pass up. For some it’s that fine cup of coffee. For others, a great handbag. Some guys love browsing the aisles of Crappy Tire, looking for the perfect tool that will make that job at home worth doing.

But how many of the things you buy come as a complete surprise to you? You don’t set off to buy a new set of glasses, but there you are standing in the store, paying for them. Sure, they’re great looking glasses, and you can always come up with a good reason or three why you need them, but they’re an impulse purchase.

Could it be that you can’t stay focused on what you DO want? You want to be debt free, want to save money for a home, want to have a big, fat emergency fund, or want to have a baby, but that’s such a far-off goal. It may be wonderful to be debt free, but giving up your day-to-day indulgences just doesn’t feel like it’s worth it. After all, it’s going to take months, even years, to get out of debt, and who wants to spend all that time denying all those small pleasures?

You can feel the pleasure of the coffee as the warmth moves through your mouth and down your throat. You can smell the pleasure of the next sip. And when you throw out the cup, the memory of having spent the $3.45 is gone.

So how do you make your goal feel satisfying when you’re skipping all that coffee, not buying that purse, forgoing the walk around the tool department, to make it a reality? How do you pass up dinner with friends, a movie with the kids or that fabulous cruise you’ve been dying to go on with your honey?

Here’s what I suggest parents do with their children when they’re trying to keep the kids focused on a goal they are saving for:

Cut out a picture of whatever your child wants to acquire and paste it on a page with the price beside it.

Find out how much your child wants to save each week, and divide that into the price of the item. So if item costs $20 and your child plans to save 50¢ a week, that would be a total of 40 weeks.

Draw 40 small boxes on the page with the picture on it.

Each week, as your child sets aside the 50¢ she’s saving, she gets to check off one of her boxes.

Charity drives use a version of this when they draw what looks like a big thermometer and then fill in the amount they’ve raised toward their total goal, raising the mercury each time they get another contribution. You can do the same thing with your goals.

Here’s another question about saving money. Let’s say there’s a new computer you’ve been saving to buy. You’ve done your research and you can get exactly what you want for $789. The man beside you turns to you and says, “That exact computer is on sale down the street for $782.” Would you take the 15-minute walk to save $7?

If you said “yes” to my first example of the book that was $25, down to $18, but said “no” to the computer alternative, my next question is “why?”

After all, $7 is $7, whether it represents a 28% savings or a less-than-1% savings, it’s still seven bucks and gets you $7 closer to your goal, whatever that may be.

Maybe it isn’t that you just can’t commit to saving, paying down your debt, or whatever else you wish you could do. Maybe it’s that you’re focusing on the wrong thing. Like the shopping example, if you’re focusing on the percentage you’re saving, you lose track of the value of the dollars themselves. It’s all very nice to save 50%, but a buck is a buck, whichever way you cut it.

And getting $1, $10, $100, $1,000, $10,000 closer to your goal has to be as satisfying as buying another cup of coffee, purse or tool. It just requires having the right perspective.

If you’re a shopper, you’re being manipulated. Sucker!

Shoe salesmen, car salesmen, and furniture salesmen start out by showing you the most expensive version of whatever it is you’re looking for, showing you the best deal they have, and then showing you the one they actually want you to buy. And you know what? You buy the one they want you to buy.

Airlines, department stores and hotel use the similar ploy by posting “full” prices, deep discount prices, and the prices they’re banking on you choosing.

Marketers know that consumers shrink from buying either the highest- or lowest-priced stuff. They default to the price in the middle. This is called the “compromise effect”; it’s a major predictor of how we buy and companies rely on it to increase sales of their most profitable items.

But that’s not the only way you’re being manipulated. Retailers who offer gift cards know that not all the gift cards will be redeemed. There’s a thing called the “break rate”, and that calculates how many of the cards will go unredeemed. The higher the break rate, the more of your money goes into their pockets without them having to give you a thing, except a pretty piece of plastic. Hmmm.

So why would we get a perfectly good gift card and then let it sit in a drawer for years, instead of exchanging it for something we need or want?

Apparently it’s because we didn’t have to work our butts to the bone to get it.

It has been estimated that out of $97 billion in gift cards purchased, $7.8 billion will end up unredeemed for 2007. Hey, man, that’s pure profit for the retail sector.

As if that’s not enough, when we do go into stores to redeem our cards, we usually end up spending more than the amount on the card. And we spend indiscriminately. Gift card shoppers are less likely to be fussy about the price they’re paying, says a study by the J.C. Williams Group, which found that 40% of shoppers using a retailer’s card bought items at full price, compared to only 16% of shoppers using other payment methods.

Want a good idea for fund-raising for your local school? Ask people to donate unused gift cards, and then have someone go out and shop with the cards and hold a sale at school. Turn plastic, and dumb shopping habits, into something positive. Oh, and when you’re out shopping up a storm with all those gift cards, remember that if you’re defaulting to the mid-priced item, you’re just another victim of the Compromise Effect.

According to the Stats Man, the average family spends $9,630 a year - which works out to about $800 a month - on food. While food prices have remained stable in Canada, around the world food costs are reaching new heights.

There are tons of sites devoted to being frugal, saving money on food, and clipping coupons. Here are some of the things I do that I find really help our family keep our grocery budget in line.

I shop in ethnic markets; I’m partial to Little Korea - everything from curry to coconut milk, baby corn to mushrooms. I find fresh vegis and fruit are also a lot cheaper than in traditional supermarkets and while I can no longer take advantage of ethnic markets on a weekly basis, I do use them to stock up on my staples. Never mind what it does in terms of broadening out our menu options at home.

I shop at farmer’s markets, in season. The biggest surprise I got when I moved to “the country” is that there are very few farmers’ markets out here. Most of the farming effort goes into beef, sheep, pigs and milk production, so even the corn isn’t human-grade; it’s used to make winter feed for the critters. However, come summer, there is an abundance of certain types of things, and I use the opportunity to build up my stores.

Alex loooooves my pasta sauce. It’s simple, really. I oven-roast tomatoes, garlic and roasted peppers, mush it all up, and as I add it to my freezer containers, I put in a handful of fresh basil. It is so good. I do this three or four times during the summer, freezing a dozen containers at a time, and all winter long we have the taste of summer just waiting to be defrosted.

While buying fruits and vegetables from farmers means I’m cutting out the middleman, which saves money, the best part is that I’m supporting my community and buying locally.

I buy in bulk. Yup. No small rolls of toilet paper, kitchen paper or tissues for me. No little bottles of laundry soap. I’ve saved as much as 50% buy buying in bulk on sale. I have the space to stash tons of extra stuff and bring it out when I need it, so if space is at a premium for you, you’ll have to weigh the benefit of balancing your coffee table above tins of tuna, or get creative on storage (think under the bed, at the back of the closet, in the garage). Sometimes it makes sense to join up with a couple other people and share items you can buy in bulk at wholesale prices.

Except for pre-roasted chickens, which I consider a deal, I don’t buy pre-made meals. I can’t stand the lack of value. Yah, I know, it’s easy, but you get so little food for what you pay. I just can’t do it. So I bulk cook at home and freeze. Today Ken and I made a stew first thing. When it’s ready, we’ll take the first two servings out and freeze them. Then we’ll enjoy the rest of the stew this week, for dinner tonight and then for lunches. The extra servings will come in handy on a day when we’ve just run out of time.

I don’t take the kids when I go shopping. Every time I take the kids with me, I end up spending $30 more. It’s not that they’re buying candy or chips; it’s their susceptibility to packaging and new ideas. And, to be honest, when they show me what they want, I’m usually intrigued enough to want to give it a try. So up goes my bill.

I always shop with a grocery list. We keep a running list at home. When we open the last, I buy a replacement for the cupboard (unless it’s on sale, in which case I buy 6). The list not only keeps me on track, it stops me from impulse shopping based on fabulous merchandising on the part of the supermarkets.

I shop in a less-expensive store. I actually really like my discount supermarket, so this is no test. I pick up whatever I can’t get there at my full price store, but do 80% of my shopping in the less-expensive store. The other day, the store owners - Lori & Mike - set up a grocery basket of typical buys they had comparison shopped at the other store and showed that the basket cost $50 less in their store. Smart!

I recently got myself a PC credit card - switching from my Airmiles credit card, which I found offered less benefits of late - so I can build up grocery points.

I don’t buy anything in convenience stores. Why would you pay $1.50 for a bottle of water you can buy (and freeze at home so it stays cold all day) at the supermarket for 10¢? If milk is cheaper at the convenience store, okay. But nothing else is, so don’t even go into the store.

Okay, it’s your turn. What tips and tricks do you use to save money on food?

One of the questions I’m always hearing is, “How much should I be spending on groceries?” I don’t know. How many people are you feeding? Do any of them have special dietary needs? Do you make a lot of money, or are you barely putting food on the table?

There are so many variables involved. People who are determined to eat organic will pay more for their food. People who survive on pasta will pay less. If you’re a big meat or fish eater and only like the best, your grocery bill would stagger the single mom of three making her own pizza at home.

According to Statistics Canada, the average Canadian family spends $9,630 a year on food, which would work out to be about $185 a week. And that’s just food. It doesn’t include personal care, household cleaning, tobacco, alcohol or lottery tickets - things we often add to our carts.

There are ways to trim back on your food costs. Here are some that I use:

• I know what stuff costs so that when I see a deal I can buy in bulk. So when salmon hits 99¢ a tin, when coffee goes on sale, when toilet paper is a bargain, I stock up. It’s not going to spoil so I buy lots.
• Since companies use different sizes and formats for their products, shoppers can get confused. Just think of all the different versions of diapers out there. Whew! If you don’t calculate the per unit cost, it virtually impossible to tell what is a deal and what isn’t. Just because the package is bigger doesn’t mean the cost is lower. (I learned that lesson the hard way.)
• If you go shopping and something you’re looking for that’s been advertised is not in stock, make sure you get a raincheck so you extend the sale and get what you wanted at the best possible price.
• I do most of my shopping in a discount grocery store. It’s been estimated that you can save up to 30% just by switching your supermarket. Hmmm. That would be $45 in savings on a $150 food bill. Over a year, that’d be over $2,300. That sounds worthwhile, doesn’t it?
• I don’t skimp on my food budget, but I like to get the best deal, so I shop where they don’t build the price of shopping bags into the cost of my food. I actually use bins most of the time. Since I can pack my bins by destination (one for the freezer, one for the pantry stuff, one for the fruits and vegis), I save time using them.
• I’m also a big believer in buying the stuff that’s just about to expire. Monday morning I picked up some lamb chops, a pork roast and a steak for half off. I cooked ‘em all (the lamb chops in a soya/marmalade sauce, the pork with a ginger/lemon marinade) and left them in the fridge for the fam to eat whenever this week. This is another way I save time: I batch my cooking.
• I take full advantage of the rewards programs offered by my grocery stores. That way I can convert food purchases into gifts or travel savings. And because I buy my gas at the station associated with my grocery store, I save 2¢ on my gas, which I immediately apply to my groceries so the coupon doesn’t disappear before I can use it.
• I use coupons. I’m not rabid about this, but I do collect coupons for the products I usually buy and them use them to save. I particularly like to use the coupon when the item is on sale since I feel I’m getting even more bang for my buck. 
• I shop with a list. This is the single best way to manage your food budget. Over and over I’ve assigned the “shop once and with a list” challenge to people on the show and they are gobsmacked to see how much they save.