By Trish Savage, M.S., Family Financial Education Specialist
University of Missouri Extension, NW Region
According to the Center for Household Financial Stability, “The recession completely wiped out all of the income and wealth gains of the 1990s and 2000s; in other words, as a nation, we’re back to 1989”. Whether this applies to your household or not, today’s economic conditions call for deliberate and strategic decisions on purchases as you strive to live within your income level and spending plan.
The holiday season is upon us. If you have not started shopping yet, now is the opportunity to double check your savvy consumer habits – it will pay off! Door busters and special sales can entice shoppers. Some of the below items may be just reminders, but, as you make your buying decisions, it may help to bring them to your attention as you shop for the holidays and all year-round.
1. Advice and Research – Check with friends, family and consumer information for advice on products you are thinking to purchase – their experience with, usual pricing and dependability, etc.
2. Decision making – Before you even start shopping, identify your needs and expectations from a big ticket item and the limit of what you can afford to pay. Decide ahead of time what features are must- haves and what your “walk-away” limit is. Realize that a better deal may be around the corner.
3. Drip pricing and accuracy – As you finalize your purchase, check the receipt or final charge for accuracy and to make sure no surprising additional charges (drip pricing) were added to the advertised sales price. For example, the vendor may advertise just part of the total cost and add fees for mandatory charges for a cruise, vacation site, or add-ons that you assumed were basic for the product or service. A cashier may even just make a human error.
4. Financing – If searching for money to pay for a family gift, avoid sources that charge extraordinarily high interest rates such as a payday loan or rent-to-own business.
For example, instead of surprising your family with a 32 inch big screen TV, wrap up a box with a picture of the item that you have put on lay-away and tell them how you have made arrangements to save each month to bring the item home in the near future. Let them know how much the family will save by doing it this way. For example, an agreement from a rent-to-own for a 32” HDTV is $15.99 a week and equals “65 worry-free payments totaling $1039.35” compared to their “cash price “of $623.61. The price for a comparable TV at a national retailer is: $218 – $298. The teachable moment will be priceless for your children or significant others – and you’ll save up to $821.
5. Return or exchange policy – Before you buy, know the return policy. Ask questions like the following to clarify their policy: Do they allow returns and if so will they give a refund or store credit? Is there a time limit for returns or exchanges?
6. Receipts and important related documents – Have a place to keep all receipts, rebate coupons, instruction manuals, guarantees and warranties in one place. Make it a place you’ll remember and have easy access to!
7. Recipient or End-user – Take the time to really think about the person you are buying a gift for instead of just grabbing the first thing you see and hope they can use it. If you are not sure what they would like, buy something that you personally like, use and think it is a good buy. Chances are they will too.
8. Repairs – Ask if repairs are handled locally or if you will have to send the item away. Also ask who pays for both the shipping and repair.
9. Safety – As always, park in a well-lit area and near other cars. Be alert as you load and unload your packages. If you take purchases to the car and continue shopping, place them in the trunk or conceal them as much as possible. Before you enter your vehicle, scan the area around your vehicle and check the backseat for a possible predator.
10. Shopping online – when making your payment, check for accuracy of final charges and make sure that it will be transmitted securely. The URL will begin with “https” or the bottom right hand corner will have a padlock icon. Investigate any possible reviews offered on vendor reliability and product quality.
11. Stressful time – if you are going through a very stressful time, (like coping with a death, divorce, or period of heavy debt), post-pone or avoid making decisions for buying a big-ticket item.
12. Traveling – If shopping out of town, be prepared for inclement weather. According to MU Extension, “Even if you are not traveling far, you need to be prepared for the worst. It is important to keep in mind that of all the deaths in winter, 70 percent occur in automobiles”. In cold weather, be sure your vehicle is winterized, travel with your car having a full tank of gas, correct tire pressure and emergency provisions on hand such as a shovel, water, blanket, first aid kit, extra hats, gloves, etc.
For more tips and consumer savvy ideas, visit the below websites.
Center for Household Financial Stability, fall 2014, Issue 4 http://www.stlouisfed.org/email/HFS/2014/winter/HFS-Winter-2014.html
FTC consumer handbook: http://www.usa.gov/topics/consumer/consumer-action-handbook.pdf
MU Extension: Winter Weather Safety Tips for Rural Residents