Friday Financial Tidbit-The Power of a Sale

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Everyone loves a good sale. Why wouldn’t we? It’s a great way to get a good deal and save money at the same time, especially if you were going to purchase the item already. But a lot of times we can get suckered in by the “SALE!” sign and in the end spend more money than if there had been no sale at all.

I have two stories that exemplify this perfectly. The first was when I was in high school and beginning college I worked at the local grocery store, which helped put me through college. My job was to stock the shelves and make sure all the aisles were full. One day we had a pallet cart of canned mushrooms leftover from Thanksgiving that we needed to get rid of. A coworker and I asked the store manager what to do with them and he said to simply put them on an end shelf and put a sale sign on them. Problem was that the sale price was identical to normal retail price. I thought this would never work and was silly, but I did it because the boss told me to. Turns out, however, that over the weekend we sold all the canned mushrooms!

Another example is from when I was in college. I signed up for my first credit card because the cashier at the store said I could save 10% on that purchase. But if that wasn’t enough I additionally received coupons in the mail every few months giving me 15%, 20%, or even 30% off my purchase! Sounds like a great deal huh? But not when you buy 50% more clothes than you normally would have just to save 20%. All I was doing was simply overspending because I thought it was on sale.

So when it comes to sales it’s important to remember that it’s only a good deal if you can afford it yourself. If you planned and saved up the money to make the purchase, sales can be a great thing. However if you just bought something simply because it was on sale, well you didn’t get a good deal. You just overspent.

Have you ever overspent on a sale? Why do you think we overspend on sales?

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