Shopping tips – how to avoid over-spending
12 September 2016
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On mobile, on digital, on demand, this is Old Mutual Live, the Money Coach edition. Hello and welcome, my name is Chris Gibbons. With me in the Old Mutual Live studio, John Manyike, Head of Financial Education at Old Mutual. John, welcome, good to have you on board.
John Manyike: Hi Chris, thanks for having me.
CG: John, I sometimes wonder if we are as clever as we believe ourselves to be. Technology, computers, smartphones, all that stuff. Yet as consumers, we keep making some very basic mistakes when we do our shopping. Whether it’s weekly or monthly. Of course I don’t want to be unfair here, but it’s a fact that many of the stores encourage us to buy more expensive items. To buy items that we don’t really need.
We might want them, but we don’t really need them. Sometimes, of course, they will help us, thank you guys for all that help by offering us some expensive credit. We’ll look at that side of life in another edition. But in this edition of Old Mutual Live Money Coach, I think we need to look, quite simply, at some shopping tips. What are the things that we need to be aware of?
JM: Look, as you can imagine, a lot of retailers would invest in research and understanding consumer psychology. What makes people buy, buying patterns and all sorts of things. They know how to tempt or how to market their products. I’m using the word ‘tempt’ –
CG: We call it tempt, they call it marketing.
JM: They call it marketing, yes, a simple thing like putting sweets next to the counter as you’re leaving, as you’re going to pay. You didn’t plan to buy sweets, but because you’re on your way and there’s small sweets next to the counter, you end up buying. That’s impulse buying. Buy one, get one free, and all sorts of things, so they’re very smart. It also means we need to be very prudent when it comes to shopping. There are a couple of things we need to do.
Have a shopping list and stick to it!
CG: Give me some examples.
JM: Okay, first one is never go shopping without a shopping list. We don’t have the memory of an elephant. So if you go into a shop and you think you can do one month’s groceries with your head, you’re actually taking a huge risk there. Because you’re going to end up buying stuff that you don’t need. You might buy stuff that’s already in your cupboard, so you need to shop with a shopping list.
CG: Once you’ve made your list, you have to stick to that list. Often I have gone shopping with a shopping list and other items have caught my attention. I’ve added them to my shopping basket, that’s also a big mistake.
JM: That’s true, you need to be very disciplined when it comes to shopping. More often than not we get tempted to buy stuff that was not on the list. Because maybe all of a sudden you realise, oops, they have this big item. They say: Buy one, get one free and all that. It just looks like a bargain and you end up buying it and it wasn’t on the list. Some people might argue and say actually why not buy it, at least you don’t have to buy it next month. But that’s provided you actually have a budget for it. If you don’t have a budget for it, stick to the budget.
CG: The other thing about those buy two for the price of one’s is quite often if it’s fresh produce, it goes off. You don’t actually use it you wind up throwing it away which is terrible waste of food. It’s a sin where I come from –
JM: You are so right.
CG: And you’re not saving.
JM: You’re so right because a lot of these items they tend to say: Buy one, get one free, you find that they’re actually trying to get rid of the stock. So you need to look at the expiry date because what’s the point of buying six – I don’t want to mention brand names here because I’m going to get into trouble – but what’s the use of buying six items when you actually look at them and you have to consume them within a month. Because the expiry date is just around the corner. That’s actually wastage and you’ve done them a favour because you’re taking the stock off their shelves.
CG: And you’ve given them some of your hard earned cash.
Don’t go shopping on an empty stomach
CG: An old one I guess, I suppose from my grandmother’s day really is, don’t go shopping on an empty stomach.
JM: I like that, in fact that’s one of my favourites. I know some people will say no, you’re stingy. But the reality is that especially if you’ve got kids, if you’re going to go shopping on an empty stomach, you’re guaranteed a visit to one of the fast food outlets. Because they’re going to nag you until you buy.
But why not behave like it’s one of those Mother’s Day or Father’s Day, prepare breakfast for everyone in the house. Then you know that when you go there, you go shopping. There’s nothing wrong with spoiling your family once in a while. But sometimes if you make it a tradition, that when we go shopping we will go past some fast food outlets and have lunch there and so on. If you didn’t budget for it, rather eat before you go shopping.
CG: I suppose the variation on that theme is, shop alone, leave the kids at home.
JM: Sometimes it helps to shop alone, especially when you know you don’t have money. Because a lot of parents are embarrassed, you know when your kid is nagging and making a noise there and attracting all the attention. They want this car which is worth R500, you know they’re going to use it for one day, it’s almost like a disposable car. The next day it’s somewhere in the garden there gathering dust and so on. Sometimes it’s better to shop alone.
Should I shop around?
CG: What about shopping around?
JM: Shopping around is very helpful. There’s what we call ‘cognitive dissonance’, it’s a psychological term. You buy something and then you regret it later, you realise no, it was not the best buy. Sometimes you buy an item in one supermarket and then you learn that actually there’s a special in another supermarket.
The best thing there is to actually have pamphlets from different supermarkets and compare which items are on special in one and they’re not on special in another shop. Then decide what are you going to buy. Especially if you’re going to shop in a mall, you’ll find that these big supermarkets are there.
So it’s a walking distance from one shop to other, unlike where you have to travel quite a distance because the amount you spend on petrol to drive long distances to go and buy at another, it’s actually not saving. Because the petrol actually kills off your savings there. But if you go to a mall and you know there’s different supermarkets there and you’ve compared the prices, it might be a great idea to do that.
CG: Also getting to know which supermarkets have specials for pensioners on particular days, particular mornings.
JM: Absolutely, as you can imagine, as a pensioner, your disposable income has now shrunk a bit. So you want to stretch your rand, so capitalise on those pensioner specials.
Do not pay with credit!
CG: Finally, I guess, a golden rule, always, always, always pay cash, do not pay credit –
JM: Cash is king and in some instances, if you’ve got cash, you can negotiate. They’re saying the item is going for this price and you say look, I’ve got this much. You know, the worst thing they could say is ‘no.’ Especially if you really, really want that item. So try and negotiate around it, you might be surprised and get it for much less than what’s advertised for.
CG: You’re listening to Old Mutual Live the Money Coach edition on demand, visit dogreatthings.co.za. John, just zip through the list again, give me the key headings – smart shopping.
JM: Yes, shop around, compare prices, never do shopping without a shopping list, avoid impulse buying and use cash, cash is king and don’t go shopping on an empty stomach.
CG: This has been another edition of Old Mutual Live, the Money Coach edition, my name is Chris Gibbons. With me in the Money Coach studio has been John Manyike, Head of Financial Education at Old Mutual. John, if the listeners want more information, where would they go?
JM: Well, you can follow us on Facebook and you watch a lot of videos and a lot of posts where we teach people about different things, including this kind of topic. So follow us, like our page on Facebook, which is On the Money Financial Education Programme. Or on Twitter, follow us on Titter, which is OM_OnTheMoney.
CG: That’s the Twitter handle, thank you John. Get in touch any time and if you have any questions for either John or me or topics you’d like us to cover on Old Mutual Live Money Coach, please feel free to send them direct to me at email@example.com. We would be delighted to hear from you. Until the next time, thank you for listening to Old Mutual Live, on mobile, on digital, on demand.