A good deal does not equal a good buy

I know plenty of people looking for the elusive “good deal.”  My mom is one of those people. She loves to shop, and she’s always looking for a good deal. She would always boast that, “I saved so much money,” thinking that she got some great deal, when really she was just buying crap she didn’t need.  She has been a pretty frugal person as well - buying only used cars and not racking up debt. But antique shopping (which is generally pretty inexpensive) and clothes have always been her vice. I think she likes the thrill of finding something nice that is inexpensive. That really is her addiction. Typically she would do her clothes shopping at Marshalls or TJ Maxx (she told us a few years ago that she wants her ashes scattered in the women’s section at TJ Maxx), scouring their stores for the very best deals. When antiquing, she would get up early to get the best stuff, and would always ask, “Can you do any better?”  She would “save” so much money by bargain hunting!!!   

What she and many others don’t seem to get though is that if something costs $300 normally and you see it on sale for $200, you didn’t save $100, you spent $200!  Why don’t people understand this?  I hear people all the time say “I got a great deal”.  If you got a great deal on strawberries, or a 50% reduction on daycare expenses then that’s a good buy!  If you got 50% off on a 60-inch TV to replace your 50-inch TV, that’s not a good buy, that’s an unnecessary purchase!

Instead of asking whether it’s a good deal, you should ask, “Is that really a necessary purchase?” Do you really need a new refrigerator because you want stainless steel instead of black?  Do you need that 40^th pair of shoes or a power wheel for every child in your family? Probably not. Can’t your 2^nd or 3^rd child have hand me down clothes from older siblings?

So buying something that’s on sale is NOT saving money. It’s spending money on something that you didn’t need, that you just WANTED.  If you can differentiate the WANTS from the NEEDS and put that excess in savings and investments you’ll be able to live a fuller and less stressful life.