Have you ever received rewards for providing a retail store your email? How about when you receive a certain amount of rewards as a cash value on your next purchase? Store rewards can be a lot of fun to receive because they are free money. But, if you’re not careful, it’s all too easy to spend even just a teeny bit over that free money balance on your next visit to the store. And, you can find yourself tapping into your savings to cover the balance.
The reason we are addressing this savings topic in today’s Post is because of a recent experience I had with a store rewards certificate. In brief, I visited a retail store, which I don’t frequent, and was willing to hand over my email address to sign up for their rewards program. No problem. It was free to do it, and in return I was to receive a rewards certificate for $10. Awesome!
After receiving several reminders that my $10 store rewards certificate was about to expire, I carved out the time during lunch to swing by the store. I didn’t need anything, but on the other hand I didn’t want to lose out on free money. Once I entered the store, it didn’t take too long to discover that $10 doesn’t go too far, at least where I was shopping. I essentially had two choices:
Choice #1: Pick something practical and leave some rewards money unused.
Choice #2: Pick an additional item and pay the difference.
Can you guess which choice I made?
While standing in the checkout line, I chatted with one of the shoppers. She had two sets of tennis shoes. They were fun, colorful, and seemingly a deal because they had been discounted. My fellow shopper confessed that she “really shouldn’t be buying these, but I like them.” She also added, “Besides, if I come back later, they’ll be gone.”
When it was my turn at the checkout, I handed my $10 rewards certificate to the clerk. She rang up my purchase and then offered a suggestion. “Don’t you want to buy something else? You’re going to lose $3? I replied, “No, thank you” and completed the transaction. I now have a really nice pair of nylons.
Now, before you think I’m really a penny pincher, well, in this case I probably was. However, I actually learned some interesting lessons not only about my choices, but the comments made by the other shopper. It got me thinking about the personal finance concept of “wants” versus “needs” and sticking to a budget. Let me share some of these with you.
Lesson #1: It takes willpower to shop with “needs” in mind
Let’s be honest here. There are so many things our money (cash or credit) can buy. But, when it comes down to it, making financial decisions based on our needs, not our wants, can be really tough. It takes discipline to say, “No, I really don’t need that!”
Lesson #2: It takes willpower to stick to a budget!
Building on lesson #1 above, it takes tremendous willpower to stick firmly to a budget. When we create a budget, we can do it using a sensible, crunch the numbers approach. When we are out in an environment where we are influenced by what we see, hear, smell, and touch, it’s easy to put aside the budget.
I’ll be the first to recommend taking advantage of store rewards and leverage the benefits that come from participation. But, for all of us who are working every day to be money smart consumers, I encourage you to exercise the willpower to temper our wants and needs and stick to your budget. In the long-term, we’ll all be happier for sticking to our money goals.
Tips to Read:
How Smart Shoppers Use Rewards Programs, by Larry Bills, U.S. News & World Report, February 24, 2014
Although the article is dated, there are some good tips to glean.