Spending Less is NOT the Same as Saving Money

As the holiday shopping season gets underway, there is giddy talk of how much money shoppers are saving this year.

Unfortunately, this is a mindset that is rather common among consumers.  We have this idea that we are “saving” money when we get a good deal.

The reality, though, is that you aren’t actually saving money.

You are just spending less.

Are You REALLY Saving Money?

The words we use have a big impact on our behaviors.

This is why many times, a sale or a coupon or a promotion is marketed as “saving” money.  After all, saving is a positive action.  We like to think that our saving efforts will lead to eventually becoming a millionaire, or at least to a measure of financial security.

If a big sale is marketed as a money saving event, consumers are likely to feel better about heading over to spend money.

And that’s the reality of what is happening.  You are spending money, no matter how great a deal you think you are getting.

Truly saving money means that you are actually setting money aside to work on your behalf.  If you are actually saving money, you are taking it and setting it aside somewhere safe so that it can grow on your behalf and help you build wealth.

No matter how you try to spin it, when you head out to a sale, you are still spending money.

Not saving it.

You may be spending less, but you are still spending.  The only way that you might be able to justify the idea that you are saving is if you had a planned purchase — an actual need — and you now have a way of spending less, and banking the difference.

Are You Actually Spending More?

saving or spending

Are you putting money away or is it leaving you when you “save?”

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Another problem with this idea of perceived saving is that you could actually spend more than you had planned.

Black Friday is a good example of this.  You think that the amount of money you are “saving” justifies more purchases.  You are saving money, you figure, so it’s okay if you splurge a little on this other unplanned purchase.

Indeed, in some cases it’s so easy to get caught up in the idea that you are saving huge amounts of money, that you spend more than you ever would have, normally.  The result is that all of those “savings” can actually add up to more debt than you thought.

In some cases, you might be better off spending a little bit more on something you actually need, than you would be be going out and “saving” money on several impulse purchases.  Spending money on something you can’t truly afford is still spending on that item, even if you saved 60% doing it.

Before you think that hitting all the sales is a great way to save money, make sure that you carefully consider the true impact of your shopping spree.  The reality is that you could actually spend more than you had planned, and that you probably aren’t really saving at all.

Think about How You Want to Use Your Money

Really consider how you want to use your financial resources.

Think about the consequences of a huge shopping spree, moving from sale to sale.  Can you really afford to spend such a large chunk of money in one day?  What will you have to show for it?  Will your money be working on your behalf?

Or will it be frittered away, sunk into consumables that you won’t even care about in a month or two?

Getting beyond the idea that spending less somehow equals actual saving is a good first step.

Whether it’s a coupon that inspires you to buy a more expensive product that you wouldn’t normally purchase, or whether it’s a huge sale offering 60% off items that will just clutter up your home, don’t mistake spending less for saving.

Instead, make a plan to actually save, and put your money to work for you.

It’s a better way to build wealth, and thinking this way can help you see beyond the hype that marketing types use to encourage you to spend more than you had planned.

How do you feel about spending less vs. saving?

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Published or updated December 4, 2012.

Comments

  1. Generally saving money on food is a great deal, unless you are saving on a more upscale brand than you would normally have bought. But there again, be careful – stock up on sale-priced non-perishables, but don’t go overboard on fruits and veggies that you won’t have time to eat before it’s time to toss them in the compost.

  2. To truly save the money put the amount you saved in the bank. Grocery stores and places like Kohl’s normally print out your “savings” on your receipt so that should make it easier.

  3. I’d say this doesn’t hold true 100% of the time. If you save money on things you already HAVE to buy like groceries, then spending more when you find a good deal will save you money in the long run (as long as you are disciplined enough to eat everything you buy).

  4. I do both! I always look for lower prices and so does my wife. I have been doing it so long that I no longer pay retail for any of my shopping. Everything is discount and only replacing what has worn out.

  5. Frugal living is necessary to reduce our monthly budget especially in food and grocery items. With rising living expenses and increasing food expenditures there are always a lot of means to lessen your grocery budget and save more for future investing or business capital.

  6. I completely agree with this. The whole concept of “I will buy this only if this is on sale” does not mean anything. It just means that you are falling prey to false lures of good marketing.

What Do You Think?

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