THE BLOG
06/11/2013 03:22 pm ET Updated Aug 11, 2013

5 Common Saving Strategies That Can Lead to Overspending

In the event of an emergency, over half of Americans would struggle to come up with $2,000, according to a 2011 study by the National Bureau of Economic Research.

Many of us want to save more, but is it possible that in trying to save money, you could actually find yourself spending more? As a financial advisor, here are five different ways that I've seen exactly that happen -- and what you can do get yourself back on the savings track.

  • Couponing - The best way to use coupons is to make a list of what you need first and THEN look for coupons. Discipline yourself to only clip coupons for items on your list. The worst way to approach couponing is to just flip through the weekend circulars to see what appeals to you. Looking at all those glossy pictures and deals can trigger a perceived "need" in your brain that didn't exist before. As a result, you can end up buying more than you truly need.

  • Bulk purchases - Unless you are super organized, you can easily end up buying things on sale that go stale (in the case of food products) or buying more than you need (because you forget what you already have at home). Worst of all, by tying up your money in excess bulk purchases, you may not be using that money to enhance your financial freedom by taking actions such as paying-off high interest credit card debt. The best way to buy in bulk is with a careful, well-though out pre-shopping game plan.

  • Inexpensive clothes - My grandfather always said "Buy few, but buy the best you can afford at the time." The problem with disposable fashion (think cheap tee shirts and bargain priced accessories) is that because the price point is so low, you may be tempted to buy many more than you need ("Heck, since they are only $9.99, I should buy three"). As such, your total cost could be higher than buying just one great item. Also, since these items often don't last as long, you may have to replace your wardrobe more often than if you bought one high quality piece to begin with.

  • Store credit cards - You think you are simply making a smart move by saving 10% off of your initial purchase, but now you are on a mailing list for all sorts of promotions. Looking through those incoming catalogs or eMags can once again trigger demand where there wasn't any originally. Also, if you are late on a payment, interest and penalty rates can often be much higher on store cards than traditional bank cards.

  • Vacation specials - When you take advantage of an attractively priced vacation package, you may feel so great about it ("WhoooHooo, what a deal!") and end up splurging in so many other areas that you end up spending more than if you hadn't had a deal.
  • Bottom line, the key to effective saving strategies is simply to be as mindful and conscious as you can in your spending -- on or off sale!


    This post originally appeared at MoneyZen.com. For more MoneyZen in your life, follow Manisha on Twitter at @ManishaThakor, on Facebook at /ManishaThakor, or sign up to receive Manisha's MoneyZen blog via email by clicking here.

    Subscribe to the In(formation) email.
    The reality of being a woman — by the numbers.