I was recently reading a Consumerist article about the reasons why some people tend to spend a lot more money when ordering a pizza online versus via phone or in person. The article focused on primarily social reasons—that we tend to let our personal gluttonous tendencies flourish when we don’t feel that we’ll be judged for them. In the case of ordering online, there’s no one on the other end of the phone or behind the counter who can say in their head, “You really want 25 toppings on your pizza?”
Now while I get that’s likely one of the factors involved—the idea that we can order whatever we want without judgment through an impersonal device—I also think there’s an issue of budgetary awareness that is at play as well. Dave Ramsey teaches people to use cash as often as possible so that they can feel the money they’re spending—the concept that physically handing over a $20 bill is harder than simply swiping a card.
This can be magnified when purchasing online. The wonders of technology have made it possible to order pretty much anything you can think of and have it delivered right to your door. It’s easy to get caught up ordering more and more stuff without considering the financial consequences because it’s just so darn convenient.
But online shopping is an area of personal finance where we need to be all the more diligent with our choices so that we don’t break our budgets. Online shopping at the least should offer us the convenience at the same price as a local store, and at best it should offer savings on top of that convenience.
Be aware of the fact that you’re going to often pay a premium for some products purchases online. You see this most often in non-physical goods such as movie and concert tickets. It’s really tempting to pre-order your movie tickets online to make sure you get seats to that hot new movie—but you’ll pay a premium for the privilege.
We excuse these expenditures by saying, “Time is money.” Well, that’s fine, but when you’re deep in debt or working hard toward a financial goal, why not invest a little “sweat equity” and spend the time it takes to drive to the movie theater early and pick up your tickets in person? Sure, for some things like concerts or sporting events that sell out quickly, you can’t wait until you get to the venue to buy tickets—not to mention some events are not sold exclusively online. That’s fine, just be sure to budget for the extra expense.
As above, awareness of how much you’re spending and why should remain at the forefront of your mind. It’s far too easy to log onto Amazon and add some stuff to your cart and click “Buy Now.” Like me, many of you have an Amazon account with your payment information stored so that you can have products on their way to you in one simple click.
There’s nothing wrong with this. My family has probably saved hundreds of dollars buying from Amazon and other online sources, but it was only through purpose and intentionality that we did so. It would be really easy to add a bunch of stuff we want to a cart and hit the buy button and persuade ourselves we saved money because we have Prime free two-day shipping. But have we really saved anything if we bought things we didn’t need or had budgeted for?
Ultimately, with particular exceptions, your online shopping should save you money. If you can’t get something less expensive than purchasing it at a local store, then why bother buying online? Don’t get caught in the trap of convenience.
Not only should you be comparison shopping what’s available online against local in-store prices, you should be comparison shopping online. Check around for special deals and coupon codes to see if you can get a better price than what’s being offering at your usual online shopping stops. Learn to be patience and give yourself a day or two to dig deep and find the best deal you can get.
I’m Jeff M. Miller, and I help ordinary people who are stuck in a rut change their behaviors so they can be extraordinary. I’m an entrepreneur who retired from my full-time job in my early 40s to work from home. I’m a financial counselor, life coach, graphic designer, and passionate believer in helping others improve their lives a little more each day.