Avoiding Regret Purchases this Holiday Season
When Bernadette Joy and her husband were paying off their $300,000 in debt, she didn’t nix shopping altogether. Instead, she came up with her own measure for cost per use that helped her make better decisions. This holiday season, that same method may help consumers avoid regret purchases.
The $1 Rule
Joy, a financial coach and debt repayment expert, found that the financial tips she received were unrealistic and didn’t resonate with her. Instead, she developed the "The $1 rule," which she details in her new book, "Crush Your Money Goals." According to Joy, the rule is her twist on cost per use or cost per wear, simplified to say, "it’s OK to buy something if it comes out to $1 per use."
For example, when a friend was looking to buy an expensive couch, Joy used the $1 rule to help him figure out it would be worth it as long as he kept it for five years and used it daily. The rule has also helped Joy personally avoid buying low-quality items or things she won’t use often.
Impulse Purchases Can Lead to Regrets
A record 183.4 million people are expected to shop both online and in-person in the five days from Thanksgiving through Cyber Monday this year. More than half of consumers – 57% – say they plan to shop then because of deals that are too good to pass up. However, those impulse purchases can lead to regrets. Research from Bankrate found 54% of adults made at least one spur-of-the-moment purchase last holiday season, and 57% of consumers regretted at least one of those transactions.
Take a Pause Before Buying
To avoid expensive purchases that may lead to credit card balances from month to month, it can help to take a moment and pause before making a purchase. Other shopping tips can also help you get the most for your money this holiday season, such as choosing experiences over material things and being cautious of retailers’ time-sensitive offers.
Conclusion
By implementing the $1 rule and taking a pause before making a purchase, consumers can avoid regretful shopping habits this holiday season. Remember, good deals can lead to impulse buying, but it’s essential to consider whether the item is worth the cost per use. With the $1 rule and a clear budget, you can make informed decisions and avoid buyer’s remorse.
FAQs
Q: What is the $1 rule?
A: The $1 rule is a personal finance rule developed by Bernadette Joy, which states that it’s okay to buy something if the cost per use is $1 or less.
Q: How does the $1 rule work?
A: The $1 rule is calculated by dividing the cost of an item by the number of times it is expected to be used. For example, if a friend is considering buying a $100 product that will only be used once, the cost per use would be $100, which exceeds the $1 rule.
Q: What are some other shopping tips for avoiding regret purchases?
A: Some other shopping tips for avoiding regret purchases include choosing experiences over material things, being cautious of retailers’ time-sensitive offers, and comparing prices to ensure you’re getting the best deal.
