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This Psychological Trick Will Reduce Your Online Shopping

By Frugaling 12 Comments

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Cash Register Picture Online Shopping

The rise of online shopping

Amazon.com went live in 1995. The site quickly became the largest online retailer in the world. Bookstores have been decimated by shopping online and ebooks. The war has largely been fought, and the brick and mortar stores are disappearing. Aside from making it difficult to find a book at your local retailer, shopping online can be a tremendous convenience.

The gateway to online shopping starts with your 16-digit credit card (debit, gift card, etc.). After every order, you’ll be required to enter your shipping and billing addresses, contact information, and your payment method. Credit cards are wonderful tools for these online shops, and they’re safer due to complete fraud protection.

There’s just one problem: convenience can wreak havoc on a healthy budget.

Credit card numbers are easy to memorize

They do it. This is aided by websites that save your billing information for later purchases. For instance, Amazon.com — by default — tries to save your credit card details. Then, when you go shopping again, you’ll just be able to select the card. In seconds, you can have your new products. It’s so easy on Amazon.com that they even have a one-click buy button.

You do it. I’ve been shopping online for years, and noticed only quite recently that I memorized a couple of my 16-digit credit card numbers. How? Excessive purchases over the years, but also a training process. Unless you’ve lost your card, had it stolen, and/or suspect fraud, your number generally doesn’t change. If you’ve had a credit card for years, you have more exposure to the same digits. Memorization is made easy and purposeful.

Delay the purchase, reduce the urge

Research shows (and trust me, Amazon is listening to it) that aiding consumers in making impulse buys equals more money. If I can reduce the time and effort to make you spend, you’ll come back and spend more over time and in single sittings. Pretty awesome if you’re a Fortune 500 company with a near-$400 stock price! If you’re an average Joe or frugal Jane, this can mean trouble. Here’s a two-step solution to this problem:

“Lose” your credit card. The first step is to call the credit card company and tell them you can’t find your credit card — you’re worried you lost it. Once you do this, they will issue you a credit card with new numbers. This will restart the number learning process and delay new purchases online, as you’ll be able to think more critically. After all, critical thinking takes time — you owe it to yourself. Note: you won’t be able to use the card anymore — you’ll need a backup card for a week.

Delete your details. If you’re an Amazon.com shopper, delete your billing details off the website. You’ll have to add them again at a future purchase, but having the inconvenience may actually mean less money spent. Give yourself time to think, “Do I really need this?”

Memorizing a credit card number — as the retailer or consumer — is trouble for a delicate budget. This simple psychological trick of slowing your purchase down can significantly reduce your spending and keep you on track for a frugal future.

Filed Under: Save Money Tagged With: Amazon, Budget, Consumerism, Credit Card, Memorization, money, Numbers, Online Shopping, Psychology, Purchases, research

My Amazon Kindle: A Eulogy

By Frugaling 12 Comments

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Amazon Kindle Broken Photo Ereader
My Amazon Kindle is broken…

From drooling wimp to reading aficionado

I don’t think I read one required book cover-to-cover in all of high school (sorry, teachers!). I didn’t enjoy reading, much to my mom’s dismay. Spark and Cliff notes eliminated the “need” to dig through the deeper meanings with tomes like Homer’s The Odyssey. I skated through high school, inspired by my brief overviews and a charismatic charm that filled in the missing plot gaps. It mostly worked.

In college, reading for enjoyment actually clicked. My grades improved and I found extra time to catch up on what I had missed. There was a simple equation: Read more to write better. Suddenly this drool-inducing, boredom-ensuing activity became relaxing and rewarding. I saw the value of it all.

A 21st century device for an age-old pastime

The transition from book avoider to avid reader was cemented by the purchase of an Amazon Kindle in college. As a nerd, geek, and all-around techie, the Kindle was the perfect blend of generations – reading power in the 21st century. When the slimmer, sleeker 3rd generation device launched, I purchased one immediately. It’s been with me ever since.

From Costa Rica to New York City, it was always with me. I chucked it onto the kitchen table, stuffed it into my backpack, and spilled a glass of orange juice into the keys. Frankly, I treated it like another paper-based book. Despite my harassment, the Kindle followed suit and kept up with my travels. Now, around four years of age (about 40 in tech years), I regret to inform you that it’s died.

When I got to school today, it refused to turn on. I followed a number of troubleshooting guides, too – no luck. There was nothing I could do, as the screen simply wouldn’t wake up or change pictures.

This shouldn’t be my gut reaction…

You might wonder why I’m writing about an inanimate object, when I aspire and espouse for a minimalist and anti-materialist lifestyle. Thanks for keeping me honest, readers! The real reason is that the loss of one object often begets a question: What’s next?

What should I get? What will be a frugal upgrade? Should I even buy another? How about a tablet, instead? What’s my price range?

Despite the eulogy, it’s felt more like an inconvenience on the way to an upgrade – another lifestyle inflation. The rapid replaceability swept the feelings of loss quickly under the rug. As I work to right my budgetary problems, this seems like room for error. The immediate reaction to buy another something – better and possibly more expensive – speaks to a disrespect for the exchange of money.

In the past, my gut reaction would be to purchase that next new device. Instead, I’m going to wait and make a frugal, informed decision that feeds my desire to read and fuels my budget. That is what’s next for me.

When you break something, what’s your gut reaction? Have you ever immediately purchased a new item to replace the broken? Or, do you take time before buying another?

Filed Under: Minimalism Tagged With: Amazon, Books, broken, ebook, ereader, kindle, Lifestyle, Minimalism, Tech

Why Are College Textbooks So Expensive In The Google Age?

By Frugaling 13 Comments

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College Textbooks price problem
Photo: xshamethestrongx/flickr

We live in the greatest information age ever. Bandwidth, storage, data, smartphones, and computers are cheap! With a carrier contract, you can have your first Android or iOS phone for free. For as little as $200, you can buy your first computer – brand new. These devices used to be expensive and less powerful – a luxury for the wealthy, subject of study in academia, or business tool.

The decline in prices is largely attributable to Moore’s Law, which asserts that the number of transistors on circuits doubles approximately every 2 years. These advances have contributed to the accessible age for information – spanning vast income demographics and socioeconomic factors. Unfortunately, college textbooks haven’t seen these progressive declines that could attract larger audiences.

Information Is Stuck Inside A College Textbook

Major publishers of textbooks (i.e., Pearson, McGraw-Hill, and Reed Elsevier) have long held dominant control of the industry. Despite vast sums of encyclopedic information moving to free sites like Wikipedia, these publishers have courted the strongest academics to publish on their platforms. With this control and profit model come crushing prices for students.

Academics, largely coming from older generations – before the popularization of the Internet – are content with this publication model (or, they must be if they keep hawking them at the beginning of every semester). When they are recruited to write for these publishers, their knowledge is condensed, controlled, and synthesized. Unlike the Internet’s anarchic flow, an elite few choose what is shared.

Most businesses follow free market principles of supply and demand, but the textbook industry doesn’t follow those same rules. Their supply is infinite and their demand is solely based on their marketing tactics to professors, and the network that professors have with authors. In turn, this stifles competition for pricing – making every book unique and “worth” a premium price.

New College Textbooks Are A Small Fortune To Buy, Make

Publishers use rich text, color, paper, and often publish in hardcover. All of these materials are beyond necessary and contradictory to the principles of progress that are present in this information/Google age. The quality materials give even more reason for publishers to charge more for the college textbooks, but oftentimes you won’t ever reference the book again.

If you are unlucky enough to buy a textbook during an edition update cycle, your $200+ purchase price may lead to an abysmal resale value. New editions are constantly released, usually with minor changes that are imperceptible to the casual reader. This forces students to buy newer and newer texts, and professors are encouraged to hawk these latest editions because they are given free instructor copies. Effectively, this artificially manipulates the supply for certain level textbooks.

When new textbooks come to market, they can easily fetch nearly $200 or more. That’s 1000% more than most popular hardcover novels at Amazon.com. While the Internet has made for more free stuff than ever, textbooks seem to be stuck in the three-decimal price range. Technological advances seem to be overlooked when it comes to price considerations.

Google Search Economics Answers
Google, What’s Economics? (Click to enlarge)

Online, Electronic Platforms Were Supposed To Bring Price Declines

Despite the significant, onerous budgetary demands that these expensive college textbooks place on students, professors seem happy to assign them as “required” for the course. Every class I’m taking this semester emphasizes the need for certain textbooks. It seems like professors willingly participate in this complicated price fixing.

While technologies have improved, the prices of textbooks haven’t fallen. Moreover, even though ebooks and online books are becoming more popular, they are usually the same price or a smidgen cheaper than their concrete brethren. Unfortunately, this small price decline (sometimes) does not account for the fact that the digital textbooks cannot be resold. By purchasing an online book, you are limited to that world and restricted from recouping some of your losses.

A Plan Of Action Going Forward

This semester I refuse to buy a single college textbook. It’s not that I believe we should abolish them, but make them more accessible. Even though I won’t purchase one this semester, I use every campus resource I have to get access to them. Thankfully, as part of the Big 10 system, I can request books from every library within the network.

Next time a professor says a college textbook is required for ask, it’s worth asking them:

  1. Did you get a free instructor copy of the text?
  2. Why are you promoting this particular text and edition?
  3. Are there any free methods (i.e., Wikipedia, online editions) to getting access to this information?
  4. Would you buy this textbook if you were taking this class?
  5. Will we actually reference from this throughout the semester?

Filed Under: Save Money Tagged With: Amazon, Books, college, expensive, Google, Information, knowledge, McGraw-Hill, Pearson, price, Reed Elsevier, school, textbook, university, wikipedia

10% Tax Refund Bonus With Amazon.com And TurboTax

By Frugaling 5 Comments

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TurboTax has been updated for 2014!

Intuit Turbotax Deluxe Federal State Refund Return Program

This year, Amazon.com is bringing an awesome promotion that could net you a serious bonus on your tax refund. The online shopping company is offering anybody that downloads TurboTax through their website the opportunity to use a portion of their refund to get an Amazon.com gift card.

Let’s say you get a $2,000 tax refund after calculating all your deductions and savings. By downloading Turbotax with this Amazon.com bonus, you can select a portion of funds for the bonus. It’s pretty simple, too. Choose $500 from your tax refund to go into an Amazon.com gift card and you’ll receive an extra $50! Not only does this pay for the price of TurboTax Deluxe, it also offers you a rapid way to use your return.

Amazon.com Gift Card Federal Refund Bonus OfferWhat I like about TurboTax

  • TurboTax is an intuit product (they own Mint.com, too)
  • It automatically calculates deductions and checks to make sure I’m getting the largest refund possible
  • The company works with collegiate expenses and student loan payments to save even more money
  • Each year’s refund and return is collected for the next year, which saves a ton of time in preparation
  • The program includes state and federal e-files for rapid returns and paperless refunds
  • By downloading from Amazon.com, it includes 5 free federal tax return files
  • Using TurboTax is a terrific preventor of getting audited, as it checks to make sure you’ve included everything
  • Instant download for Macs and PCs

Follow this link to get this year’s version: TurboTax Deluxe Fed, Efile and State 2014 with Refund Bonus Offer

Filed Under: Make Money Tagged With: 10 percent bonus, Amazon, Amazon.com, Bonus, Deluxe, end of year, fiscal, Intuit, Return, Tax prep, tax refund, taxes, Turbotax

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