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With inflation continuing to squeeze many household budgets, shoppers may be looking for ways to stretch every dollar.
But one common shopping habit can quietly work against those efforts, even if it feels like it’s helping you save money.
The behavior, sometimes called “spaving” — short for “spending to save” — happens when you buy extra items to qualify for free shipping, stock up on unneeded products because they’re on sale or spend more to unlock a bigger discount.
Instead of reducing your spending, these promotions can encourage you to buy more than you planned, leaving you worse off than if you’d simply stuck to your shopping list.
When that happens, “consumers are focusing on what they’re saving as opposed to what they’re spending,” says Dr. Charles Chaffin, a professor at Iowa State University and CEO of the financial psychology firm Money & Risk Inventory.
“The goal shifts from us being a pragmatic consumer … to ‘winning’ a transaction.”
That shift isn’t accidental, he says. Retailers are remarkably good at redirecting your attention away from what you intended to buy and toward the deal itself.
Why a bargain feels good
A few well-known psychological biases can make promotions difficult to resist, Chaffin says.
- Loss aversion: People tend to feel losses more acutely than comparable gains. That’s why a limited-time offer can make you feel like you’re missing out on savings by walking away, even if you never planned to buy the item in the first place, he says.
- The “pain of paying”: Promotions that encourage shoppers to spave can reduce what psychologists call the “pain of paying” — the discomfort people feel when they spend money. Instead of focusing on the extra $30 they’re spending, shoppers focus on the $10 they saved.
- Anchoring: Retailers often display a slashed “original” price next to the sale price, making the discount seem more valuable than it otherwise would.
Urgency also plays a role. Limited-time offers, countdown clocks and one-day sales encourage immediate decisions, leaving less time to consider whether a purchase actually fits your budget or long-term goals. It’s effective marketing because people are “hardwired” to prefer immediate gratification over future rewards, Chaffin says.
Taken as a whole, these forces can “hijack” the decision-making process, shifting your focus from whether you need an item to whether you’re getting a good deal, he says.
How to tell whether you’re actually saving money
Not every discount is a bad financial decision. For example, buying in bulk at Costco can save you money if you were already planning to buy the item and know you’ll use all of it, says Mark Sanaiha, a certified financial planner and founder of Macallen Capital.
But if “it’s creating a purchase that didn’t exist before, it’s not a discount—it’s a new expense,” he says.
Before spending more to unlock a promotion, Sanaiha recommends asking yourself a few simple questions:
- Did I already want this before I saw the deal?
- Will I actually use it in the near future?
- Am I buying to save money, or buying just to feel like I got a good deal?
If the answer to any of those questions is no, the promotion may be driving the purchase more than your actual needs, he says.
Chaffin’s favorite question is even simpler: Would I buy this if there wasn’t a promotion?
“It’s a discount if it’s on your shopping list,” he says. “If it’s not on your list, you’re spending more money than you would have otherwise.”
To give yourself time to ask yourself the right questions, Chaffin recommends creating a little “friction” before you spend. The goal is simply to slow yourself down long enough to decide whether you actually need the purchase. You can do that by shopping with a handwritten list, removing stored credit card information from retail websites or reminding yourself of a long-term financial goal before heading to the checkout.
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