Spaving – The Costly Side of Savings Deals

(3 Minute Read) — Everyone loves a good deal. But when that deal could be leading you to spend more than you intended, it might not be as great as it seems. Though this phenomenon, known as “spaving,” isn’t new, it’s become a trending topic on social media, encouraging spending in unexpected ways. 

Spaving, a blend of “spending” and “saving,” occurs when an individual spends money to save money down the line. Sounds intriguing, right? Well, it may be too good to be true. Experts warn that spaving can lead to overspending and financial stress, making it an important concept to be aware of. 

In this article, we’ll break down what spaving is, when you might fall for it, the potential downsides, and how to dodge its traps. 

How Spaving Works 

While spaving is cloaked in the concept of saving money, it’s really about those tempting deals that promise big savings if you spend a bit more. It plays on the psychology of getting more value for less money, which can be incredibly tempting. Retailers love using these tactics to get you to buy more than you planned. Here are some common scenarios where you might get caught spaving: 

• Buy one, get one free sales (BOGO): These promotions encourage consumers to purchase an item they may not need just to get the second item free. Even though you didn’t plan to buy any of the items in the first place, the deal can seem too good to pass up. 

• Bulk buying: Warehouse clubs and bulk sales promise lower prices per unit if you buy in larger quantities. This can benefit you if you’re shopping for a large group or purchasing items you consistently need, such as household supplies or personal care products. However, it can also lead to stocking up on unnecessary items. 

• Free shipping: Many online retailers offer free shipping if you spend a certain amount, prompting customers to add extra items to their cart to avoid shipping fees. For instance, if you notice you’re $20 short of the free shipping minimum, you may add another item to your cart rather than pay the $5 shipping fee. 

• Holiday sales and promotions: Black Friday, Cyber Monday, and other holiday sales often offer big savings. While this can be a good time to make purchases you plan for in advance, it can also lead to buying things just because they’re on sale, not because you actually need them. 

The Dangers 

While spaving might seem like a genius way to save money, it can backfire. Here’s how spaving can lead to financial trouble: 

• Overspending: The savings from spaving can be misleading. Spending money to save a few bucks often doesn’t make sense if it strains your budget or leads to debt. The thrill of a deal can overshadow the real cost, and before you know it, you’ve blown your budget. 

• Clutter and waste: Have you ever bought bulk items and then realized you don’t have space for them? Spaving can fill up your living space with things you rarely use, creating clutter and waste. 

• Increased debt: If you’re using credit cards to spave, those “savings” can turn into debt, leading you to buy things when you can’t actually afford them, simply because they’re on sale. On top of this, interest charges can wipe out any initial savings and add financial stress. 

How to Avoid the Pitfalls 

Never fear! You can steer clear of the spavings trap. Read the six steps you can take to avoid the pitfalls of spaving, created by Enrich, our trusted Financial Education partner.