“What Should I Do with My Money?” author Brian Kuderna shows how consumers can avoid falling into the “frugality” trap and stay in control of their finances.
“Saving money” (spending more to save money) is an old “trap” with a new name that extends to grocery stores, retail stores, and even online gambling.
While there are times when it’s worth ‘saving money’, one personal finance expert has outlined how consumers can avoid becoming ‘victims’ of marketing tactics.
“The whole concept of ‘saving money’ is to get consumers to buy more,” said the founder of Kuderna Financial Team, “What should I do with my money?” Author Brian Kuderna said: Fox News Digital.
“We see examples like that across the economy. What hurts consumers is that they encourage them to spend more money than they have to because they feel like, ‘Okay, we’ve got a deal.’ .”
The value of $100 has fallen significantly in recent years, reducing purchasing power due to inflation.
Some of the most notable “save” deals include promotions like “buy one, get one,” in-store “cash” to use toward future purchases, free gifts, and even “subscribe and save.” There is a program.
“They’re all just different marketing strategies to get consumers to buy more, and in some cases that works well,” Kuderna said. “If you used a coupon to get what you needed and also got a bargain at the same time, it would certainly be a win-win. But as we have seen time and time again… that is not the case.”
“Kudlow” panelists Kevin Brady, Art Laffer and Sandra Smith discuss how “Bidenomics” isn’t gaining traction with voters.
Americans have struggled for years under the weight of inflationary pressures and rising prices following coronavirus lockdowns, with more households relying on credit cards to make purchases.
From 2021 to the end of 2023, credit balances increased by 47%, the highest three-year growth on record. Credit analysts also predict that credit card debt is likely to hit a record high in the first quarter of 2024.
At a time when finances are tough for many American families, Kuderna offered advice to consumers on how to overcome the “thrift” trap and stay in control of their money.
“The best way for consumers to approach a money-saving sale is to pretend it doesn’t exist, as if they’ve never seen it,” he said.
Gen Z is more reliant on credit and has more debt than millennials
He stressed that consumers first need to remind themselves to “buy what they mean to buy.”
“Don’t buy what you feel you have to buy. Then you become like a victim of a marketing strategy. And that’s obviously good for the retailer, but not good for the consumer. .”
He also cautioned consumers to be “cautious” when it comes to store credit cards, despite sign-on bonuses and cardholder perks.
“The reason there are a lot of these really great perks is because these store credit cards are so profitable for those retailers, and people who carry balances can access them from time to time. What you end up spending on interest, like store credit and late fees, can pale in comparison to the small savings you get when you open a credit card.”
Financial planner Brian Kuderna explains the savings trend and outlines how consumers can avoid falling into its trap. (Getty/Fox News Digital)
Kuderna also advised consumers to turn off app notifications or unsubscribe from emails if they feel “seduced” by such marketing messages.
“Finally, something I sometimes tell people is: [spaving deals] is based on bulk purchases, and bulk purchases due to economies of scale are of great benefit to consumers. But again, it’s not like we’re going too far and starting to create waste,” Kuderna added.
“Know what you want to get, and if you want to go there, go there. “I can’t get in,” he said. “Now you need to consider what your net savings would be if you actually took advantage of these savings deals.”
As “frugality” traps become more common and spread to new areas such as online gambling and streaming services, Kuderna urges consumers to be cautious and avoid becoming financial victims.
“Sometimes you just have to sit back and go back to basics and say, ‘Okay, am I getting what I’m paying for here?'”
CLICK HERE TO GET FOX BUSINESS ON THE GO
