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What You Need to Know About Online Shopping

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M. Ahmad Adnan, CFP®, CRPC®, RFC® / Financial Advisor / Business Financial Advisor - Ameriprise Financial Services, Inc. M. Ahmad Adnan, CFP®, CRPC®, RFC® / Financial Advisor / Business Financial Advisor - Ameriprise Financial Services, Inc.
Remember when you basically had two options for shopping?  Before the internet, you would either head to the mall or make a purchase through a mail-order catalog.  Times certainly have changed.  With the evolution of online shopping, purchasing items is as easy as the click of a mouse.  As online shopping has advanced, so have the techniques that companies use to influence you to make a purchase.  There is a science behind what sways people to purchase products.  Just like a store’s layout and product placement can encourage you to put an item in your cart, a retailer’s website can too.

More and more retailers, marketers, and ad agencies are using neuromarketing (marketing techniques developed from brain-science studies) to influence your feelings about their products, what you will buy, and how much you will spend.  These techniques make it harder to resist impulse purchases and can put a big dent on your finances.

For example, you may not realize how the colors, location of objects and text, or the order of prices on your screen influence your decision-making, but the people who put them there do.

What is more, unlike brick-and-mortar stores, which often have times they are closed, online shopping is available 24 hours a day, seven days a week from your computer or any mobile device.  So, if you have a late-night urge to splurge, it is easy to do so.

Here are six tips to keep you in check when shopping online:

  1. Determine what you are going to buy before you go online — Make a list of the items you need and then stick to it.  Avoid clicking on other related items or recommendations such as “People who bought this item also purchased …” to limit the temptation to buy more than you planned.
  1. Limit your shopping time so you are focused and efficient — Just like you can only put so much in your cart at a brick-and-mortar store during a quick stop, you are less likely to load up on items you do not need online when time is of the essence.
  1. Set an online shopping budget and do not waver — Then, comparison shop to get the most bang for your buck.  Also, perform a quick search to see if there are any active coupon codes for the site from which you purchase.  Whether it is a percentage off an item or an entire purchase, or an offer for free shipping, coupon codes can add up quickly and help you save big.
  1. Be wary of online auction sites — Online sellers know how to exploit the adrenaline rush and excitement of online bidding, which means you could end up paying more for an item than it is actually worth if winning the auction outweighs the value of the item.  If you do shop them, be sure to know an item’s true value and commit to not spending more than that amount.
  1. Do not shop when you are not at your best — Just like you should not go grocery shopping when you are hungry, you should not shop online when you are stressed or in an urgent need to buy something.  Doing so might make you more vulnerable to purchasing items you may not really want or need.
  1. Track your spending — Whether you buy smaller-ticket items — such as an app, music, or movies — or larger-ticket ones, it is easy to lose track of how much you spent.  Make a list or track your spending on a spreadsheet.  Also, there are several programs and free personal finance websites that can help you log your online — and offline — spending to help you stay on top of these expenses.
For more information on how to set a budget, consult your financial professional.  A financial advisor can help you develop a strategy to help you to meet your financial goals.

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Ameriprise Financial and its representatives do not provide tax or legal advice.  Consult with your tax advisor or attorney regarding specific tax issues.

Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc.  Member FINRA and SIPC.  Some products and services may not be available in all jurisdictions or to all clients.

This communication is published in the United States for Texas only; and this advisor is licensed only in the states of CA, CO, FL, KS, MO, NC, NM, OK, TX, and VA.

M. Ahmad Adnan, CFP®, CRPC®, RFC®
Financial Advisor
Business Financial Advisor

Ameriprise Financial Services, Inc.
3200 Steck Avenue | Suite 250 | Austin, TX  78757
Phone:  512.213.6400 Ext. 102 | Toll Free:  866.238.4230
Email:  masroor.a.adnan@ampf.com

ameripriseadvisors.com/masroor.a.adnan

© 2014 Ameriprise Financial, Inc.  All rights reserved.



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