To be truly “financially literate” one must understand how to spend money wisely and save whenever possible. Although the most frugal of people will decry all “wasteful” spending on non-necessities, the vast majority of society enjoys indulging in the occasional “fun purchase” such as new shoes, games, or technological devices. Spoiling oneself is not necessarily a bad thing—as long as the purchase is made at a bargain. Therefore, it is extremely important that individuals fully comprehend the value of sales.
The vast majority of items on the market are actually “marked up,” meaning that they are selling for prices that are quite a bit higher than the actual cost of their production. For example, if a shirt is made using $2 worth of material then stores will likely sell it, at full price, for about $14—a $12 profit per shirt sold. If a consumer waits to buy the shirt at a sale price—let’s say $7—the shirt manufacturer still makes a $5 profit. Thus, if given time, mostly all items will go on sale at some point. In bad economies most businesses will be quicker to put items on sale than in good economies since any purchase—even at a discount—will result in some profit for the business. Hence, sometimes simply waiting for a sale helps you save.
The world of business is filled with contradictions and varying circumstances and this is often reflected in the price of items. For instance, some store chains have special deals with specific companies that enable them to sell that company’s products at a lower cost. A prime example of this is nail polish; certain brands sell at Rite Aid for .99 while CVS charges $1.99 for the exact same item. Although some stores will “price match” (which means that they will sell a customer an item at a discounted price if the customer can prove that another company is selling the same product at the lower cost) most consumers choose to “shop around” to ensure that they get the best deal. Websites like PriceGrabber.com and BizRate.com help consumers compare prices of the same product at numerous retailers.
Coupons are another excellent way to save money on items. Coupons can be found in local papers, in sales catalogues or—increasingly—on websites like RetailMeNot.com, DealCatcher.com and Coupons.com. Coupons can be so lucrative to savings that a television channel called TLC actually airs a reality-TV program titled “Extreme Couponing” which documents exactly how much some people have saved by simply using coupons whenever they go shopping! Best of all, coupons can be found for “necessities” like food, laundry detergents and hygienic products such as shampoo.
It is important to save money and finding good deals is an essential way to be economical. Even young children can be educated about the importance of sales by helping their parents compare prices in stores (or online) and learning the basics facts about percentages (such as the difference between 15% off and 40% off). If parents make an effort to teach children how to be buyer-conscious from a young age then they will instill an excellent sense of responsibility and lessen the chances of acquiring debt in the future. Turning such lessons into a game is a great way to ensure that children absorb these teachings and practice them into adulthood.