As a senior at Boston College, the frightening, unknown, intimidating, and (insert any word that means totally foreign slash scary HERE) real world is quickly approaching. Gone will be the days of RA babysitters, Monopoly money, BC bubble life, and Thursday nights when your biggest worry is whether to hit up MA’s or Cityside. Nope, come May we seniors will have to be Real People, with real responsibilities, and a real budget. So how do we live up our last year at BC without financial worries constantly on our minds? To help all BC collegiettes™ become more conscious when it comes to cash and credit cards, we’re starting a new blog series to dole out tips and tricks on how to save money before we go out on our own into the real world (gasp).
To splurge or to save? When you’re sticking to a budget, this should be a question that pops into your head before every purchase. Here are a few things to think about when deciding between the two S’s. After all, these are your hard-earned dollars we’re talking about. You need the right tools to help you become a savvy spender and I’m going to give them to you (free of charge).
Is this an impulse purchase?
There’s an episode in “Sex and the City” when Samantha walks in to see her plastic surgeon for a few routine Botox shots and walks out minus one layer of facial skin. She tries to explain to Carrie that her chemical peal was an “impulse purchase,” to which Carrie furiously replies, “GUM is an impulse purchase!” So ask yourself, are you about to buy something just because it’s shiny, new, and right in front of your face? Take a moment to really think about whether or not you want something. A good rule of thumb is that if you think you’re on the verge of making an impulse purchase, take a breath, step away, wait a while, and if, in a few days, you find yourself still longing for the item, go back and hand over that shiny plastic card. Nothing is worse than shopper’s regret… take a lesson from Samantha and avoid losing your face (and all of your money) on an impulse purchase.
Is there a cheaper version?
One way a lot of us splurge without even knowing it is by unnecessarily buying top-dollar brand name products. At CVS, do you buy Aspirin or CVS brand pain reliever? By law, the Federal Drug Administration requires that CVS brand “aspirin” and the branded aspirin be identical in terms of ingredients, dosage, usage, etc. The same is true for CVS brand face wash and Neutrogena face wash, as well as many more drugstore items. The cost is the only difference between the brand name product and the store brand. Big brand products are always more expensive. You’ll be surprised at how many of your purchases this concept applies to. What about makeup? Do you spend $25 on Dior mascara or do you buy Maybelline for only $8? And do you really love that plain black tank top at Bloomingdales enough to spend $30 on it? Or would you be just as happy with a $15 one from Gap? Before you plunk down your cash, ask yourself if you’re buying the actual item or the label. Can you get the same (or similar) product of equal quality but at a lesser price? You’ll be surprised how often the answer is yes. It may take a little bit of research, but in the long run this practice will help bolster your bank account.
What would mom and dad say?
Sure, we’re physically separated from mom and dad at BC, but chances are most of our parents still have access to our online bank statements. So while they may not see what you do on the weekend, they’ll definitely take note of the five-star restaurants where you swipe your credit card every week. Dave Liepa, a senior at BC, says that he always asks himself what his parents would think if they knew what he was buying and how much he was spending. If the thought of mom’s face after telling her about your splurge makes you cringe, chances are you’re better off saving your money. On the flip side, if dad knows how much you’ve wanted to go on spring break in Mexico for the past four years, he’ll most likely understand your purchase. Who are we kidding…we may be collegiettes™, but deep down we still want our parents’ approval.
Can I use the money for something else?
“Always splurge on clothes!” says the impulsive side of Will Sutton, a senior at BC, when he’s thinking about whether to save or splurge. But Will’s more realistic side tells him that before breaking the bank on a new outfit, he should ask himself what he actually needs. As college students, we are constantly bombarded with opportunities to take out our wallets and dole out cash. Everything from the mundane (school supplies, toiletries, rent) to the more enticing (bars, Red Sox games, trips into Boston) costs something. So make a list of what you’re planning to buy and prioritize. Could the money you’re spending on a new pair of UGG boots go towards this month’s groceries? Try to be logical about your financial needs. If you question yourself each time you’re about to hand over the debit card, you’re more likely to make smarter purchases and save money in the long run.
Is it an experience?
Sometimes an entire experience is way more valuable and enjoyable than any material object. Julie Wojno, a junior at BC, says “I love spending time with people and trying new things. So for me, experiences are way better than things.” If you’re like Julie, an opportunity to sky dive, go on a cruise, or attend a concert may be the time to stop pinching your pennies and let loose. While these experiences may burn a hole in your wallet, they’ll leave you with memories, photos, and laughs that you and your friends will share forever.
Can I make it myself?
Alright, I’m not saying you should try to sew your clothes or cobble your shoes, and I’m certainly not suggesting you build your own version of the latest iPhone, but there are definitely times when you can save money with a
little DIY. Instead of splurging on take-out and restaurant dinners, find some of your favorite recipes online and make an at-home version of your favorite dish. You’ll be surprised how easy it is to replicate everything from penne alla vodka to pad thai to cobb salad in the comfort of your own kitchen. The same rule applies to coffee. While shelling out $4 each day on your Starbucks latte may not seem like much when you’re at the register, $4 a day, five days a week starts adding up pretty quickly. It’s just as easy, delicious, and probably quicker to get your caffeine fix at home by brewing your own Joe. To keep your appetite and wallet full, channel your inner economical chef and check out some tips from Her Campus here.
Will I have this opportunity again?
Chances are your shopping trip to Newbury Street with friends this Saturday won’t be your last. Think of all the opportunities you’ll have in the future to browse the racks at Forever 21, Urban Outfitters, and 344. But a weekend trip to Barcelona while you’re studying abroad in Paris? Now that might be a once in a lifetime occurrence. Michelle Meyer, a senior at BC, says that she doesn’t regret a single Euro she spent during her study abroad last semester. Nights at Parisian techno clubs, trips to Copenhagen and Morocco, delicious baguettes and brie, a cruise to Croatia, a double decker bus tour in London… The list is endless. Sure, it all adds up, but will she ever get the chance to do those things again? Probably not. Especially when traveling or studying abroad, don’t be so stingy that you miss these kinds of opportunities. Your purchases will have sentimental value; they’ll be souvenirs that will always remind you of the places you visited, people you met, and all the craziness that happened along the way.
Is it an investment?
Personally, I think there are two types of investments, or what I like to call “smart purchases.” The first is a “practical” good purchase. For example, if you’re a runner, don’t be afraid to pay top dollar on a good pair of running shoes. As an experienced athlete, you know you’ll be using the shoes nearly every day, so spending the money on high quality shoes will not only increase your performance level, but also may prevent an injury. It might be a splurge, but if you know you’ll be using and benefiting from your purchase on a daily basis, then whip out the plastic and make the good investment. You won’t regret it.
The second type of smart purchase is a “classic item” investment. These are the luxury items that you’ll always have and won’t ever go out of style. You know, like a pair of black patent leather Louboutin pumps, a David Yurman ring, a Chanel bag, a pair of True Religion jeans, a Michael Kors watch… The list goes on and will quicken the heart rate of any fashionista on campus. I’m not saying buy one of these items every time your paycheck hits your bank account, but if you’ve been eyeing a “classic” for a while and have saved enough money to treat yourself, then go for it. Trust me, the feeling of walking out of the store with the classic item you’ve dreamed of and will treasure forever will be worth the money.
So whether it’s a pair of sneakers or stilettos, both “smart purchases” and “classic items” are investments that are sometimes worth the splurge.
Hopefully these tips have given you a new mindset when it comes to splurging versus saving. You might make some not-so-smart purchases every now and again, but use those pangs of shopper’s regret as a chance to learn from your spending slip-up. After all, as long as we’re not yet real people in the real world (or CSOM finance majors) we can still make mistakes… right? Stay tuned for more installments in our latest series of finance blogs!
Photo Sources:
http://www.kaboodle.com/reviews/cvs-clarifying-facial-cleanser-normal-to-oily-skin
http://styleablaze.com/featured/top-10-face-washes-worth-trying/
mynexthandbag.net
http://reigninggifts.com/KitchenAndHouseholdAppliances.htm