2 in 5 Americans Say Online Shopping Has Busted Their Budget: AICPA Survey
- Half of Americans say buying things when they want, without thinking too much about how much they cost, makes them feel good.
- 2 in 5 Americans say they often don’t realize the total amount they have spent on their credit or debit card until they see their monthly statement.
- 5 tips to help Americans use online shopping to their advantage.
Shopping online from the comfort of your home can be easy and convenient, but it also leads to increased spending if you’re not careful. Two in 5 Americans (41 percent) say the ability to shop online has made it harder for them to stick to a monthly budget. And with more than half of Americans saying they have increased their overall online shopping (56 percent) since the start of the pandemic and online retailers regularly hosting annual savings bonanzas— budgets beware. This all according to research conducted by The Harris Poll on behalf of the American Institute of CPAs (AICPA) late in the fourth quarter of 2020.
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“Online shopping is a powerful tool that can either bolster or bust your budget depending on how you approach it”
“Online shopping is a powerful tool that can either bolster or bust your budget depending on how you approach it,” said Gregory J. Anton, CPA, CGMA, chairman of the AICPA’s National CPA Financial Literacy Commission. “If you take the time to shop online strategically, you should be able to compare and save, which gives you the opportunity to allocate money towards other financial goals.”
Poor Online Shopping Habits Potentially Busting Budgets
The survey also found that half of Americans (52 percent) say buying things when they want, without thinking too much about how much they cost, makes them feel good. An activity sometime referred to as ‘retail therapy.’ And concerningly, 2 in 5 Americans (39 percent) say they often don’t realize the total amount they have spent on their credit or debit card until they see their monthly statement.
“When spending is driven by emotions of want rather than need, it can get out of hand. Left unchecked, it can lead to serious financial drain,” added Anton.
Tips to Help Americans Keep Their Online Shopping from Busting Their Budget
1. Shop with a plan
“Merchants have powerful strategies to encourage you to spend. So, level the playing field by entering the retail arena with a plan of your own for what you need and can afford. Determine what you plan to purchase and how much you’ll spend before you start shopping. If you have a plan, you’ll be less likely to give into overspending.” -Neal Stern, CPA, member of the AICPA Financial Literacy Commission
2. Take Time to Run the Numbers
“Before making any big purchase, remember to run all the numbers. Make sure you understand the return policy, delivery costs, and any fees/taxes associated with the purchase. Take the time to compare the total purchase cost with other retailers to see if the same item is available for a better deal elsewhere. A few minutes of research can go a long way to help you save money and bring you closer to your financial goals.” -Darryl Nitta, CPA, member of the AICPA Financial Literacy Commission
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3. Try a cooling off period
“In order to avoid making impulse purchases, it’s prudent to take a step back and assess whether it’s an actual ‘need’ or more of a ‘want.’ Try putting an unplanned purchase in your ‘cart’ online or implementing a ‘cooling off’ period where you allow a certain amount of time to elapse before clicking ‘buy’. This will allow the initial adrenaline burst to subside and for you to make a level-headed decision.” -Michael Landsberg, CPA/PFS, member of the AICPA Financial Literacy Commission
4. Don’t shop out of boredom
“If you find yourself browsing through your favorite online shopping sites just to pass time or for entertainment, you are likely to spend money on superfluous things that you may not be able to afford. Instead, consider earmarking distinct hours specifically for online shopping and use only that time to shop for the specific items in your budget.” -Kim Hardy, CPA, member of the AICPA Financial Literacy Commission
5. Utilize technology wisely
“Technology can be a powerful saving tool when used to help you find the best deals. However, be aware that your personal electronics also make you a constant target for email marketing and targeted ads which can inundate you with the feeling that you need to buy something you really don’t need.” -Tami Bolder, CPA, member of the AICPA Financial Literacy Commission
