Ask Belle: Tips for Shopping on a Budget

Hi Belle!

I’ve been a loyal reader for over a year now – I love your blog! I recently moved from DC to SF (so basically from a really expensive city to a really really expensive city) and I trying to save up for my first big-girl condo. It would be great to see a piece about shopping on a budget, your experience with Ebates, and any other helpful tips you might have for ladies in my same position. Thanks so much!

Mia

Ebates. For those of you who are not familiar with the site, Ebates is a rewards site that pays your between 2% and 26% cash back on your online purchases.  All you do is visit the site, select the store you want to shop (they have all your favorites) and use the link to connect.  If you don’t return your purchase, your cash back is credited to your account and every quarter you receive a payment to your PayPal account.

To maximize your savings, you need to BUY EVERYTHING online.  I buy household goods like dish soap from Drugstore.com (5%), my fashion and news periodicals from Magazines.com (26%), my clothes from every online retailer under the sun and my contacts from Vision Direct (8%).  You can also use Ebates at retailers like Amazon and Gilt, so you can search for the best deals while earning cash back.

The most I’ve made in savings in a quarter is about $300.  In fact, I was saving so much with Ebates, that when I learned there was a service that would put my cash back toward my student loans, I switched to Upromise.  I’ve already put several hundred dollars toward my government loans, and since I can link the account to my grocery store rewards card and my debit card for trips to participating restaurants, it’s the better choice for me.  But if all you’re looking for is cash back, definitely give Ebates a try.

Ebates has the most retailers, and the fact that they offer Amazon and Gilt, keeps me coming back.  And I love when they offer double savings at certain retailers, esp. during the Nordstrom Anniversary sale.  If you’re diligent about shopping for EVERYTHING online, you’ll save a surprising amount of money.

Also, because companies like Teleflora give 15% cash back, you have no reason not to give your Mom or significant other flowers.

Want more advice about how to shop on a budget?  See you after the jump.

Clothing Allowance. If you’re trying to save for a house or just add a few pieces to your closet without breaking the bank, you need to know how much you can afford to spend each month.  I always start by subtracting my essential expenses including contributions to my savings account from my total take home pay.  Then, once I know how much is left over, I go to the ATM and take out the ‘walking around money’ that I need for the month in cash.

Lastly, I set aside a certain amount of money for clothing, tailoring, makeup, waxing and haircuts.  Typically, I set aside 15%.  This money goes into a separate savings account.

When I buy clothes, pay for haircuts or got to the tailor, I pay with my credit card.  Then, every month, I pay off that card.

This method is something I came to over time, and it really works for me.  It helped me rebuild my credit after college and, because I use a rewards card that offers frequent flier miles, I reap a dividend that saves my money on travel.  But most importantly, this method allows me to save up for big purchases like a new bag or a great new coat.  And it keeps my spending in check, because if there isn’t enough money in the account to cover the purchase, I know that in advance and don’t buy the item.

Make Saving a Contest.  When I was on the Hill, I was desperate to curb my spending and stop splurging on things I couldn’t afford.  I didn’t have the best money habits in college, and I needed to learn to do better.  So I created a game where I tried to go for a day without spending money, then two days, then a week, and so on. The longest I ever made it without buying something other than food and Metro was 79 days.

The game gave me a better perspective on what I needed vs. what I wanted.  It also gave me a real confidence boost to keep up with a financially healthy habit, and when the spending break ended, I was always shocked by how much “extra” money I had or how much debt I was able to pay off.

Now, I’ve kept the game alive by doing spending-free weeks.  The third full week of every month is my no spending week.  If I need to save up for a trip or a big purchase, I’ll add a second week.

Shop on Schedule.  A friend of mine adopted a ‘no spending’ calendar to get her budget on track.  Instead of taking off a week, she can only shop on Mondays and can only eat meals out on Wednesdays, Fridays and Sundays.  This way, if she knows she needs to order something or go to the store, she has to do it on Monday.  She says it cuts down on impulse shopping and gives her time to think about what items are really worth the money.  It also allows her to budget over the course of the week for purchases the next Monday.  And since she gets paid on Friday, she doesn’t get sucked into the payday spending sprees that she used to do.

There are a lot of great ideas online about how to make a budget, set aside money for clothing/makeup/hair, and create incentives and goals that work for you.  So do a Google search and get started on your savings plan today.