$10 for a $20 gift card to the bake shop down the street. 75% off massages at your local wellness spa. Half off pub food. $500+ savings on LED TVs. With a click of a mouse, these deals become a reality and for many people this is just too good to turn down. Daily deal sites such as Groupon, Living Social, Woot, HauteLook, Gilt, and Thrillst (to name just a few in a sea of many), offer products and services at deeply discounted prices. The question is whether they will actually save you money.
On the surface, the deals are appealing and seem worthwhile. However, it is important to consider whether you would be purchasing this product, eating at this restaurant, paying for this service, etc. regardless of the deal offer. If you stop at Starbucks everyday on your way to work, $10 for a $20 Starbucks gift card may be worth it since this expense is already factored into your day-to-day budget. On the other hand, if you see a great deal for a massage and this is not something you would typically pay for, the deal may not be worth it. Consider your budget and be sure the deal will actually save you money within your budget. Although it may seem like a great deal, if it is not already in your budget, you will just be spending money, not saving money.
Impulse buying is a result of many of these daily deal sites. We don’t want to miss out on a deal, especially when the deal is only available for a short period of time. This sense of urgency makes it almost impossible to plan for these deals in your budget. Be sure you would be spending the money even if the deal did not exist. Purchasing a $10 deal every now and then can add up to a large chunk of your budget that was not allocated for.
Don’t completely disregard daily deal sites. If you allocate $50 each month toward entertainment and dining out, use daily deals to get the most bang for your buck. They can be a great way to try a new restaurant or activity at a very low cost. National product deals can also save you a lot of money, but only if you are in the market for the product being offered. For example, if you are shopping around for a new TV, why not check out Groupon’s Goods section? Just remember if it’s not already in your budget, it probably will not save you any money.
Do you use daily deal sites? Which ones? What do you buy?