Does Groupon help me save or spend?

Not long ago I wrote my first article on frugality and confessed that I was more frugal than I thought.  The internet has made frugality not only trendy but also easier to practice.  The marketing giant Groupon, for example, is one of these sites that helps people save money.  Or does it?

Times I have really saved money

I’ve now bought a few things from Groupon and have been really happy about it.  One of my first purchases was Karma.  My son Robbie wanted to play hockey so I needed to buy him a bunch of expensive equipment that he would grow out of in a year.  Low and behold, All Sports Replay which is a store that sells used hockey equipment had 50% off Groupons.  I cold not have been happier.

Everyday I get and email reminding me of the deal of the day.  Most of the time, I am not interested in the deal of the day and the email goes right into the trash but every now that then there is that perfect groupon that suits me.  One of my happiest purchases was 53% off bread at McGavins.  With 4 hungry boys we go through a lot of bread so this was a no brainer!

Times I spent money

Does Groupon always save me money or does it entice me to spend money I was not intending to spend in the first place?  For example, I got an email with 50% off of items in a local Hobby store.  I’ve always thought it would be fun to have one of these cool remote control cars (not the ones you can buy for $50 at Toys R Us but the ones that the hobby enthusiasts have).  My kids and I have watched some of these cars race in the park and immediately I thought about buying the Groupon to get one of these cars for my boys (OK for me too).

I missed out on the deal because I was travelling and doing a workshop but I think this is an example of where Groupon and other sites like it cause us to be impulsive and spend money we may not spend in the first place.

It reminds me of the cartoon where a spouse comes home after a shopping spree with bags and bags and says “Honey . . . you should see how much money I saved today!”

Are you an impulsive spender?

Gail Vaz Oxalde says According to research, 88% of all impulse purchases are made because the item is on sale.

With Groupon there is a sense of urgency because deals usually expire daily.  Sometimes we are forced to make a decision without really thinking it through.  With items like the used hockey equipment or the bread, it was an easy decision to make either because we use the products anyway and or it was a case of good timing.

Sometimes the fear of missing out on a good deal can cause us to be impulsive and buy something we might not have bought in the first place.  I feel no remorse for missing out on the remote control cars so it might have been one of those impulsive purchases where the car sits in a pile of stuff that either never gets used or gets used once in a while.

Buying cheap

Buying cheap is not frugal if you don’t use it.  I remember buying a booklet of coupons that got me good deals on golfing but I never used the coupons.  That was not frugal nor smart.

Groupon can be like that.  I have a friend that loves trying new restaurants and Groupon is great for this because there’s usually a deal for a restaurant every week.  She has bought more coupons than she can feed herself.  She admits she has to stop buying these deals and start using them.  I am free for lunch next week!

You only save money when you buy things that you were going to buy anyway, but buy it for less.  Obviously you don’t save money when you go out and buy things that you weren’t going to buy – even if it’s priced at 75% off.

Just remember, Groupon is an advertising and marketing company.  There are some good deals but saving requires some discipline.  Spenders be careful!

What are your experiences with Groupon? Care to Share?

Written by Jim Yih

Jim Yih is a Fee Only Advisor, Best Selling Author, and Financial Speaker on wealth, retirement and personal finance. Currently, Jim specializes in putting Financial Education programs into the workplace. For more information you can follow him on Twitter @JimYih or visit his other websites JimYih.com and Clearpoint Benefit Solutions.

10 Responses to Does Groupon help me save or spend?

  1. I’ve only used Groupon once. It was a case of spending, not saving, but I discovered a restaurant I probably never would have tried otherwise and it was a great meal for a good price.

    • Thanks for sharing Melanie. I’ve seen some interesting restaurants too but I have not bought any restaurant groupons yet. I’ve heard you have to watch the fine print regarding taxes, gratuity and alcohol. Did you find that?

  2. I registered for groupon but never bought anything. I wanted to read about others review before buying. Thanks for the post.

  3. Jim,

    I think everyone is getting Groupon overload – every ad you see on Google is for Groupon.

    The deals are not as good as they were when they first launched.

    They should have sold when they had a chance to Google.

  4. I actually wrote a few articles about the dangers of “daily deal sites.” You really have to be careful what you’re buying and what the true cost is at the end of the day.

  5. When I look back, i feel Groupon has indeed resulted in me buying whole lot of stuff which i didnt need and it was only because of good discounts on offer that I ended up buying them.

  6. I never bought anything that Groupon sent me email for. They were some things that I absolutely did not need.

    Americans are big spenders when it comes to discounts. They don’t give a damn whether they need something or not, as long as it’s on sale they would buy them. They are suckers for saving (in this case unnecessarily) especially when they see the sign “On Sale.” They are some of the most gullible and most deceived people ever lived on earth.

    Groupon and other so many are taking advantage of these American qualities. They have lost their thinking power. As long as in their mind, there is a Mr. Jones and Mrs. Jones living in their neighborhood, they will never think on their own. They will always buy what others buy.

  7. If you don’t have the discipline it will help you find new ways to spend your money. It’s only useful if you only buy what you truly need and were going to buy already anyway.

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