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GOBankingRates’ editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services – our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines<\/a> and our products and services review methodology<\/a>.<\/p>\n 20 Years Trusted by Spaving \u2014 the act of spending money to save money \u2014 might seem beneficial to your wallet, but according to experts, the strategy can set you back in retirement.\u00a0<\/p>\n \u201cThe reality is you\u2019re spending more money and diminishing long-term savings,\u201d explained Geri Hopkins, chief operations officer at Skyla Federal Credit Union<\/a>. \u201cThe money spent on these so-called deals could be more effectively invested in a high-yield savings account.\u201d<\/p>\n Spaving usually isn\u2019t a one-time event, so if it becomes a regular habit, people could miss out on thousands of dollars for retirement<\/a>. Here\u2019s everything you need to know about spaving and why it could cost you big time<\/a>.<\/p>\n What Is Spaving<\/p>\n Spaving is chasing deals that look like bargains but, in the long run, aren\u2019t.<\/p>\n<\/p>\n \u201cWhen you spave, you are trying to spend a little more than you planned in order to qualify for some type of promotion like saving an extra 5%, free shipping or to get a buy one get one free deal,\u201d said Eric Mangold, certified wealth strategist (CWS) and founder of Argosy Wealth Management<\/a>.<\/p>\n Before shelling out any money<\/a>, do the math to ensure you are actually saving instead of falling into a financial trap.<\/p>\n Why Spaving Feels Smart in the Moment<\/p>\n It feels good to get a so-called deal and save money<\/a>, but with spaving it\u2019s often an illusion-you aren\u2019t saving.<\/p>\n \u201cRetailers buy more, save more marketing approach seemingly gives shoppers a dopamine hit, making the purchase feel rewarding or like a smart financial move,\u201d Hopkins said.<\/p>\n However, instead of helping consumers save, it\u2019s actually causing them to spend more, which means less money for long-term goals like retirement.<\/p>\n \u201cYou don\u2019t pause long enough to think, I should be saving this money for my retirement<\/a> or even for the mortgage<\/a>,\u201d said Mary Clements Evans<\/a>, author of \u201cEmotionally Invested: Outsmart Your Anxiety for Fearless Retirement Planning,\u201d founder and president of Evans Wealth Strategies.<\/p>\n How Spaving Can Destroy Your Financial Future<\/p>\n Hunting for discounts is a smart way to save money, but only if it\u2019s the right deals.<\/p>\n \u201cEvery dollar you spend chasing discounts is a dollar that could\u2019ve been invested and compounding growth,\u201d said Danny Ray, founder of PinnacleQuote<\/a>, a life insurance company.<\/p>\n He explained that if you\u2019re spending an extra $100 a month \u201cto save\u201d that could cost you over $150,000 in lost growth over 30 years if invested at a modest 7% return.<\/p>\n \u201cOver time, those buy-one-get-one deals or free shipping thresholds quietly chip away at your long-term goals, especially retirement savings,\u201d Ray added.<\/p>\n \u201c[Spaving] gets the brain to change the decision to purchase away from the thought that they\u2019re being bad by spending into the thought that they\u2019re being smart because they\u2019re saving,\u201d Evans explained.<\/p>\n It\u2019s a retail trick that works.<\/p>\n How Much Spaving Could Impact Retirement<\/p>\n![\"\"](\"https:\/\/cdn.gobankingrates.com\/wp-content\/uploads\/2023\/11\/icon-20.svg?webp=1&quality=75\"){kind=icon}
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