Effects of Affirm Loans on Your Credit Score

  • Raise Credit Score

Maybe you’ve been looking into making a big purchase, but don’t have enough money saved up and don’t want to put it on your credit card. If this situation sounds familiar to you, there is an alternative option. 

An Affirm loan is a quick and easy way to finance large purchases at point-of sale. Offered at over 2,000 companies including Walmart, Wayfair, Casper, and Expedia, Affirm is known for requiring a soft credit check with no hidden fees. 

In the sections below, we will discuss the Affirm loan in greater detail as well as how it will affect your credit. 

What is an Affirm loan?

An Affirm loan is a point-of-sale payment plan that consists of monthly installments for consumers who are new to credit and want to make a large purchase. The company’s “point-of-sale” financing appeals to many new buyers with since there is no minimum credit score required and no prior credit history requirements. 

Affirm uses what is called a soft credit check, a soft credit inquiry that doesn’t affect your credit score, to process their borrowers’ applications for approval. 

Lenders at Affirm will also take a look at the extent of your credit and payment history. The company might even ask for a deposit or want to peer over your bank transactions to get a general idea of your spending habits before offering you a loan.

If you’ve already used a lot of credit and aren’t the sharpest at making payments, there’s a good chance you won’t get approved. 

Pros and cons of Affirm personal loans

If you’re trying to decide if an Affirm loan is the right choice for you, weigh the pros and cons. Here is a quick breakdown:

Pros:

  • You may be able to get 0% APR.
  • No hidden fees such as late fees or prepayment fees. 
  • You can sign up for fixed payments.

Cons:

  • If you return the item, you won’t be able to get a refund on the interest. 
  • You may need to make a down payment.
  • Depending on what your credit looks like, interest rates on an Affirm loan might actually be higher than credit card rates. 

A few other things you should know about Affirm loans:

  • Not a traditional credit review: There’s a good chance that Affirm will still approve you even if you are working on building your credit. This is because Affirm Financing takes into consideration several other factors aside from your credit score when evaluating your application. However, if you are trying to use an Affirm loan to build your credit, keep in mind that Affirm doesn’t report all of their loans, and when they do, they only report to one of the credit bureaus (Experian).
  • Loan terms vary: Usually, Affirm loans can last for three, six, or 12 month periods. The company doesn’t put a cap on how many loans you can have out at one time, but they will check your credit every time that you apply. This means that even if you got approved for an Affirm loan once, there is no guarantee that you will get approved a second or third time. 
  • Loan amounts vary: Affirm offers loans as high as $17, 500, however if the item costs less than $50, you’ll need to have it fully paid off within 30 days of making the purchase. 
  • It’s now available at some physical stores: Affirm originally started out as a monthly payment option for online purchases, but now it’s branched out to some physical retailers as well. 
  • You won’t find Affirm loans in every state: Affirm loans are not available in Iowa or West Virginia. 

How Affirm loans impact your credit score

So, how does an Affirm loan impact your credit score? The simple answer is that it doesn’t. There is no effect on your credit score when you pre-qualify or apply for an Affirm loan. It is important to keep in mind, however, that Affirm will most likely report your loan to Experian, the credit bureau. If you take out multiple Affirm loans, they will each show up individually on your credit report. That being said, the loan could have an effect on your credit score if you’re not making your payments on time.  

How to Apply for an Affirm loan

Once you have decided that an Affirm loan is the best option for you, there are a few different ways you can apply: at the retail store, in the Affirm app, or online. To get started, be prepared to provide the following information:

  • Phone number.
  • Full name.
  • Email address.
  • Birthday.
  • Last four digits of your Social Security Number. 

Once you start the application process, Affirm will send a confirmation number to your mobile device to confirm that it’s you. You will need to add this code to your application. At this point, you may also be asked for additional information or documents such as a photo ID or proof of income. 

Usually, customers who are approved get notified within seconds of the amount, the interest rate, and the loan terms (whether or not the loan is for three months, six, or 12). If you agree to the loan details and are ready to accept, click “Confirm Loan.”

After making your purchase, Affirm will send you monthly alerts to remind you about your payments. Keep in mind, the initial monthly installment will be due 30 days after the date of your processed order.

Before applying, check to see if you’re eligible for the loan through Affirm’s prequalification process. 

Source: pocketyourdollars.com

Fed sounds alarm on commercial real estate, business bankruptcy

The Federal Reserve warned of significant risks of business bankruptcies and steep drops in commercial real estate prices in a report published on Friday.

“Business leverage now stands near historical highs,” the central bank said in its semiannual Monetary Policy Report to Congress. “Insolvency risks at small and medium-sized firms, as well as at some large firms, remain considerable.”

In part encouraged by government and Fed programs, businesses have taken on more debt over the past year as they’ve struggled to deal with the economic and financial fallout from COVID-19, including in some cases forced shutdowns.

Powell testimony

The Fed report, which provides lawmakers with an update on economic and financial developments and monetary policy, was published on the central bank’s website ahead of Chair Jerome Powell’s testimony before the Senate Banking Committee on Tuesday and the House Financial Services panel a day later.

In the report, the Fed voiced hopes of an end to the pandemic later this year, though it cautioned that pitfalls remained.

In particular, it said that commercial real estate prices “appear susceptible to sharp declines” from historically high levels. That could particularly prove to be the case if the level of distressed sales picks up or if the pandemic leads to longer-term declines in demand, it said.

Commercial real estate might be hit by a double-whammy after the pandemic, some economists say. An increase in people working from home could result in less demand for office space, while stepped-up online purchases could force more shutdowns of brick-and-mortar retailers and additional vacancies at shopping centers.

Source: nationalmortgagenews.com

Here’s How to Make Money on Your iPhone

If time is money, then how much cash are we burning with all the time we spend on our phones?

Try not to think about it too hard — that dollar amount is likely higher than iPhone owners can imagine.

Thankfully, it is possible to make that time worthwhile. We’ve compiled a list of the best iPhone apps that will make you money.

1. This App Pays You up to $83 When You Win Solitaire Games

Lots of us already play Solitaire on our phones for fun or just to pass the time. Want to see if you can win money at it?

There’s a free iPhone app called Solitaire Cash that lets you play for real money. You could get paid up to $83 per win.

You might be thinking: There’s got to be a catch. This is definitely one of those spammy apps, right?

Wrong. There really isn’t a catch. Sure, you can pay to play in some higher-stakes tournaments, but there’s no pressure. And, in fact, there aren’t even any annoying ads.

With each game, you’ll battle it out against at least five other players. Everyone gets the same deck, so winning is totally a matter of skill. The top three players who solve the deck fastest can win real money — anywhere from $1 to $83.

Over on the App Store, it has over a million downloads and more than 15,000 ratings, averaging 4.7 stars (out of 5).

To get started, just download the free app and start playing your first game immediately.

2. Spend $1 on This App to Own a Piece of Amazon, Google or Other Companies

Take a look at the Forbes Richest People list, and you’ll notice almost all the billionaires have one thing in common — they own another company.

But if you work for a living and don’t happen to have millions of dollars lying around, that can sound totally out of reach.

But with an app called Stash, it doesn’t have to be. It lets you be a part of something that’s normally exclusive to the richest of the rich — on Stash you can buy pieces of other companies for as little as $1.

That’s right — you can invest in pieces of well-known companies, such as Amazon, Google, Apple and more for as little as $1. The best part? If these companies profit, so can you. Some companies even send you a check every quarter for your share of the profits, called dividends.1

It takes two minutes to sign up, and it’s totally secure. With Stash, all your investments are protected by the Securities Investor Protection Corporation (SIPC) — that’s industry talk for, “Your money’s safe.”2

Plus, when you use the link above, Stash will give you a $5 sign-up bonus once you deposit $5 into your account.*

3. Earn $225 Cash Watching Videos on This App

If we told you you could get free money just for watching videos on your phone, you’d probably laugh. It’s too good to be true, right? But we’re serious.

A website called InboxDollars will pay you to watch short video clips on your phone (or computer). One minute you might watch someone bake brownies and the next you might get the latest updates on Kardashian drama.

All you have to do is choose which videos you want to watch and answer a few quick questions about them afterward. Brands pay InboxDollars to get these videos in front of viewers, and it passes a cut onto you.

InboxDollars won’t make you rich, but it’s possible to get up to $225 per month watching these videos. It’s already paid its users more than $56 million.

It takes about one minute to sign up, and you’ll immediately earn a $5 bonus to get you started.

4. Save Your Digital Receipts to Score Cash Back

It turns out deleting your emails could be costing you serious money. Intrigued?

One of our secret weapons is called Paribus — a tool that gets you money back for your online purchases. It’s free to sign up, and once you do, Paribus will scan your email archives for any receipts.

If it discovers you’ve purchased something from Target, Best Buy or one of 20-plus participating retailers, it will track the item’s price and issue you a refund anytime there’s a price drop. You don’t have to do anything!

Paribus compensates us when you sign up using the links we provide.

1Not all stocks pay out dividends, and there is no guarantee that dividends will be paid each year.

2To note, SIPC coverage does not insure against the potential loss of market value.

For Securities priced over $1,000, purchase of fractional shares starts at $0.05.

*Offer is subject to Promotion Terms and Conditions. To be eligible to participate in this Promotion and receive the bonus, you must successfully open an individual brokerage account in good standing, link a funding account to your Invest account AND deposit $5.00 into your Invest account.

The Penny Hoarder is a Paid Affiliate/partner of Stash. 

Investment advisory services offered by Stash Investments LLC, an SEC registered investment adviser. This material has been distributed for informational and educational purposes only, and is not intended as investment, legal, accounting, or tax advice. Investing involves risk. 

Source: thepennyhoarder.com

These Are the 9 Best Benefits of Amazon Prime

Prime member shopping on Amazon
Flamingo Images / Shutterstock.com

Free shipping with no minimum purchase requirement was once the best-known Amazon Prime perk by far. But the benefits of a Prime membership have evolved to include so much more — from unlimited photo storage to free music, movies and books.

If you’re on the fence about paying for Prime, consider the following benefits. If you are already a Prime member, make sure you’re taking advantage of the following benefits.

We consider them the best Prime has to offer, partly because they are “free.” Unlike a growing number of Prime perks, they won’t cost you anything in addition to your membership fee.

1. Prime Reload

couple earning cash back while shopping online
Prostock-studio / Shutterstock.com

A debit card isn’t the safest way to pay for online purchases, as we explain in “9 Things You Should Never Pay For With a Debit Card.” But if you trust Amazon, you might want to look into Prime Reload.

This Prime benefit gives members a 2% reward for using a designated debit card to reload Amazon gift cards.

The reward generally is added to the gift card balance at the time that you reload the gift card. So, if you add $100 to a gift card, you would get a total of $102.

2. Prime Reading

e-reading
Belish / Shutterstock.com

Read as much as you want, whenever you want with Prime Reading. This feature gives Prime members access to more than 1,000 digital books, magazines and comics to read at no added cost.

You don’t need a Kindle, which is Amazon’s line of e-readers, to take advantage of Prime Reading. You can download Amazon’s free Kindle app to your computer or smartphone as use it as an e-reader, as we detail in “This Trick Lets You Read E-Books Without an E-Reader.”

Just note that Prime Reading is not the same as Kindle Unlimited, a subscription service that gives you access to more than 1 million titles but costs extra. The usual price is $9.99 per month, although a free 30-day trial is available.

3. Free photo and video storage

African American family taking selfie by car.
Monkey Business Images / Shutterstock.com

Your Prime membership gives you access to unlimited, full-resolution online photo storage through Amazon Photos. You also get 5 GB of video storage for free.

Additionally, you can share your unlimited photo storage with up to five people — even if they aren’t Prime members.

4. Prime Wardrobe

Woman looking in the mirror while trying on new clothes
immfocus studio / Shutterstock.com

It’s hard to try on clothes when you’re shopping on the internet, and Amazon knows this. Prime Wardrobe allows Prime members to try on clothing before paying for it.

And it’s not only clothes. You select up to eight pieces — including shoes and accessories — for you and your family. Amazon ships them to you and gives you up to seven days to try on everything.

You only pay for the pieces you decide to keep. You send the rest back in the resealable box you received, using the prepaid shipping label that came in it.

5. Prime Video

Couple watching TV
LightField Studios / Shutterstock.com

Prime Video offers access to thousands of movies and TV shows for your streaming pleasure, all included in your membership. (Nonmembers pay $8.99 a month for this feature.)

Just note that not everything available through Prime Video is included in the price of Prime. Some titles you must rent or buy. You can also buy add-on subscriptions to premium channels like HBO, Showtime, Starz and many others.

6. Amazon Household

Happy retirees at home
Dragana Gordic / Shutterstock.com

If you like the benefits of Amazon Prime, you can share the love. The Amazon Household feature allows you to share certain Prime perks with other members of your household.

You can also share digital content — like e-books, audiobooks, games and apps — so that you don’t have to buy multiple copies for different devices.

7. Prime Music

Woman listening to music
Prostock-studio / Shutterstock.com

With your Amazon Prime membership comes access to more than 2 million songs and thousands of playlists and stations through Prime Music. You get unlimited song skips and the option for offline playback.

Just note that Prime Music is not the same as Amazon Music Unlimited, a subscription service that boasts 70 million songs but costs extra. The usual price is $7.99 a month for Prime members, though a free 30-day trial is available

8. Prime Day

Amazon Prime Day
dennizn / Shutterstock.com

Amazon Prime Day features discounts galore that are only available to Prime members. Think of it like a midyear Black Friday sale.

Despite being postponed until October due to the COVID-19 pandemic, Prime Day 2020 offered more than 1 million deals worldwide. Prime members saved more than $1.4 billion during the two-day event, according to Amazon.

9. Extra savings opportunities

Excited taxpayer using a laptop
fizkes / Shutterstock.com

Beyond Prime Day, Amazon Prime membership gives you access to additional discounts and the chance to access certain discounts before nonmembers. Examples include:

  • Amazon Family: This feature gives Prime members access to additional savings of up to 20% on items such as diapers and baby food, among other exclusive deals.
  • Prime Early Access: This feature gives Prime members access to certain Lightning Deals 30 minutes before nonmembers. Lightning Deals, which can be found on Amazon’s “Today’s Deals” page, are promotions that are available only for a brief time period and in a limited quantity.
  • Whole Foods Market: Prime members have access to additional savings at Whole Foods, which Amazon has owned since 2017. The exclusive discounts include member-only deals — and an extra 10% off sale items.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

Generation Z Spending Habits for 2021 – Lexington Law

generation z girl grocery shopping with her smartphone

The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

Generation Z—the 18 to 24 year old digital natives born who can’t recall a world without smartphones and rapid technology—now make up 20 percent of the U.S. population. Born after 1997, this cohort is making their mark in the economy as they spend an estimated $143 billion per year. The eldest members are in their early 20s, graduating college and entering the workforce for the first time. 

This generation differs greatly from their predecessors in saving, spending and overall money management habits, as well as what they value most in the brands they interact with, the type of jobs they’re after, and their goals for the future. 

Here are a few key characteristics of this generation:

  • Their ability to find answers quickly by accessing information online enables them to make informed decisions and become smart shoppers.
  • Many have called this generation the most financially savvy because of their keenness for saving paired with their thrifty, entrepreneurial spirits.
  • Their sense of independence and self-reliance is partially because of the digital world they grew up in—many received their first mobile device by the age of 10. 

Read on to learn more about Generation Z’s spending habits and their other financial patterns as we enter 2021.

How Generation Z Shops Online and Offline

Generation Z is known as the first digitally native generation and does not differentiate between online and offline channels. Having grown up in a hyperconnected world, they expect the same quality and speed of an online channel to translate to the physical stores they visit. They’re also much savvier with online shopping channels than their predecessors and aren’t easily swayed by gimmicks or celebrity influencers. Take a look at how Gen Z shops.

Online Shopping Habits

Since this generation never knew a world without the internet, they have high expectations for online channels and a low tolerance for any slowdowns or glitches. Members of this cohort place a high value on technology and having the information they need at their fingertips. 

They’re also skeptical about giving away their information since they’ve grown up in an age of high-profile data breaches for major brands. Read through our stats below to learn how Gen Z behaves online:

Gen Z spent over 8 hours a day online in 2020.
  • 26 percent of Gen Z report using social media to make a purchase in 2020. [Source: National Retail Federation]
  • Only 25 percent of Gen Z said they feel in control of their data online in 2020. [Source: Global Web Index]
  • 60 percent of Gen Z would prefer to keep their data over exchanging it for free services in 2020. [Source: Global Web Index]
  • Gen Z reports spending around four and a half hours on their mobile devices per day in 2020. [Source: Global Web Index]
  • Gen Z reports spending a little over three and a half hours per day on their laptops in 2020. [Source: Global Web Index]
  • Gen Z spent over 8 hours a day online in 2020. [Source: Global Web Index]
  • 28 percent of Gen Z consider a simple online checkout experience as a purchase driver in 2020. [Source: Global Web Index]
  • 58 percent of Gen Z report free delivery as a major purchase driver in 2020. [Source: Global Web Index]
  • 43 percent of Gen Z cite coupons and discounts as a major purchase driver in 2020. [Source: Global Web Index]
  • 72 percent of Gen Z reports purchasing an item online in the last month at the time of being surveyed in 2019, whether on a computer or their mobile device. [Source: Global Web Index]
  • 41 percent of Gen Z paid for a purchase using their mobile phone in 2019. [Source: Global Web Index]
  • At the time of being surveyed in 2019, 80 percent of Gen Z said they browsed an online retail store in the last month using a mobile device. [Source: Global Web Index]
  • At the time of being surveyed in 2019, 56 percent of Gen Z said they browsed an online retail store in the last month using a PC or laptop. [Source: Global Web Index]
  • At the time of being surveyed in 2019, 73 percent of Gen Z said they used a mobile device in the last month to search for an item they wanted to buy. [Source: Global Web Index]
  • At the time of being surveyed in 2019, 41 percent of Gen Z said they used a PC or laptop in the last month to search for an item they wanted to buy. [Source: Global Web Index]
  • A poor shopping experience prevented 22 percent of Gen Z from making a purchase online at least three to four times in 2019. [Source: Kearney]
  • 82 percent of Gen Z said that peer reviews were extremely important to them when shopping online in 2019. [Source: Kearney]
  • 77 percent of Gen Z said that personalized recommendations were extremely important to them when shopping online in 2019. [Source: Kearney]
  • 62 percent of Gen Z report being worried about how companies use their personal data in 2019. [Source: Global Web Index]
  • At the time of being surveyed in 2019, 61 percent of Gen Z said they made a purchase online in the last month using a mobile device. [Source: Global Web Index]
  • At the time of being surveyed in 2019, 32 percent of Gen Z said they made a purchase online in the last month using a PC or laptop. [Source: Global Web Index]
  • 46 percent of Gen Z said they had used an ad-blocker in the last month at the time of being surveyed in 2020. [Source: Global Web Index]
  • Only 26 percent of Gen Z said they were comfortable with their apps tracking their activity in 2020. [Source: Global Web Index]
  • 62 percent of Gen Z reported using a private browsing window in the last month at the time of being surveyed in 2019. [Source: Global Web Index]
  • 50 percent of Gen Z reported deleting cookies online in the last month at the time of being surveyed in 2019. [Source: Global Web Index]
  • 33 percent of Gen Z reported using a VPN or Proxy Server in the last month at the time of being surveyed in 2020. [Source: Global Web Index]
  • Of the Gen Z who used an ad-blocker in 2019, 49 percent report doing so because they thought there were too many ads online. [Source: Global Web Index]
  • 23 percent of Gen Z said they blocked ads in 2019 because they were annoying or irrelevant. [Source: Global Web Index]
  • 40 percent of Gen Z reported using another device to shop online while watching TV in 2019. [Source: Global Web Index]

Brick-and-Mortar Shopping Habits

Contrary to what you might think, the majority of Gen Z prefers to make purchases in store. One reason could be that they lack access to credit cards to make online purchases (although they do use debit cards.) We may see this preference change over time.

However, it’s important to note that members of Generation Z are not blinded by technological “bells and whistles” with any shopping channel. Their priorities lie in the basic retail experience: product availability, quality products and efficient service. While they may be swayed as long as any addition enhances the shopping experience, they have a low tolerance for negative or inefficient experiences while they shop. Read on to see what expectations Gen Z has for their brick-and-mortar shopping trips:

  • Contrary to the nickname of “digital nomads” that many have dubbed them with, 81 percent of Gen Z still said they like shopping in-store in 2019. [Source: Kearney]
  • 74 percent of Gen Z cited a “well curated store experience focused on a limited number of products” as either extremely or moderately important to them in 2019. [Source: Kearney]
  • 73 percent of Gen Z said they utilize shopping in-store as a way to discover new products in 2019. [Source: Kearney]
  • 65 percent of Gen Z said they preferred shopping at brick-and-mortar stores in order to trial purchases in 2019. [Source: Kearney]
  • 55 percent of Gen said they planned to do their holiday shopping at brick-and-mortar stores in 2019. [Source: Shopkick via Retail Dive]
  • When asked what they want in a brick-and-mortar store, 83 percent of Gen Z reported having access to things like maps and kiosks was either extremely or moderately important to them in 2019. [Source: Kearney]
  • 79 percent of Gen Z believe that security elements (such as guards) are important in a brick-and-mortar environment. [Source: Kearney]
  • 86 percent of Gen Z said they’re after special promotions, like free samples and giveaways, in the brick-and-mortar stores they visit. [Source: Kearney]
  • A poor shopping experience prevented 24 percent of Gen Z from making a purchase in store at least three to four times in 2019. [Source: Kearney]
  • 8 percent of Gen Z said a poor shopping experience prevented them from making a purchase in store at least five to ten times in 2019. [Source: Kearney]
58% of Gen Z generally agree they use shopping in-store as a way to disconnect from social media.
  • 66 percent of Gen Z said they’d be inclined to shop at physical stores offering technology that enhanced their shopping experience. [Source: Kearney]
  • 72 percent of Gen Z want retail technology that can lessen the time they spend standing in line. [Source: Kearney]
  • 61 percent of Gen Z would like retail technology that streamlines the process of finding the products they’re looking for in stores. [Source: Kearney]
  • 58 percent of Gen Z said they use shopping in-store as a way to disconnect from social media in 2019. [Source: Kearney]

How Gen Z Views Brands

Members of Generation Z expect brands to be transparent, ethical and responsible in all aspects of their business. Neglecting to do so can result in a lost opportunity to collect information or lost business altogether from this generation.

Generation Z cares far more about the value and quality of their purchases than their loyalty to the brand that makes them, so brands need to work extra hard to keep Gen Z’s business around. Take a look at the different brand preferences Gen Z has and what they expect from today’s brands:

  • 72 percent of Gen Z said they’d more readily make a purchase from brands they follow on social media in 2020. [Source: National Retail Federation]
  • 47 percent of the Gen Zers following brands on Instagram in 2020 have purchased something directly through the platform. [Source: National Retail Federation] 
  • 23 percent of Gen Z report following social media accounts or brands they might make a purchase from in 2020. [Source: Global Web Index] 
  • A nod to their proposed lack of brand loyalty, Gen Z is 22 percent more likely to unfollow a brand online. [Source: Global Web Index]
  • 75 percent of Gen Z said they engage with brands on Instagram in 2020. [Source: National Retail Federation]
  • Only 15 percent of Gen Z feel represented in the brand advertisements they see in 2020. [Source: Global Web Index]
  • 56 percent of Gen Z believe brands should be innovative in 2020. [Source: Global Web Index]
  • 38 percent of Gen Z believes brands should be young in 2020. [Source: Global Web Index]
  • 42 percent of Gen Z believe brands should be trendy or cool in 2020. [Source: Global Web Index]
  • 40 percent of Gen Z believe brands should make you feel valued in 2020. [Source: Global Web Index]
  • 35 percent of Gen Z believe brands should offer customized products that are personalized to their needs in 2020. [Source: Global Web Index]
  • 33 percent of Gen Z believe brands should support charities in 2020. [Source: Global Web Index]
Only 15% of Gen Z feel represented in the ads they see.
  • 58 percent of Gen Z prefer their purchases to come in eco-friendly packaging. [Source: Kearney]
  • 60 percent of Gen Z said that endorsements on social media from non-celebrities were extremely important to them when shopping online in 2019. [Source: Kearney]
  • 51 percent of Gen Z said that endorsements on social media from celebrities were extremely important to them when shopping online in 2019. [Source: Kearney]
  • 83 percent of Gen Z said no matter what level of trust they hold for a brand, they still do their research before purchasing from them. [Source: IBM]
  • 57 percent of Gen Z said they want their purchases to be environmentally sustainable in 2019. [Source: Kearney]
  • 50 percent of Gen Z said they’re after locally sourced products in 2019. [Source: Kearney]
  • 79 percent of Gen Z cited health and wellness benefits as important to them when choosing what to buy. [Source: IBM]
  • 71 percent of Gen Z cited natural or organic ingredients as important to them when choosing what to buy. [Source: IBM]

Financial Habits

Despite their young age, Generation Z holds $34 billion in buying power alone in 2020, and influenced household spending to the tune of $600 billion. In addition to their own dollars, they also exercise a lot of influence over their households. Their digital savviness comes into play once again in this area. Their expertise enables them to guide their families through different purchase phases, from initial product evaluation to the final purchase itself.

Members of Gen Z are also financially savvy and keen on earning money, even at their young age. Freedom and flexibility at work are key values of this generation, and the job opportunities they flock to will be those that offer work-life balance and some level of autonomy over their schedule.

  • Gen Z had an average of $115 in spending money each month in 2020. [Source: YPulse]
  • 36 percent of the 2020 workforce was projected to be made up by Gen Z employees. [Source: Financial Executives International]
  • 68 percent of Gen Z used some form of budgeting system in 2020. [Source: Nerd Wallet]
  • 30 percent of Gen Z had credit card debt in 2020. [Source: Nerd Wallet]
  • 87 percent of parents said their Gen Z children had a level of influence over the purchases they made in 2019, whether for the household or for their children. Source: [National Retail Federation]
  • Gen Z kids influenced 48 percent of purchases their parents made for them in 2019. [Source: National Retail Federation]
  • Gen Z kids influenced 36 percent of household purchases made by their parents in 2019. [Source: National Retail Federation]
  • Gen Z reported wanting to work in interactive work environments that provide flexibility and work life balance in 2019. [Source: Workforce Institute]
  • 32 percent of Gen Z said they’re the hardest working generation in 2019. [Source: Workforce Institute]
  • 26 percent of Gen Z said they’d be willing to work longer hours in return for a flexible work schedule in 2019. [Source: Workforce Institute]
  • 31 percent of Gen Z reported feeling hopeful about their future of work in the U.S. in 2019. [Source: Workforce Institute]
  • 57 percent of Gen Z reported expectations of being promoted at least once per year in 2019. [Source: Workforce Institute]
  • 44 percent of Gen Z said they value good healthcare coverage from their employer over paid time off in 2019. [Source: Workforce Institute]
  • Many Gen Z cohorts say they would prefer to do gig work, and 46 percent of them took on some form of gig work in 2019. [Source: Workforce Institute]
  • Only 10 percent of Gen Z solely worked gig jobs in 2019. [Source: Workforce Institute]
  • 18 percent of Gen Z worked part time gig work in 2019. [Source: Workforce Institute]
  • 18 percent of Gen Z took on gig work in addition to another job in 2019. [Source: Workforce Institute]

Gen Z vs. Millennials

Millennials have been center stage for many years, and understandably so—they recently became America’s largest generation, reaching 72.1 million, surpassing the 70 million Baby Boomers living in the U.S. As Millennials begin to age out, however, Generation Z is beginning to capture the world’s attention with their different spending, saving and earning habits. Millennial spending habits differ quite a bit from their Gen Z counterparts. This is partially because Gen Z is very price conscious and focuses on overall value when making buying decisions. We can see these differences when comparing preferences and priorities with different products and services.

  • While 55 percent of Gen Z said they planned to do their holiday shopping at brick-and-mortar stores, 32 percent of Millennials said they planned to do their holiday shopping through their mobile phones. [Source: Shopkick via Retail Dive]
  • 75 percent of millennials are willing to pay more for great customer experiences compared to 69 percent of Gen Z. [Source: Salesforce]
  • While 76 percent of Millennials cited natural or organic ingredients as important in the products they purchase, only 71 percent of Gen Z said the same. [Source: IBM]
  • While 79 percent of Millennials cited sustainability as important in the products they purchase, only 75 percent of Gen Z said the same. [Source: IBM]
75% of millennials are willing to pay more for great customer experiences compared to 69% of Gen Z.
  • While 81 percent of Millennials cited purchasing “clean” products as important to them, only 75 percent of Gen Z said the same. [Source: IBM]
  • While 78 percent of Millennials cited purchasing products that support recycling as important to them, only 72 percent of Gen Z said the same. [Source: IBM]
  • Millennials and Gen Z share similar habits when it comes to data privacy: 31 percent of Millennials and 33 percent of Gen Z said they used a VPN or Proxy Server inthe last month at the time of being surveyed in 2020. [Source: Global Web Index]
  • Similarly, 45 of Millennials and 46 percent of Gen Z said they used an ad-blocker in the last month at the time of being surveyed in 2020. [Source: Global Web Index]

The 67.7 billion members of this generation are a group to watch as they grow up and enter the workforce. Their financial management looks to be off to a strong start thanks to their frugal mindsets and entrepreneurial attitudes. They’ve proven so far that they’re ready to responsibly make and manage their money, and that they have high expectations when it comes to what they spend it on.

 Teens and young adults who are after a financially successful future should not only make plans to keep down debt, but also learn how to build and manage their credit. This includes applying for credit cards, keeping payments down and checking your credit report often to make sure everything is accurate. If you do find any inaccuracies on your credit report like an account you don’t recognize, you can call to learn about how Lexington Law’s credit repair services can help clean up your credit report.

Source: lexingtonlaw.com

Generation Z Spending Habits for 2021

generation z girl grocery shopping with her smartphone

The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

Generation Z—the 18 to 24 year old digital natives born who can’t recall a world without smartphones and rapid technology—now make up 20 percent of the U.S. population. Born after 1997, this cohort is making their mark in the economy as they spend an estimated $143 billion per year. The eldest members are in their early 20s, graduating college and entering the workforce for the first time. 

This generation differs greatly from their predecessors in saving, spending and overall money management habits, as well as what they value most in the brands they interact with, the type of jobs they’re after, and their goals for the future. 

Here are a few key characteristics of this generation:

  • Their ability to find answers quickly by accessing information online enables them to make informed decisions and become smart shoppers.
  • Many have called this generation the most financially savvy because of their keenness for saving paired with their thrifty, entrepreneurial spirits.
  • Their sense of independence and self-reliance is partially because of the digital world they grew up in—many received their first mobile device by the age of 10. 

Read on to learn more about Generation Z’s spending habits and their other financial patterns as we enter 2021.

How Generation Z Shops Online and Offline

Generation Z is known as the first digitally native generation and does not differentiate between online and offline channels. Having grown up in a hyperconnected world, they expect the same quality and speed of an online channel to translate to the physical stores they visit. They’re also much savvier with online shopping channels than their predecessors and aren’t easily swayed by gimmicks or celebrity influencers. Take a look at how Gen Z shops.

Online Shopping Habits

Since this generation never knew a world without the internet, they have high expectations for online channels and a low tolerance for any slowdowns or glitches. Members of this cohort place a high value on technology and having the information they need at their fingertips. 

They’re also skeptical about giving away their information since they’ve grown up in an age of high-profile data breaches for major brands. Read through our stats below to learn how Gen Z behaves online:

Gen Z spent over 8 hours a day online in 2020.
  • 26 percent of Gen Z report using social media to make a purchase in 2020. [Source: National Retail Federation]
  • Only 25 percent of Gen Z said they feel in control of their data online in 2020. [Source: Global Web Index]
  • 60 percent of Gen Z would prefer to keep their data over exchanging it for free services in 2020. [Source: Global Web Index]
  • Gen Z reports spending around four and a half hours on their mobile devices per day in 2020. [Source: Global Web Index]
  • Gen Z reports spending a little over three and a half hours per day on their laptops in 2020. [Source: Global Web Index]
  • Gen Z spent over 8 hours a day online in 2020. [Source: Global Web Index]
  • 28 percent of Gen Z consider a simple online checkout experience as a purchase driver in 2020. [Source: Global Web Index]
  • 58 percent of Gen Z report free delivery as a major purchase driver in 2020. [Source: Global Web Index]
  • 43 percent of Gen Z cite coupons and discounts as a major purchase driver in 2020. [Source: Global Web Index]
  • 72 percent of Gen Z reports purchasing an item online in the last month at the time of being surveyed in 2019, whether on a computer or their mobile device. [Source: Global Web Index]
  • 41 percent of Gen Z paid for a purchase using their mobile phone in 2019. [Source: Global Web Index]
  • At the time of being surveyed in 2019, 80 percent of Gen Z said they browsed an online retail store in the last month using a mobile device. [Source: Global Web Index]
  • At the time of being surveyed in 2019, 56 percent of Gen Z said they browsed an online retail store in the last month using a PC or laptop. [Source: Global Web Index]
  • At the time of being surveyed in 2019, 73 percent of Gen Z said they used a mobile device in the last month to search for an item they wanted to buy. [Source: Global Web Index]
  • At the time of being surveyed in 2019, 41 percent of Gen Z said they used a PC or laptop in the last month to search for an item they wanted to buy. [Source: Global Web Index]
  • A poor shopping experience prevented 22 percent of Gen Z from making a purchase online at least three to four times in 2019. [Source: Kearney]
  • 82 percent of Gen Z said that peer reviews were extremely important to them when shopping online in 2019. [Source: Kearney]
  • 77 percent of Gen Z said that personalized recommendations were extremely important to them when shopping online in 2019. [Source: Kearney]
  • 62 percent of Gen Z report being worried about how companies use their personal data in 2019. [Source: Global Web Index]
  • At the time of being surveyed in 2019, 61 percent of Gen Z said they made a purchase online in the last month using a mobile device. [Source: Global Web Index]
  • At the time of being surveyed in 2019, 32 percent of Gen Z said they made a purchase online in the last month using a PC or laptop. [Source: Global Web Index]
  • 46 percent of Gen Z said they had used an ad-blocker in the last month at the time of being surveyed in 2020. [Source: Global Web Index]
  • Only 26 percent of Gen Z said they were comfortable with their apps tracking their activity in 2020. [Source: Global Web Index]
  • 62 percent of Gen Z reported using a private browsing window in the last month at the time of being surveyed in 2019. [Source: Global Web Index]
  • 50 percent of Gen Z reported deleting cookies online in the last month at the time of being surveyed in 2019. [Source: Global Web Index]
  • 33 percent of Gen Z reported using a VPN or Proxy Server in the last month at the time of being surveyed in 2020. [Source: Global Web Index]
  • Of the Gen Z who used an ad-blocker in 2019, 49 percent report doing so because they thought there were too many ads online. [Source: Global Web Index]
  • 23 percent of Gen Z said they blocked ads in 2019 because they were annoying or irrelevant. [Source: Global Web Index]
  • 40 percent of Gen Z reported using another device to shop online while watching TV in 2019. [Source: Global Web Index]

Brick-and-Mortar Shopping Habits

Contrary to what you might think, the majority of Gen Z prefers to make purchases in store. One reason could be that they lack access to credit cards to make online purchases (although they do use debit cards.) We may see this preference change over time.

However, it’s important to note that members of Generation Z are not blinded by technological “bells and whistles” with any shopping channel. Their priorities lie in the basic retail experience: product availability, quality products and efficient service. While they may be swayed as long as any addition enhances the shopping experience, they have a low tolerance for negative or inefficient experiences while they shop. Read on to see what expectations Gen Z has for their brick-and-mortar shopping trips:

  • Contrary to the nickname of “digital nomads” that many have dubbed them with, 81 percent of Gen Z still said they like shopping in-store in 2019. [Source: Kearney]
  • 74 percent of Gen Z cited a “well curated store experience focused on a limited number of products” as either extremely or moderately important to them in 2019. [Source: Kearney]
  • 73 percent of Gen Z said they utilize shopping in-store as a way to discover new products in 2019. [Source: Kearney]
  • 65 percent of Gen Z said they preferred shopping at brick-and-mortar stores in order to trial purchases in 2019. [Source: Kearney]
  • 55 percent of Gen said they planned to do their holiday shopping at brick-and-mortar stores in 2019. [Source: Shopkick via Retail Dive]
  • When asked what they want in a brick-and-mortar store, 83 percent of Gen Z reported having access to things like maps and kiosks was either extremely or moderately important to them in 2019. [Source: Kearney]
  • 79 percent of Gen Z believe that security elements (such as guards) are important in a brick-and-mortar environment. [Source: Kearney]
  • 86 percent of Gen Z said they’re after special promotions, like free samples and giveaways, in the brick-and-mortar stores they visit. [Source: Kearney]
  • A poor shopping experience prevented 24 percent of Gen Z from making a purchase in store at least three to four times in 2019. [Source: Kearney]
  • 8 percent of Gen Z said a poor shopping experience prevented them from making a purchase in store at least five to ten times in 2019. [Source: Kearney]
58% of Gen Z generally agree they use shopping in-store as a way to disconnect from social media.
  • 66 percent of Gen Z said they’d be inclined to shop at physical stores offering technology that enhanced their shopping experience. [Source: Kearney]
  • 72 percent of Gen Z want retail technology that can lessen the time they spend standing in line. [Source: Kearney]
  • 61 percent of Gen Z would like retail technology that streamlines the process of finding the products they’re looking for in stores. [Source: Kearney]
  • 58 percent of Gen Z said they use shopping in-store as a way to disconnect from social media in 2019. [Source: Kearney]

How Gen Z Views Brands

Members of Generation Z expect brands to be transparent, ethical and responsible in all aspects of their business. Neglecting to do so can result in a lost opportunity to collect information or lost business altogether from this generation.

Generation Z cares far more about the value and quality of their purchases than their loyalty to the brand that makes them, so brands need to work extra hard to keep Gen Z’s business around. Take a look at the different brand preferences Gen Z has and what they expect from today’s brands:

  • 72 percent of Gen Z said they’d more readily make a purchase from brands they follow on social media in 2020. [Source: National Retail Federation]
  • 47 percent of the Gen Zers following brands on Instagram in 2020 have purchased something directly through the platform. [Source: National Retail Federation] 
  • 23 percent of Gen Z report following social media accounts or brands they might make a purchase from in 2020. [Source: Global Web Index] 
  • A nod to their proposed lack of brand loyalty, Gen Z is 22 percent more likely to unfollow a brand online. [Source: Global Web Index]
  • 75 percent of Gen Z said they engage with brands on Instagram in 2020. [Source: National Retail Federation]
  • Only 15 percent of Gen Z feel represented in the brand advertisements they see in 2020. [Source: Global Web Index]
  • 56 percent of Gen Z believe brands should be innovative in 2020. [Source: Global Web Index]
  • 38 percent of Gen Z believes brands should be young in 2020. [Source: Global Web Index]
  • 42 percent of Gen Z believe brands should be trendy or cool in 2020. [Source: Global Web Index]
  • 40 percent of Gen Z believe brands should make you feel valued in 2020. [Source: Global Web Index]
  • 35 percent of Gen Z believe brands should offer customized products that are personalized to their needs in 2020. [Source: Global Web Index]
  • 33 percent of Gen Z believe brands should support charities in 2020. [Source: Global Web Index]
Only 15% of Gen Z feel represented in the ads they see.
  • 58 percent of Gen Z prefer their purchases to come in eco-friendly packaging. [Source: Kearney]
  • 60 percent of Gen Z said that endorsements on social media from non-celebrities were extremely important to them when shopping online in 2019. [Source: Kearney]
  • 51 percent of Gen Z said that endorsements on social media from celebrities were extremely important to them when shopping online in 2019. [Source: Kearney]
  • 83 percent of Gen Z said no matter what level of trust they hold for a brand, they still do their research before purchasing from them. [Source: IBM]
  • 57 percent of Gen Z said they want their purchases to be environmentally sustainable in 2019. [Source: Kearney]
  • 50 percent of Gen Z said they’re after locally sourced products in 2019. [Source: Kearney]
  • 79 percent of Gen Z cited health and wellness benefits as important to them when choosing what to buy. [Source: IBM]
  • 71 percent of Gen Z cited natural or organic ingredients as important to them when choosing what to buy. [Source: IBM]

Financial Habits

Despite their young age, Generation Z holds $34 billion in buying power alone in 2020, and influenced household spending to the tune of $600 billion. In addition to their own dollars, they also exercise a lot of influence over their households. Their digital savviness comes into play once again in this area. Their expertise enables them to guide their families through different purchase phases, from initial product evaluation to the final purchase itself.

Members of Gen Z are also financially savvy and keen on earning money, even at their young age. Freedom and flexibility at work are key values of this generation, and the job opportunities they flock to will be those that offer work-life balance and some level of autonomy over their schedule.

  • Gen Z had an average of $115 in spending money each month in 2020. [Source: YPulse]
  • 36 percent of the 2020 workforce was projected to be made up by Gen Z employees. [Source: Financial Executives International]
  • 68 percent of Gen Z used some form of budgeting system in 2020. [Source: Nerd Wallet]
  • 30 percent of Gen Z had credit card debt in 2020. [Source: Nerd Wallet]
  • 87 percent of parents said their Gen Z children had a level of influence over the purchases they made in 2019, whether for the household or for their children. Source: [National Retail Federation]
  • Gen Z kids influenced 48 percent of purchases their parents made for them in 2019. [Source: National Retail Federation]
  • Gen Z kids influenced 36 percent of household purchases made by their parents in 2019. [Source: National Retail Federation]
  • Gen Z reported wanting to work in interactive work environments that provide flexibility and work life balance in 2019. [Source: Workforce Institute]
  • 32 percent of Gen Z said they’re the hardest working generation in 2019. [Source: Workforce Institute]
  • 26 percent of Gen Z said they’d be willing to work longer hours in return for a flexible work schedule in 2019. [Source: Workforce Institute]
  • 31 percent of Gen Z reported feeling hopeful about their future of work in the U.S. in 2019. [Source: Workforce Institute]
  • 57 percent of Gen Z reported expectations of being promoted at least once per year in 2019. [Source: Workforce Institute]
  • 44 percent of Gen Z said they value good healthcare coverage from their employer over paid time off in 2019. [Source: Workforce Institute]
  • Many Gen Z cohorts say they would prefer to do gig work, and 46 percent of them took on some form of gig work in 2019. [Source: Workforce Institute]
  • Only 10 percent of Gen Z solely worked gig jobs in 2019. [Source: Workforce Institute]
  • 18 percent of Gen Z worked part time gig work in 2019. [Source: Workforce Institute]
  • 18 percent of Gen Z took on gig work in addition to another job in 2019. [Source: Workforce Institute]

Gen Z vs. Millennials

Millennials have been center stage for many years, and understandably so—they recently became America’s largest generation, reaching 72.1 million, surpassing the 70 million Baby Boomers living in the U.S. As Millennials begin to age out, however, Generation Z is beginning to capture the world’s attention with their different spending, saving and earning habits. Millennial spending habits differ quite a bit from their Gen Z counterparts. This is partially because Gen Z is very price conscious and focuses on overall value when making buying decisions. We can see these differences when comparing preferences and priorities with different products and services.

  • While 55 percent of Gen Z said they planned to do their holiday shopping at brick-and-mortar stores, 32 percent of Millennials said they planned to do their holiday shopping through their mobile phones. [Source: Shopkick via Retail Dive]
  • 75 percent of millennials are willing to pay more for great customer experiences compared to 69 percent of Gen Z. [Source: Salesforce]
  • While 76 percent of Millennials cited natural or organic ingredients as important in the products they purchase, only 71 percent of Gen Z said the same. [Source: IBM]
  • While 79 percent of Millennials cited sustainability as important in the products they purchase, only 75 percent of Gen Z said the same. [Source: IBM]
75% of millennials are willing to pay more for great customer experiences compared to 69% of Gen Z.
  • While 81 percent of Millennials cited purchasing “clean” products as important to them, only 75 percent of Gen Z said the same. [Source: IBM]
  • While 78 percent of Millennials cited purchasing products that support recycling as important to them, only 72 percent of Gen Z said the same. [Source: IBM]
  • Millennials and Gen Z share similar habits when it comes to data privacy: 31 percent of Millennials and 33 percent of Gen Z said they used a VPN or Proxy Server inthe last month at the time of being surveyed in 2020. [Source: Global Web Index]
  • Similarly, 45 of Millennials and 46 percent of Gen Z said they used an ad-blocker in the last month at the time of being surveyed in 2020. [Source: Global Web Index]

The 67.7 billion members of this generation are a group to watch as they grow up and enter the workforce. Their financial management looks to be off to a strong start thanks to their frugal mindsets and entrepreneurial attitudes. They’ve proven so far that they’re ready to responsibly make and manage their money, and that they have high expectations when it comes to what they spend it on.

 Teens and young adults who are after a financially successful future should not only make plans to keep down debt, but also learn how to build and manage their credit. This includes applying for credit cards, keeping payments down and checking your credit report often to make sure everything is accurate. If you do find any inaccuracies on your credit report like an account you don’t recognize, you can call to learn about how Lexington Law’s credit repair services can help clean up your credit report.

Source: lexingtonlaw.com

10 States Where Shoppers Love to Get Cash Back

Woman using an app on her phone
Photo by Aruta Images / Shutterstock.com

Residents in three Sun Belt states could teach the rest of us a thing or two about getting cash back from purchases.

Florida, Texas and California shoppers have earned more cash back using the rebate app Ibotta over the past five years than residents in other states, according to a new study from Ibotta itself.

Of course, it’s also true that these three states all have large populations. So, it stands to reason that these places would earn a bit more cash back as a group than states with smaller populations.

But a state’s population size doesn’t completely explain the numbers. For example, North Carolina has a much smaller population than New York, but residents of the Tar Heel State earn more cash back as a group than New Yorkers.

According to Ibotta, the states where shoppers have earned the most cash back using the app over the past five years are:

  1. Florida — $72,666,574
  2. Texas — $70,823,896
  3. California — $58,568,887
  4. Ohio — $43,095,785
  5. Pennsylvania — $39,537,895
  6. North Carolina –$35,268,274
  7. Georgia — $34,659,409
  8. Illinois — $33,749,148
  9. New York — $33,091,948
  10. Michigan — $30,619,987

Ibotta estimates that in most states, about 15% of the adult population uses the app. But the numbers are higher in some places. For example, 18% of Florida adults use Ibotta.

In some states, Ibotta users are particularly active. Here are the three states where each user, on average, has saved the most money:

  1. Maine
  2. New Hampshire
  3. South Dakota

What is Ibotta?

Ibotta is a free app available for Android and Apple devices. To get started using it, simply sign up for an account and download the app.

The rebate app helps you get cash back on in-store and online purchases from all kinds of retailers. As Ibotta’s website put it:

“Ibotta is a free cash back rewards and payments app that gives you real cash for everyday purchases when you shop and pay through the app. Ibotta provides thousands of ways for consumers to earn cash on their purchases by partnering with more than 1,500 brands and retailers. Whether you’re buying groceries, clothing, electronics, or wine and beer, Ibotta will pay you cash for your purchases.”

There are two ways to save with Ibotta:

  • Make purchases from online retailers by going through Ibotta.
  • Use Ibotta’s browser extension for Chrome and Firefox.

Other ways to earn cash back

Ibotta is hardly the only way to get cash back on your purchases.

Cash-back portals like Rakuten make it easy to earn cash rebates on online purchases, especially if you don’t want to download an app or browser extension. While Rakuten offers a mobile app and browser extension, you don’t have to use it. You can go right to Rakuten’s website, log into your account and start shopping from there.

To learn more about cash-back portals, check out “3 Websites That Pay You for Shopping.”

You also can boost your cash back by paying with a cash-back credit card, provided that you are paying off your balance in full each month to avoid interest.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

How to Save Up to $1,465 per Year Shopping Online With Coupon Codes

Although extreme couponing can save you a lot of money at checkout, it’s also a big hassle. You have to amass a large collection of coupon inserts, go through them all to find the paper coupons you want, clip them, sort them, and hold up the line at the register while you present them. For many people, it’s not worth the effort.

But online coupon codes are a different story. Just run a quick search of “coupon codes” plus the name of the site where you’re shopping, and bingo. You get a whole list of codes from coupon sites like RetailMeNot, Coupons.com, and Slickdeals that can shave as much as 50% off your order. Just type in the code of your choice, and watch your savings pop up in your cart.

It’s hard to believe you can save so much money doing something so simple, but you can. According to a 2019 study by CouponFollow, the average American household stands to save as much as $122 per month — $1,465 per year — using online and mobile coupon codes.

And that’s not just CouponFollow pulling dollar amounts out of the air — they crunched the numbers. It really is possible to achieve that kind of savings when you shop.

What the Numbers Mean

To figure out how much shoppers are saving with coupon codes, CouponFollow analyzed data from its browser extension, Cently. It looked at over 435,000 transactions to figure out how often promo codes worked and how much people saved with them.

CouponFollow found that roughly 40% of all purchases made online were successfully matched with a valid coupon code. The shoppers who used these codes saved an average of $30 per purchase, or 17.2% of the total amount they spent.

To translate these numbers into annual savings, CouponFollow compared them with spending data from the 2017 Consumer Expenditure Survey conducted by the Bureau of Labor Statistics. This survey notes how much consumers spend each year in different categories, such as food, household items, apparel, and entertainment. CouponFollow looked at how much coupon code users saved on purchases in each of these categories. They then compared that with the amount spent in each category to figure out how much a typical consumer could save over a whole year.

Based on this comparison, CouponFollow calculated that an average household could save $1,465 per year with coupon codes — 6.4% of its total spending. However, to save this much, the household members would have to buy everything online using promo codes for each purchase.

For most families, that isn’t a realistic way to shop. There are some things it just doesn’t make sense to buy online, such as fresh food. According to a 2018 NPR/Marist poll, a majority of Americans have never shopped online for basic household goods or groceries. And even among people who regularly make online purchases, a majority of shoppers say they prefer in-store shopping.

So clearly, Americans won’t be switching all their shopping to Amazon and other online retailers soon. But the CouponFollow survey illustrates one thing clearly: For the things you do buy online, coupon codes can be a big money-saver.


Coupon Code Savings by Category

Coupon codes don’t save you the same amount on everything you buy across the board. They give you better savings in some categories than others based on several factors.

  • Chances to Save. Just because you find a coupon code doesn’t mean it still works. And some categories have more promo codes available than others. The more usable discount codes there are in a given category, the more chances you have to save.
  • Savings per Purchase. Coupon savings vary both in dollars and as a percentage of your spending. Some promo codes offer only a dollar or two off your purchase, while others can knock off as much as $40 per purchase. However, some small-dollar coupon codes are worth more in terms of percentage. For instance, a coupon for $0.50 off a $5 item saves you 10%, while a coupon for $5 off a $100 item saves you only 5%.
  • Savings per Year. The amount you save in each category over a year depends on how much you spend in that category overall. If groceries make up a much bigger chunk of your budget than hair care, there are more opportunities to save each year on groceries than on shampoo.

The categories that offer the best chance of finding a usable coupon code aren’t always the same categories that give you the most significant savings on each purchase. And the categories with the biggest one-time savings aren’t always the ones that save you the most per year. You have to look at all three factors to figure out where discount codes are the most effective.

Best Chance to Save

According to the CouponFollow survey, the category most likely to have usable coupon codes is tobacco and smoking. Over half of all people who bought cigarettes or other tobacco products online were able to use a promo code for the purchase, saving an average of 14%. Of course, you can save even more money if you quit smoking and avoid the expense altogether.

Other categories for worthwhile savings are alcohol and groceries. Over 45% of shoppers in both categories were able to use coupon codes, saving 18% and 16%, respectively.

Biggest Savings per Purchase

In dollar terms, coupon codes for travel deals offer the biggest savings. The average shopper who used one saved $41.05.

But it’s also hardest to find coupon codes that work in this category. Only 30% of shoppers were able to take advantage of a travel coupon. And since travel is expensive, a $41 savings only represents 8.2% of the total spent. It’s not a trivial amount, but you can probably save more money overall by planning a less expensive vacation.

Other categories that offer good savings in dollar terms are household items, averaging $38.84 per purchase, and alcohol, averaging $37.40. However, since alcohol only makes up a small part of most families’ budgets, this savings only adds up to around $47 per year.

Highest Percentage Saved

If you’re looking at your savings as a percentage of the total rather than a fixed dollar amount, coupon codes for restaurants save you the most. Over 38% of users were able to find promo codes to use on their online food orders, saving $7.49 on average — over 20% of the cost of their meal.

Coupons for personal care and beauty products also take a significant percentage off the purchase price. About 45% of shoppers in this category successfully used coupon codes. They saved an average of $17.98 per purchase, or 19.4% of what they spent. People who bought clothing online also had good luck saving money with discount codes, cutting their bills by an average of $31.89, or 18.8% of the total cost.

Biggest Yearly Savings

Just because you don’t save a high dollar amount or percentage per purchase doesn’t mean you don’t save big overall. For example, in percentage terms, coupon codes for groceries offer only a middling savings of 15.8%. Moreover, only 46% of grocery purchases involve a coupon code, so overall, shoppers can only expect to take 7% off their grocery budget this way.

However, since groceries are something every family buys regularly, this modest percentage can still add up to a sizable chunk of change over a year. CouponFollow calculates that coupon codes could save the average household $316 per year on food prepared at home. That’s a bigger yearly dollar total than any other category. The savings can be taken a step further when using an app like Fetch Rewards or Ibotta.

Other categories that offer big annual savings are household items at $272 per year and eating out at $264 per year. These categories also account for a pretty high percentage of a typical family’s budget, so the savings from coupon codes add up.


How to Maximize Your Savings Using Coupon Codes

Chances are you can’t do all your shopping on the Internet just to take advantage of coupon codes. When you’re out of milk, you probably need to pick up a carton that day, not place an order that will take time to arrive. Besides, for a purchase this small, the amount you’d spend on shipping would probably cancel out the coupon savings.

However, for the things you already buy online, it makes sense to wring as much savings from coupon codes as you can. You just have to know how to target your use of promo codes to maximize your savings.

1. Time Your Purchases

The CouponFollow study revealed that retailers are more likely to offer coupon codes in some months than others. October is the best time of year for online coupons. Shoppers who searched for promo codes during this month had a success rate of better than 41.5%. April and May are both good as well, with success rates of over 41%. By contrast, shoppers who looked for online coupon codes in January, March, August, and September succeeded less than 39% of the time.

When you look at the size of the discounts from coupon codes, the differences are even more significant. Shoppers who used promo codes in November, including online deals for Black Friday, saved more than 19% on average. December and October are also good months to save, with discounts of 18.1% and 17.5%, respectively. February and May are the worst months for coupon code savings, with discounts averaging only 16.5%.

So, if you have a big purchase to make online, it makes sense to wait until October or November. Shopping at this time will maximize your chances of finding a coupon and getting a good discount with it. If that’s too long to wait, at least avoid shopping in August, when both the availability of coupons and the discounts they offer are at a low ebb.

2. Always Check Certain Categories

Always check for coupon codes when buying tobacco, alcohol, or groceries since those categories yield the most usable coupons. And in dollar terms, you’ll score the best deals on dining out, personal care, and apparel.

By contrast, if you’re shopping for books, your potential savings from a coupon code are pretty meager. Only 36.6% of shoppers find a promo code that works, and even those who do find one save only $6.40 on average. It’s still worth doing a quick search for online coupon codes when you’re shopping for reading material since it only takes a few seconds. But if you don’t turn up a deal right away, it’s probably not worth spending more time looking.

3. Use Coupon Apps

The biggest advantage of online couponing is its convenience. Using apps or browser extensions that do the searching for you makes it even easier.

With apps and extensions, there’s no need to open a new browser window, run a search, and figure out which coupon codes apply to your intended purchase. You simply shop through the app or have the extension running in the background. Whenever you shop online, it automatically shows you a list of available coupon codes, so all you have to do is select the best one. This makes it easy to search for deals, even in categories like books and travel where discount codes are scarce.

Of course, even with a browser extension, you still need to take a little time to look through your list of coupon codes and compare the deals. It’s tempting to click the code that offers the highest percentage off your purchase. But sometimes, you can save more in total with a different type of deal, such as a flat dollar amount or free shipping.

Some browser extensions — such as Capital One Shopping and Honey by PayPal — automatically compare all the available deals and apply the best coupon, and you don’t have to do anything at all.

Capital One Shopping compensates us when you get the browser extension using the links provided.

4. Stack Your Savings

Coupon codes aren’t the only way to save money shopping on the Web. Sometimes, online stores run site-wide sales, offering a discount on every single item they sell. In other cases, they offer discounts on specific products that don’t require a promo code. So it’s worth searching for these types of bargains when you shop online rather than just relying on your handy coupon-code app for savings.

If you want to turbo-charge your savings, try “stacking,” or combining your deals. On most sites, you can only use one promo code at a time. But that doesn’t mean you can’t combine online coupon codes with other types of deals. Here’s an example of how this could work when shopping for a sweater:

  1. Find a Sale. You compare prices on several websites. Most charge $30 for the sweater you want, but you find it on sale for $20 on one site.
  2. Use a Coupon Code. Next, you search for coupon codes or let your browser extension do it for you. You find one that gives you an extra 10% off on one item. That reduces the price to $18.
  3. Use a Gift Card. You buy the sweater using a gift card you purchased on a discount site such as Raise.com for 10% off its face value. Although you’re using $18 worth of credit to buy the sweater, the cash price you paid for it is 10% less, or $16.20.
  4. Use Rewards. You purchase through a rewards program, such as Rakuten (formerly Ebates), that gives you 3% cash back on your $18 purchase. That rebate saves you an extra $0.54, reducing your out-of-pocket cost to under $16.

However, deal stacking doesn’t always work smoothly. For instance, some sites have only one spot where you can enter a promotional code — and that includes the number of a gift card. So, if you have both a gift card and a coupon code, you can’t use them both. In cases like this, compare the savings from your two types of deals and use whichever one is a better value.

5. Don’t Pay Extra for a Discount

Some coupon codes give you a deal only if you spend a certain amount on the site. For instance, a code might give you free shipping on any order over $50. If you already plan to buy $50 worth of goods, this is helpful. But if you’re not, you have a dilemma: Is it worth buying something extra just to use the promo code?

If you’re just shy of the limit, the answer could be yes. For instance, if you can save $10 on shipping by adding a $2 item to your cart, even if it’s something you don’t need, you still come out $8 ahead.

However, if what you plan to buy only costs $20, it’s not worth buying an extra $30 worth of stuff to save $10. It’s only justifiable if what you buy is something you needed anyway and the cost on that site — including shipping — is in line with what you usually pay. Otherwise, “spending to save” really isn’t saving at all.


Final Word

Using coupon codes is so easy, there’s no reason not to do it every time you shop online. No, you won’t always be able to find a promo code that works. But looking for one takes only a few seconds — perhaps less if you’re using an app or browser extension. And the savings — especially in categories like alcohol, apparel, and personal care — can be significant.

Chances are you won’t really save $1,465 per year by using coupon codes. But if you can save even 10% of that amount with practically no effort, why wouldn’t you?

Source: moneycrashers.com