Roughly 60% of Americans expect to spend at least $100 on Amazon Prime Day and related “Black Friday in July” sales this year.
Almost 20% anticipate spending more than $300, according to a Bazaarvoice poll of 1,000 U.S. consumers who plan to shop deals this year. And while Amazon is a top shopping destination, especially on July 15 and 16 during Prime Day, consumers also expect to shop other retailers rolling out sales including Walmart, Target, Best Buy and Macy’s.
While the deals may be hot, Mark Hamrick, Bankrate senior economic analyst, says spending big on Prime Day is at odds with the fact that many Americans live paycheck to paycheck and struggle to save. “Prime Day might be great for Amazon shareholders, but not necessarily for consumers as a whole,” Hamrick says.
A recent study from the Federal Reserve found that over a third of U.S. adults would struggle to pay for a $400 unexpected expense — 12% would not be able to cover the expense at all.
Before you make any Prime Day purchases, Hamrick suggests doing a “mini audit” of your finances. Do you have a dedicated savings account that can be used for emergencies? Have you set up regular, automated deposits to this account? What can you comfortably afford to spend?
If you don’t have some savings set aside, put your money toward an emergencies savings account instead of spending on Prime Day and related sales. Experts say having robust savings — the equivalent of three to six months worth of income — can keep you from racking up credit card debt if a big emergency expense, like a car repair, hits.
It also pays to plan in advance when shopping big sales such as Amazon Prime Day. With all of the deals and discounts being offered, it’s the perfect storm for impulse buys. In a recent survey from data protection firm Red Points, 60% of people feel Amazon Prime Day puts pressure on them to buy quickly.
But making a snap decision may mean missing out on a better deal, or worse, buying a product that doesn’t meet your needs. To avoid falling into this trap, compare prices and customer reviews in advance, especially for more expensive items. It’s also essential to pay your credit card balance in full and on time. That sale item isn’t really a good deal if you’re paying interest charges on it.
“Only click ‘add to cart’ or ‘buy now’ if it’s an item that you really need and can afford and otherwise planned to buy,” Hamrick says.