Does Online Shopping Change Our Spending Choices?



Note: This is a post from Joan Concilio, Man Vs. Debt community manager. Read more about Joan.

Buy it now. Pay now. NOW NOW NOW NOW NOW.

Sometimes, I feel like the internet is screaming at me like a particularly insistent 2-year-old.

And like most insistent 2-year-olds, sometimes, it feels like the easiest thing to do is to give in to the screaming beast… even if it doesn’t have the best result in the long run.

Yep, I’m talking about online shopping.

Our Instant-Gratification Society

Online shopping seems great. I can have anything in the world sent to my home – no matter how obscure! I don’t even have to pay for shipping, in a ton of cases! The prices are better than they are in retail stores!

These are all true… except there’s a problem.

Our instant-gratification society is taking the “buy it now” hype to an extreme.

We’ve made consuming so easy that we do it without even thinking. You know the stories… people who’ve plunked down hundreds to keep playing their favorite Facebook or mobile games – but have done it 99 cents at a time. People who order 7 pairs of shoes from an online retailer that offers free returns, intending to send back six and keep one but not always following through. People who buy horses and other livestock in online auctions across the country – living things purchased site-unseen.

And again, none of these things are evil, wicked, mean or nasty in and of themselves. But I worry about a culture in which it’s becoming commonplace to drop $700 in a click.

Cash Vs. Debit Vs. Credit

This is actually something we talk about in our You Vs. Debt classes, and it’s one of Baker’s key tips in his list of 24 Quick Actions You Can Do Today That Can Change Your Financial Life Forever:

Spend cash whenever possible.

There are any number of websites that will walk you through the ins and outs of budgeting, of envelope systems, and of the complex psychology of money. But I think we often overlook the simplest reasons this advice is so powerful.

1. Cash is harder to get.

Even a debit card is easy – it’s (generally) in your wallet or purse, on your person. Credit cards tend to be much the same way. To go to the ATM and get cash, even if it’s literally next door, is harder! And, in terms of money, harder to get is a good thing!

2. Cash is harder to part with.

We are a visually driven species. When I see a pile of money, I know that I have X dollars, whatever that may be. When I physically see that money dwindling, I know I have less of it. Big pile of money, little pile of money.

And handing over $700 of my hard-earned cash, in bills, to someone in a store?

YIKES. You can bet that’ll take some thought!

But I could easily drop $700 online for an iPhone… in a click. Almost as an accident. And while I think that I think about my purchases, online or otherwise, the fact is, it is so much easier for me to spend online than it is in person because I don’t have to think very much at all.

Retailers want it this way, of course! They love the idea that you’ll buy now and think later (if ever). Regrets? Well, you could return it. But they’re counting on the fact that most people don’t.

Spending cash takes planning. It takes thought. And thought is a great thing to have where your finances are concerned.


I’m curious what you think: Do you spend differently online than you would in a brick-and-mortar store?

Why do you think so – or why not?

We’d love to hear your comments!

50 thoughts on “Does Online Shopping Change Our Spending Choices?”

  1. Hi Joan,

    You are so right. Spending cash is much harder that using credit. When I decided never again to buy a car on credit it took me 10 years to save for the new car. Once I had that beautiful cash, it took me 2 years to finally commit to a purchase.

    Another thing to consider before clicking “Add to my Cart” is what it will cost you in hours to buy that thing (or cow!). Depending on your tax bracket, you might have to earn $1,000 just to spend $700. If you make $25/hr, it will take you the better part of a week to earn that much. Is it really worth that?

    Great post, as always!

    1. Those are exactly the kinds of things I think of, Ree! How much work do I REALLY have to do for this? (It’s kind of like when I was doing Weight Watchers – how much activity would I have to do to earn that Snickers bar? Is it worth it?!)

      If the answer is yes, then working for it makes it seem even better. If it’s no… then it’s great to realize BEFORE you buy!

  2. Usually, I find online the exact opposite experience. I have time to think about my purchase … time to research for the best price available … and I tend to make better decisions because I can put something in the “cart” and leave it there while I mull it over. In a store, I have been known to purchase something on the fly because I was too much of a hassle to return to the store later … or at the last minute, when I am tired I purchase something unplanned because I just want to go home unstead of rationally thinking about my purchase. I stay on target with my budget the more I shop online. Wish it were economical to shop for groceries online!!!!

    1. Kimberley, that’s a good point. I think that in my case, I’m rarely “out shopping,” so for me, online puts a temptation there that wasn’t there before, but I definitely agree that it can work in the reverse too depending on your mindset!

  3. So true. We have been on a cash-only (and debit) system for three years. We solve the online shopping dilemma by deducting those purchases from our cash envelopes. Though the temptation to overspend is still there, we have to take into account how much money is actually in the envelope when buying something online. It forces us to make choices, just like if we were spending at a brick and mortar store, but we often see the benefit of much lower prices.

    1. Lisa, I admire that so much! I have actually suggested that to a few people, and most have claimed it would be too much work… and I’m kind of thinking, “Yeah, that’s the point!” I am definitely proud of you for being willing to do the work and make good choices!

  4. Kristin Weekley

    I actually disagree completely. I like shopping online for the sole reason that I buy only what I need and go to shop for- when I’m on Amazon or a similar store there is no feeling I have to buy something (I get this feeling in local stores ESP if they are small) if they don’t have what I want. I’m always nervous about a large CC bill at the end of the month so I spend less with credit than I do with cash. Maybe I’m just odd:-)

    1. I don’t think that’s odd, Kristin! In my case, the big caveat that I probably should have mentioned is that I really basically don’t shop. I mean, I do – but I shop literally for stuff I need and pretty much not otherwise. (And never Target. Oh my word, can I do some damage when left unattended in Target…)

      I do know what you mean, though. If you feel pressure from an in-person shopping experience, I can see where it would be harder to do that!

  5. I think there’s an attraction to getting something at a discounted rate which online shopping does well. They mark something 40% off for a period of time, then they’ll raise it up afterward to the original price or higher. Also, on some sites (ebay) you can negotiate a price with the make offer button. I think those are huge draws for folks thinking they can get a “better” rate.

    1. Cheryl, I think that is so true too. I always hate my friends who tell me they “saved” $200 or whatever by buying something on sale that they wouldn’t have bought at all at retail price. I’m like, no, you still spent $X! You didn’t “save” anything!!! LOL.

  6. I love buying stuff online just for the pure convenience of having it shipped right to my door and not having to leave that house. That being said, I don’t believe it changes any of my spending habits. I only buy the things that I was already going to buy and it’s normally cheaper online so it saves me money. I’m sure there are people out there who do spend more because it is so easy and these people need to be aware of what they’re actually buying.

    1. Jake, I think that awareness is key. If you’re aware of what you’re buying and you are “sticking to a list,” just like at a regular store, that’s great. If you’re not… it’s just so easy to impulse-buy!

  7. Hi Joan, thanks for the great post today. There is a lot of truth in your reasons why cash is harder to spend. My online achilles heel is one-click ordering of Kindle books. A lot of times I don’t even finish them. Like the reality of cash that you pointed out, I have started buying paper books again just to get something real that will stay around my apartment as a reminder to finish it. Whether cash or paperbacks, sometimes it’s good to get something physical in your hands to help you take notice.

    1. Ross, that is such a great point. My mother is the queen of Kindle books. Even though many of them are free, I feel like it’s digital clutter and a mental drain on her to have them all around and unread – it’s like you never feel any sense of progress, you know? And then she does buy more at a cost, and they pile up…

      You hit one of the best examples!

  8. We buy some vitamins and other items online that we can’t get in a store. The problem is that I use a special credit card in case of identity theft which has happened before. Because of that, we spend without thinking and sometimes we rack up $1000 and then have to take a couple of months to pay it off or we pull from savings to pay it off. So, we really need to start looking into that.

    One place I order from makes you have a $75 minimum purchase. They are the only place I can get one particular item, so I end up buying more than I need. Luckily this time, I found a friend who also needed items from there, so that helped.

    I love these posts and now that I’m on summer break I have no excuses to really get my ducks in order, so to speak!!!

    1. Lori, I’m cheering for you guys! I think you are so right about those minimums, and the idea of spending without thinking because it’s “separate” money.

      You can definitely get that in order, and your idea of splitting with friends is a good one!

  9. Joan,
    We have become far too used to instant gratification. It’s rooted in our smartphones (which are really tiny computers more than phones, right?). I always think of Louis C.K.’s bit about people’s impatience with their phones to which he replies, “It’s going to space! Will you give it a second to go to space?!”

    Anyway, yes spending cash has a much deeper psychological effect on us than spending online or with the swipe of a card. When I wanted to control my spending out of college, I only spent cash and it cut my discretionary spending quite a bit.

    -Christian L. @ Smart Military Money

    1. Christian, I was telling my husband about that “give it a second to go to space” thing over the weekend. I was like, “SERIOUSLY! SPACE!”

      You have it exactly right. You don’t have to advocate a cash-forever lifestyle, but doing it when you need to get some control is a great strategy.

  10. Yes I do shop online but, not very much or at least I hope not. Granted since I have a kindle it is easier to think about that .99 book deal but, usually that is what my wish list is for. Being a “Prime” member I feel that I spend less because I can usually get that .99 book for free so no money spent. When I do order/get things online it usually will sit in my “cart” for a few days to a week or more to give me time to see if I really still feel as though I need it. Perhaps I shop differently than most folks. No my credit card is never used and yes I use my debit card if I do go ahead and purchase something. This for me is easier than going to the mall (I personally hate going there and avoid it as much as possible.).

    1. I definitely avoid the mall too, Rebecca! I’m lucky that most of what I need, we can get at the grocery store or local stores. For clothes, I have one or two places I go that I can generally get into and out of without trouble, but it’s SO HARD once I’m there to avoid the extra purchases!

      So I think you’ve nailed it – avoid it when you can, and let things sit and think about them, even online!

  11. Seems to me many people in my generation actually have the opposite problem – spending far more freely with cash than with cards.

    For me, and a number of people my age that I’ve talked to, cash is almost like play money. I never keep cash in my wallet, because if I do, it just disappears. I have no idea what I spent it on or where it went. Cash is meant to be spent.

    On the other hand, with my cards, I track my spending and know it’s coming out of my checking account (either immediately or at the end of the month). That’s my hard-earned money going out the door!

    Maybe that feeling is partly because my allowance and any earned money from “extra” tasks growing up was accrued in a check register from which I would subtract purchases. Cash was almost exclusively from relatives for birthdays, etc., so I always spent it on “treats” that I wouldn’t have bought with earned money.

    1. Keith, I’m curious to what your age is! I do think you make a good point – there is a time when “cash” is reserved for “treats,” and in our family I remember that time as well. In our case, we keep a transaction register for everything too, so the ATM withdrawal itself is the hit we feel – and we need and want to make that last as long as possible! I do see what you mean, though, that when each transaction is recorded it is very tangible!

      1. I’m 29, and I think the same way that Keith does. Cash is “fun money” to me. It’s difficult to track how much of it I have or how it gets spent. But any transaction I make using a card is automatically tracked via Mint and other programs so I know in an instant what I’ve spent and where- going back several years! All that data is both informative and fun to play with (ie, how much did I spend at a particular store in the past year? What percentage of my income is going to housing?). I can’t do that kind of automatic, easy tracking with cash.

        Every job I’ve worked from college onward has been paid via direct deposit or other electronic means. So I’m used to thinking that all those numbers on a bank statement represents actual money to me- and that mentality extends to online shopping. Online shopping is shopping, period. Money spent online feels as real to me as physical shopping, and I apply my methodology of determining if it’s something I can afford; price comparison; reading product reviews and so on.

        I wonder if this anti-cash use mindset will extend to younger generations as they and I grew up with online banking.

  12. Joan, I agree that people spend more easily online than using cash at a brick-and-mortar location.

    Buying things online is devious for a simple reason: it’s because the whole process is very abstract. Everything is presented in pictures and numbers that change with a few clicks. Sure, you GET that you’ve spent X dollars, but do you really APPRECIATE the impact of your spending?

    Retailers ultimately want a horde of consumers clicking – and buying – things online with as little thought as possible. Why else would they make the buying process easier and easier (while putting you through hell just to get a refund in most cases)?

    They know people love convenience and hate hassle. And they’ve taken advantage of that psychology very, very well.

  13. Honestly; not necessarily true. I have to plan my online shopping very carefully since I’m usually shipping to a US address and only getting a hold of things every 6, or 18 months. So I’m really cautious! Also – when I do that, I am thinking in and spending dollars!

    When I’m here, with cash; sometimes despite my best efforts I still get confused dealing in baht. Sometimes I have to convert back to dollars to think now, do I really want to spend that? What would that be in dollars? What I want to spend in baht is usually much lower than what I would have accepted, and will accept, in a dollar amount; and the difference in the economies is a factor besides what I take home in salary monthly.

    Bah – I’m going to have to rewire my thinking for yuan soon. Sometimes I think money changing makes me more careful; sometimes, more careless and prone to make mistakes. Online shopping with US retailers is at least; more familiar – so, you have to use judgement but, it’s with a set of measurement you’re more used to!

    1. That’s such a good point, Jenny. I can’t even imagine how I would deal with currency exchanges. I can’t even keep up with this whole “Facebook credits” thing that so many of my friends use for online gaming – 1 dollar is 20 credits or something. TOO MUCH MENTAL MATH! 😉

      Good for you for being willing to do the work in your head to make those decisions!

  14. And here in New Zealand one of the credit card companies Visa has just introduced a ‘swipe your card for purcahses under $80 so instead of keying in pin numbers etc you just wave it across the scanner and done. I’ll try and see if the ad is on Youtube

    1. Telz, that is so classic. Sigh. I think it has been interesting to me that there’s a noticeable change here in the US where you don’t have to sign for smaller purchases (usually under $30). You just get your receipt and go. I do think that has changed in-store habits!

  15. If course now its easier to shop but it doesn’t stop people from spending cash. I think is more the fact that less people actually bother to carry cash. If you take the cards away people will still find away to spend money. Online is quick access, but look at how much Starbucks and other places make even if they said you had to pay with cash people would just make sure they have the cash available. We just want to spend and having the internet makes its easier.

  16. I don’t specifically spend different when it comes to buying items online or offline. I just tend to enjoy online shopping more because there is a wide selection of items that I can choose from and most of the time, it is really cheaper than items in a retail store or department store. It is also very convenient for me because all I got to do is order and wait for it to arrive at my doorstep. Simple as that.

    1. Mark, I think in my case, I need to NOT enjoy my shopping more 🙂 But you’re right – the convenience is certainly nice.

  17. Recently I found myself more of an impulse buyer online than in “offline world”. The choices are bigger and you can read all about the product in the comfort of your home.
    But I also try to stay in what I call “my limit of trust” so no high-end shoppings, max $100-200. And sometimes I think that is also too much 🙁

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  19. I think that shopping online can increase our spending. Just the fact that we’re using a debit or credit card when purchasing online means we’re going to spend more money than if we used cash at a store. You bring up very important points in this article, thanks!

  20. I actually sort of think the opposite on this. I think its easier for me to plop down my hard earned money in the physical store then online. Online I sort of get sidetracked by insane amounts of research over the smallest of purchases because it’s so easy to track down all sorts of reviews and comparisons. This in effect leads to my purchases just sort of getting paralyzed till I’ve researched it to death. If i’m at the store it’s more like, well I’m already here, and I’m not driving back out here to get this small item, so what the heck I’ll buy it.

    1. Didn’t realise but I do this too. So much online research. Though sometimes I’v emade up my mind anyway.

      1. Ah, yes, analysis paralysis. The bane of my existence! I am the same way regardless of location, but I see what you’re saying!

  21. Now that I’m leveraging cash rewards cards for all of our purchases, I have no desire at all to spend with cash. Plus, I still have willpower about spending, so no worries there!

    1. Willpower is definitely great!! I admit that I’m of the same mind as Baker about rewards cards (and that opinion isn’t pretty!), but that’s not to say that I don’t know people who make them work well. It’s just not our personal choice!

  22. What comes into my apartment must have value, so it does not matter where I buy it. If the item adds clutter but not value to my life, the it does not come into the apartment.

    1. And that really is important: VALUE. Not just cost, or ease of purchase. That’s an excellent reminder!

  23. I have gone through periods of overspending somewhat online, but now buy 90% of my clothing, as well as books from Amazon ( prefer Kindle versions when available). I don’t buy anything right away. Instead, I will look at something, check out other sources, and then maybe in a week or a month go ahead if I still want it. Shopping online has made me more careful about purchases in general.

    1. I do think there is one thing I’ve learned to do with online shopping, and that’s be VERY sure before I purchase. I am not someone who likes to have to mess around with return policies! So in that case I do agree, I am more careful with things like clothing online. (Though I admit – I could never buy most clothes online. I NEVER am the same size!)

  24. It’s true that online spending is so easy, and it can be seductive. In general I find I spend less if I make certain purchases by credit card rather than cash – because if I’m planning to buy, say, a pair of shoes, I would take out a bit extra to cover the upper limit of what it might cost. Then I would end up spending the money because it was in my purse. But a credit card can sometimes make it a bit too easy to buy something. LIke other readers here, in some ways online shopping allows me to be more thoughtful…. but I do sometimes get hooked by discount offers, and especially the ones with urgency: buy it NOW before it goes up to it’s “normal” price.

    1. Vivienne, that’s the idea: The tyrrany of the urgent. NOW NOW NOW, right? Not that brick-and-mortar stores don’t do the same thing, but somehow it’s still harder for me in person!

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