Bank Deal: Earn 1.00% APY on an FDIC-insured savings account at Barclays.
Over the past year or so, “deal-of-the-day” websites such as Groupon, LivingSocial, and a number of smaller competitors have really taken off. While I originally resisted the temptation to sign up for any of these services, I eventually caved in when I saw a 50% off deal at the local running store where I often buy shoes.
In general terms, these sites offer a series of time-limited deals on an ongoing basis. If you provide them with your e-mail address, they’ll send a different offer to you every day. There’s usually a minimum required buy-in before the deal goes live, but as long as enough people sign up for it, you’ll get something like a 50% discount at a restaurant, spa, store, etc.
While these services can be a great money saving tool, they can also be a huge drain on your budget. For example, I recently ran across a “$10 for $20 worth of food” offer for a local restaurant. This is a restaurant that we’ve been to on a couple of occasions and, while it was okay, it was nothing to write home about.
Honestly, I’d probably choose a sandwich on the couch over going back, but… As soon as that offer hit my inbox, I was sorely tempted. After all, they were offering me 50% OFF. That’s $10 worth of “free” food – who can turn that down???
Of course, if you don’t really want/need it, then it’s not a good deal at any price. Nonetheless, my brain was temporarily blinded by that huge percentage off. In the end, cooler heads prevailed and I simply deleted the offer – but I came close to wasting ten bucks on a deal that I didn’t really want.
This isn’t to say that all of the offers are a bad idea. For starters, there was the deal at the running store that I mentioned above. Another winner was “$10 for $20 worth of food” at a restaurant that we do frequent. And yet another was the “$10 for $20 at Barnes & Noble” deal that I used to pick up some books for my son’s birthday.
Other gotchas are that the deals are often time-limited, such that your “$X for $Y” worth of products or services often falls back to being worth just $X if you don’t use it by a certain date. And you also need to be on the lookout for price gouging. For example, FTD and Groupon wound up with egg on their faces when it was revealed that FTD charged Groupon customers higher “regular” prices than non-Groupon customers.
The bottom line for me is that, while there are some great deals to be had, you really need to be disciplined and think twice before pulling the trigger on these sorts of deals. Yes, you can save a ton of money but, if you’re not careful, you’ll end up draining your savings account on a bunch of stuff that you neither want nor need.