With the coronavirus pandemic still looming, many people have had to reassess their budgets and spending habits in the face of uncertain economic times. As uncertainty continues to weigh on their minds, some shoppers have opted to tighten their budgets while others have taken advantage of ‘buy now, pay later’ (BNPL) options.
For those already familiar with budgeting, the challenge now is to trim expenses further and make sure their needs are met while still allowing for some level of savings. Often, this is a difficult task, as fundamental costs such as living expenses, food and utilities are difficult to reduce very far without significantly impacting quality of life.
The National Retail Federation (NRF) reports that Americans overall are stretching their dollars further than ever before, with consumers opting for lower-cost items and better deals. This includes taking advantage of sales, promotions, and discounts in order to reallocate their budgets in the most efficient manner.
Not everyone is satisfied with the idea of cutting back on spending, however. To meet the needs of those consumers, some companies are offering flexible payment options such as “buy now, pay later” (BNPL). BNPL is a payment system that allows consumers to purchase items without making the full payment upfront. Instead, the payments are spread over time, allowing shoppers to pay for more expensive items in smaller installments.
Companies such as Afterpay and Klarna are examples of businesses taking advantage of the BNPL trend. According to their websites, they have both experienced tremendous growth since the introduction of their services. Greater access to BNPL technology has allowed shoppers to purchase items they may not normally be able to afford in one go, without having to worry so much about money in the short-term.
Ultimately, each shopper has to decide which approach is best for them. Depending on their financial situation and needs, some shoppers may prefer to tighten their budgets and increase their savings, while others may opt for the convenience of BNPL. Whichever route taken, hopefully it will lead to a more secure financial future.
