Does a tax holiday really equal savings?

Now that the weekend is over and I’m safely distanced from North Carolina’s “tax holiday,” I can put my thoughts into perspective.

The first weekend in August every year, North Carolina suspends its sales tax on school-related items including computers, clothing, and school supplies.

This week marks our first anniversary as North Carolina residents. We weren’t here yet during last year’s tax holiday, and I was bummed that we missed it by a few days. But this year I was determined to stay away from the stores to avoid the urge to spend.

It’s easy to give in to the urge to spend when the marketing machine convinces you that you MUST. (I know, I work in marketing.) But it’s important to remember the old adage: you’re not really saving money if you don’t really need it.

It was still hard for me to stay home and avoid buying new clothes that I don’t need, even after all of the progress I’ve made this year. The little voice in my head was saying, “It’s tax-free! That’s 6.75% off! What a great deal!”

Then I reminded myself that I seldom pay full price, especially for clothes. I often only shop when I have coupons for 10% or 20% off. Even then I usually shop the clearance racks and extreme sale prices. I also know that stores were unlikely to have great sale prices because they’d be counting on the tax holiday to drive sales, so I ultimately wouldn’t have saved that much anyway.

So why did I have to fight the urge to rush out and spend just to get a lousy 6.75% discount when I know it’s not going to save me money anyway? The answer is simple: if it’s sold at a discount, no matter how impractical or minute the discount may be, we’re more likely to believe it’s worth buying.

There’s a reason why my neighbors rushed out to the stores this week. It’s the same reason stores slash prices every year the day after Thanksgiving. When it comes to shopping, our culture has created a mob mentality that’s obsessed with savings. It’s dangerous because in a mob we seldom stop to consider the practicality of our actions. When you’re blinded by sales tags, it’s hard to stop and ask yourself, “Do I really need this? Really?”

I can’t tell you how many times I’ve bought an item from the clearance rack because of the low price only to bring it home and never wear it. I’d rather allocate my money to fewer items that I know I’ll use instead of a closet full of sale items that I never wear.

Even if I did need new clothes right now, I would prefer to wait until my head is clear. If I had headed into the stores this weekend drunk on the idea of a tax holiday surrounded by other shoppers who feel the urgent need to BUY NOW BEFORE THE SALES TAX IS REINSTATED, I probably would have gotten caught up in the savings euphoria and spent more than I should. At that point, instead of saving 6.75%, I’d be spending twice what I’d planned on things I didn’t really need or even want.

4 thoughts on “Does a tax holiday really equal savings?

  1. Kacie

    Excellent points!

    In Pennsylvania, there is never a sales tax on clothing (except for luxury items such as prom dresses, etc.).

    My mom and sister are in town visiting me, and when Mom told me my sister needed some new jeans for school, I suggested we go shopping here to take advantage of the tax-free status.

    It worked out since she needed back-to-school clothes anyway, but I can totally see how people could get carried away with a tax-free sale.

  2. KS

    I definitely agree that if there’s an item you need, you should take advantage of a tax-free sale! Every little bit of savings helps if you were going to buy the item anyway!

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