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11 Ways Brexit Has Affected Online Shopping

11 Ways Brexit Has Affected Online Shopping

Uncertainty.

There is only one certain thing that has come from the Leave vote — it’s certainly uncertain what will happen next.

But just minutes after the Brexit vote, we did see changes. And almost all of those charges are great for online shoppers — especially those who are looking for terrific deals.

1. Your Pounds Buy Less Outside Britain

Immediately after the news broke that the Leave vote had won, the British pound fell dramatically in value. This means the pound isn’t as valuable as it previously was compared to other currencies.

Therefore, if you’re looking for great deals, don’t look outside of Great Britain. Your money will buy you less when you spend it in other countries, at least for right now. But there’s good news about the pound.

2. Bargains Abound

If you shop in the UK, those same pounds that have been devalued will buy you quite a bit more than you might expect. It’s not just the money in your bank account that has lost a bit of value. Prices have had the same reaction to the dropping pound.

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This means stores, especially faced with the uncertainty of Brexit, have adjusted some of their prices to account for the falling currency value. This is true of some brick and mortar stores, but even truer of online purchases. Online retailers can adjust to a currency downturn immediately, and they have.

Many of the best bargains are on UK websites you might not have shopped on previously because of high tariffs and taxes. Those tariffs and taxes don’t bite quite as much now and prices are falling.

3. Your Foreign Currency Buys More

If you’re living outside of the UK and working in a different currency than the pound, you’re in the best position of all. The pound has fallen against the dollar and other currencies, so shopping in dollars saves you even more.

This is, again, especially true for online shopping, as they have had the most dramatic price fluctuations as the pound has fallen. Seek out the British Amazon, for example, to find great deals on items priced in pounds.

Granted, there are often high tariff and shipping fees for online purchases, so be sure to include those costs into items you’re purchasing. Even with those tariffs, you’re still likely to come out ahead. But you can save even more if you’re outside of the UK by using a shipping company to buy up items and ship them for less.

4. Cheap Prices Are Short-Lived

Immediately after the Leave vote, the pound fell dramatically. It has continued falling for a bit, but is now showing signs of stabilizing as some of the uncertainly passes. There will be additional shocks to the currency system as the UK actually splits from the EU. This will be a rather drawn-out process, and it’s very likely that the currency will stabilize and begin to rise again.

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For savvy shoppers, this means that the online deals are great right now, but they may not stay that way in the long term. The longer the pound stays devalued, the longer the low prices stick around. But once the pound begins rising again, prices can be expected to go right up again, too.

5. Electronic Prices Will Rise

Not every item will drop in price during the Brexit uncertainty period. Electronics may actually become more expensive. Very few electronics are made in Britain, so companies outside of the UK must make some adjustments in their pricing in the UK to account for the fallen pound.

HP has recently raised prices in the UK 10 percent across the board to compensate for the weaker pound. Dell has made a similar move, raising prices to be sure the cost of manufacture and import are covered in the retail price. The best bargains here are not going to appear until the pound strengthens against foreign currencies again.

6. Digital Products Are The Best Buys

Of all of the online shopping deals to be had, the best are the digital products sold on UK websites. Selling physical items on websites still requires some form of inventory or controlled costs for moving tangible products.

Digital products, on the other hand, are not tied to shipping or holding costs. That means there are constant fluctuations in prices of music, digital books, software, game, and apps. Lately, the items that are sold in pounds have fallen, leaving plenty of bargains to be found on the UK versions of Amazon and Steam.

7. No Risk of Import Issues with Digital Purchases

Every physical purchase made online may be subjected to import taxes and duties. It’s a cost you have to factor into the online sales of actual items, but it’s completely non-applicable to digital products that are purchased in the UK.

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Immediately after the pound began falling, gamers and savvy online consumers switched their home counties to the UK on their App Store and websites like Steam. Terrific bargains have been found in digital products priced in pounds, and there is no risk of duties since the digital products are purchased and downloaded, not purchased and shipped.

8. Import Taxes Could Rise

Many of the best bargains for those living in the UK are going to be short-lived. As the UK moves forward in separating themselves from the EU, they can expect two things: inflation if the pound remains down and higher import taxes from the EU.

One benefit of being part of the EU was the elimination of import taxes between EU countries. With the UK no longer part of that legal entity, there will no longer be an EU trade agreement. It’s logical to assume that import taxes will return on items that are manufactured outside of the UK and shipped in. This will include everything from candy bars to electronics.

9. UK Shoppers May Pay More Down the Road

Import taxes aside, as the value of currency falls, deals are to be found immediately in the uncertainty. But prices won’t stay depressed for the long term. The devaluation of currency will eventually lead to a round of inflation where pounds go shorter distances in buying popular and everyday items.

For the savvy shopper, it makes sense to buy items now while prices are low rather than wait for better deals down the road. It’s very likely that those better deals simply won’t be forthcoming — at least not for a while. On the other hand, those shopping in the UK with stronger currencies other than the pound will be able to buy more now and potentially into the future as well.

10. Online Clothing Will Drop in Price

Leaving the EU may raise the price of some goods that are subject to import taxes and tariffs, but other items may fall a bit in price. A report in 2013 by the House of Commons library found that EU membership appears to increase the price of consumer items like clothing.

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It follows that being out of the European Union will lead to a drop in clothing prices as the UK will no longer be subject to the same requirements as other countries. This price drop will be seen first online as internet prices tend to be more responsive to sudden changes than brick and mortar stores with more fixed costs.

11. Powerful Vacuums Are an Option Again

In one rather amusing example, Brexit will actually free up some purchases for UK shoppers. As members of the EU, Britain was required to follow requirements of that entity. In 2014, the EU banned “powerful vacuums” over 1600 watts in a bid for the environment.

The restrictions are scheduled to tighten up in 2017 when vacuums over 900 watts are forbidden in the EU. Fortunately, if you’ve been in the UK dying for a Dyson or Miele, your time has come. There’s soon to be no rule blocking the most powerful vacuums for UK residents.

Likewise, if you smoke menthol cigarettes, you’ve dodged a bullet as well — those are to be banned by the EU in 2022.

While there is certainly uncertainty about the future of the EU and Britain, in the meantime there are bargains to be had! Prices may shift as currency valuations change and Britain formally splits from the European Union, but for now, at least, consumers are coming out ahead.

Featured photo credit: Unsplash via hd.unsplash.com

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Last Updated on July 10, 2020

The Definitive Guide to Get out of Debt Fast (and Forever)

The Definitive Guide to Get out of Debt Fast (and Forever)

Debt can feel crushing, like a weight that is always weighing you down. Looking at those numbers, it can feel as if you’ll never get out from under it. However, if you really want to learn how to get out of debt, it is possible with a great deal of focus and self-control.

Getting out of debt isn’t impossible. Like any big goal, all that it takes is an action plan to identify where you are and creating a plan to zero out your debt.

Identifying All of Your Debts

The first part of paying off your debt is getting a complete picture of what you owe. When you have everything written out in front of you, it makes it much easier to create an action plan. Depending on how much you owe, it might also help you realize it’s not as bad you might have originally thought.

Here’s how you can get started identifying your debts:

1. Own Your Debt

Before you start identifying all of your debts, take a moment to process that you have debt but want to get out of it.

Forgive yourself for any past mistakes, missed payments, or overspending. It might be painful to accept how much debt you have at first, but you must own it.

2. Make a Debt Tracker

It’s astonishing how few people ever created a tracker to understand their total debts. Most likely, it comes from not wanting to accept the guilt of having debt, but, if avoided, it can make it nearly impossible to get out of debt.

Open up a new Google or Microsoft Excel sheet and list out all of your debts. Start with the name of the creditor, interest rates, total balance, loan term length (if any), and the minimum amount due each payment. This will include student loans, credit cards, and any other type of debt owed.

3. Get Your Debt Number

Once you’ve made your debt tracker and taken the other steps, identify your total payoff number. This is crucial, as you will have a starting point and a clear goal that you are trying to achieve.

Prioritizing Your Debts

All debt is not created equal. It’s imperative to understand that there are different types of debt.

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1. Understand Bad and Good Debts

Bad debts are usually paying for things you want instead of always need. While there might be some emergencies that max out your credit cards, often times it’s excessive spending[1].

There are three main types of bad debt:

  • Credit Card Debt: The average American household owes over $16,000 in credit card debt!
  • Auto Loan Debt: According to CNBC , the average auto loan in the US is $30,032!
  • Consumer Loan Debt: Consumer loan debt isn’t as common as credit card and auto loan debt, but it’s still considered bad as interest rates are usually between 10-28%.

Good debt is identified as investments in your future. Here are three common types of good debt:

  • Student Loan Debt
  • Mortgage Loan
  • Business Loans

2. Decide Which Debt to Pay off First

Once you know each type of debt and their interest rates, you can begin to pay off debt quickly.

Focus on paying off bad debt first, regardless of if it is a credit card or auto loan. Start by paying off the loan with the highest interest rate first.

If you have several credit cards with different interest rates, you want to focus on the one with a higher APR. You will actually save more money by eliminating the card with the highest interest rate.

3. Don’t Pay the Minimum Amount

Paying the minimum amount digs you into a hole as interest rates will offset your payment. Even a small amount more than the minimum can help you pay off debt much faster.

Removing Obstacles to Pay off Debt Quickly

Creating a debt tracker and prioritizing a plan is simple, but avoiding temptation can be difficult.

1. Set a Reminder to Track Your Debt

“If you can’t measure it you can’t manage it.” -Peter Drucker

It’s so important to track your debt to ensure that you get it paid off quickly. Similar to working out and measuring your results, you need to track your debt constantly. Start with a weekly reminder, where you sign on and log your updated number. Did you increase, decrease, or stay the same?

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Regularly tracking your student loan balance can be incredibly motivating, as well. You will get a huge confidence boost each time you see your total debt amount decreases.

Set weekly and monthly goals so you can have short term wins and keep the momentum going.

2. Hide Your Credit Cards

If your biggest debt is credit cards, you need to eliminate temptation and remove them from your wallet.

Some people have gone to extreme measures by freezing their credit cards. Why? This would create an ice block around your card, which would require you to chip away at it slowly. This will give you time to think if it’s the best idea to buy that thing you’re about to buy.

3. Automate Everything

Willpower can be a huge downfall to paying off your debt. By automating your bills each month, you will ensure that willpower isn’t involved.

4. Plan Ahead

Getting out of debt will require some sacrifices, but with enough planning, you can make it work.

For example, if you know that you have a friend’s birthday or family dinner coming up, plan ahead for the costs. Whether you need to cut back on spending the week before, pick up a side job, or meet them after dinner, do what is needed.

5. Live Cheaply

The only way to get out of debt is to make some sacrifices on your spending habits. Find ways to save money each month so you can apply that amount to your outstanding debts. Here are some ways to save money each month:

  • Live with roommates
  • Cook dinners and prepare lunches for work instead of eating out
  • Cut cable and choose Netflix or Amazon Prime
  • Take public transit or bike to work

Finding the Lowest Interest Rates

The higher your interest rates, the harder (and longer) it will take you to pay off any debt.

If possible, you want to find ways to lower your interest rates to help get out of debt quickly. Here’s how you can get started:

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1. Maintain a High Credit Score

Your credit score will have a large impact on your ability to refinance your loans and receive a lower interest rate. If you have a low credit score, it’s unlikely you will be able to refinance your loans. Use these credit tips to increase and maintain an excellent score:

  • Never miss a payment
  • Don’t exceed 30% of your credit limit
  • Don’t sign up for more than one card at once
  • Limit hard inquires, like auto-loans and new credit cards
  • Monitor frequently with free credit-tracking software

2. Find Balance Transfer Offers

Start by opening a free account on credit.com. Credit.com offers you the chance to open a free account and see what type of balance transfer offers you can receive. Some of your existing credit cards might already have 0% or lower APR balance transfer offers available.

Contact each of your credit card providers to ask about lowering your rate for a one-time balance transfer offer[2].

If you do take advantage of this option, make sure that you use a balance transfer and not a cash advance. Cash advances have a ton of high interest fees (15-25%, depending on your credit card) and will only compound your debt problem.

How to Get Rid of Debt Forever

Setting up a plan, removing temptations, and getting the lowest interest rates is the first step to get out of debt.

1. Keep Monitoring and Adjusting

Once you have a plan, don’t get comfortable. Track your debt payoff plan and make the necessary adjustments when needed.

Monitor your credit scores with a free site like CreditKarma. The higher your credit score climbs, the more likely you will be to secure a new, lower-interest loan.

2. Earn More Money

There are only so many ways to save money. Instead of clipping another coupon or making sacrifices for your morning coffee, find ways to earn more money!

Think about it…it is much easier to find ways to earn an extra $1,000 per month than find $1,000 to cut from your budget.

Here are some examples of ways to earn more money:

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Talk to Your Boss

Have a conversation with your boss about current salary and/or commission rates. If you’re not satisfied or want a change, don’t be afraid to look around at other positions. Some of them might even have a student loan debt reimbursement plan!

Start a Side Hustle

This could be coaching students on the weekends, driving for Uber, or taking paid online surveys. There are tons of ways to make money outside your 9-5. Now that you have a clear plan to pay off your debts, you’ll be more motivated than ever to figure out creative new ways to earn money.

Build an Online Business

There are so many websites and blogs that earn money from ads, affiliates, and other online products. Find your niche and get started.

3. Celebrate Your Wins

As you progress in your debt payoff journey, don’t forget to celebrate your wins. You need to always reward yourself for the hard work and discipline that is required to get out of debt.

While you shouldn’t celebrate so big that it increases debt, make sure to factor in little rewards to keep you motivated.

4. Set New Financial Goals

Eventually, with a plan and these steps, you can rid yourself of your debt. Once you do, make sure to celebrate your monumental achievement, but don’t stop there.

Now, you can focus on acquiring wealth and increasing your net worth. Set new financial goals so you have a new target to aim toward. Here’s how to set financial goals and actually meet them.

These could be anything now that you are debt free! Think about where you want to travel, buying your first home, or saving for your future retirement. Just like before, make sure that your goals are specific, measurable, and achievable.

Conclusion

Congrats, you can now set a plan in motion to finally pay off your debt quickly (and hopefully forever)!

Remember, if you want to get out of debt quickly, it’s not always easy. Just like any big goal, there will be sacrifices, challenges, and problems to overcome.

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Featured photo credit: Pepi Stojanovski via unsplash.com

Reference

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