Caution! 50% sale DOES NOT mean you should spend 50% of the money in your checking account...
The day after Thanksgiving, “Black Friday,” is one of the busiest shopping days of the year. I’ve often wondered why they couldn’t have come up with a better name – it always makes me think of the plague… But actually, the day received its title because it’s when retailers finally go from the “red” to the “black”, meaning that they become profitable. On this single day the malls are packed with shoppers. Every big box store offers massive deals to coax more money from your wallet. If you’ve been shopping on Black Friday, you know what I’m talking about. It’s a festive, happy, lets-go-spend-every-cent-we-have kind of day.
That’s where we can begin digging ourselves a hole.
It starts easily enough. A store offers a fantastic special on a big-ticket item. Let’s say it’s a big screen television. Although you can’t really afford the price tag, it’s been marked down forty percent from the retail price for the first fifty buyers. Your television isn’t going to last much longer; the tin foil on the rabbit ear antenna is older than several of the neighborhood children. It’s a wonderful opportunity.
Or is it? If we go back to the single line “you can’t really afford the price tag,” how can you justify purchasing the television? If you buy it, you’ll either eat through your cash which was earmarked for other goals, ruin your cash reserves, or–worst of all–use your credit card to make the purchase.
If this “wonderful” deal doesn’t sink you, it doesn’t mean that you’re in the clear. Without a cash reserve and with your credit cards maxed out, the next time there’s an emergency where will you go for money? You’ll need to borrow cash to finance your borrowed money. The spiral begins.
I realize this article is beginning to sound a bit preachy. Believe me, that’s not at all my intent. My goal is to have everyone who reads this take advantage of deals on days like Black Friday because, as I mentioned earlier, there ARE some fantastic opportunities. I wanted to lead this piece with the horror story only to show you what’s at stake. Clearly, stores have a plan to separate you from your money. If you’re going to shop on Black Friday, you’re going to need your own plan to take advantage of all the great deals, while still keeping enough cash in your wallet for emergencies.
How should you shop on Black Friday? Here are some tips:
1) Make a list. If you shop from a prearranged list of items you want to purchase you’re less likely to splurge on items you can’t afford.
2) Comparison shop. Many stores offer similar deals on the same item on Black Friday. Don’t jump at the first deal you find. Research whether competing stores have an even better price.
3) Don’t forget the little stores. Sadly, it seems that local stores are forgotten on Black Friday. Not only do they have deals also, but many times you’ll find that one-of-a-kind item from a local retailer. Also, money stays in the community instead of feeding executives in some other city.
4) Leave the credit card at home. If you only have a predetermined amount of cash, you won’t be able to make some decisions you’ll regret when you return home.
5) On the topic of credit cards, avoid the store card pitches. Sure, you might get an additional 30 percent off the sweater if you open up a department store credit card. But at a 28 percent interest rate they’ll make that money back off you in a hurry in interest payments.
6) If this sounds restrictive and you want to splurge some, give yourself a “mad money” budget. You may find deals you weren’t able to research online or from advertisements. Just make sure the deal doesn’t cost more than you can afford.
That’s it. Six steps to a successful Black Friday. The best part? When you arrive home from shopping you’ll know that you spent within your means. There are few feelings worse than waking up after the holidays to find that you overspent and now, instead of focusing more on your craft, you’re going to work overtime at the job you don’t want just to make up for some bad, spur-of-the-moment decisions.
Happy shopping!