Navigating Black Friday Deals: A Guide to Financially Smart Holiday and Christmas Shopping
As the holiday season approaches, the anticipation of Black Friday and Cyber Monday deals is undeniable. However, the excitement can sometimes lead to overspending. There are ways to make the most of this shopping extravaganza without sinking into debt. Here are some tips for a financially savvy holiday shopping season.
Make a Shopping List:
We've all been there - falling for unnecessary "shiny" deals that we didn't plan on purchasing. To guard against impulse buys, create a detailed shopping list including the number of gifts per person. Also, plan your shopping by store to take advantage of free shipping deals and knocking out several gifts in one shopping trip. By sticking to your list, you'll keep your spending focused and avoid any regrets.
Set and Prioritize Your Budget:
Next, if you haven't already, establish a realistic budget. Review your list and prioritize your purchases, categorizing items from "must-have" to "nice-to-have." Some might fall off the list if they don't fit in your budget. This ensures that your spending aligns with your financial limits. I recommend that people set a budget for holiday shopping at the beginning of the year and save 1/12 of that each month in a High Yield Savings account. Then you have the funds to pay for your gifts in November and December.
Beware of Marketing Tactics:
When browsing through the irresistible deals, it's essential not to fall prey to FOMO and be swayed by tricky marketing. This is tough. There are smart people using all kinds of emotional tactics to get you to part with your money. As a former marketing professional, I see retailers use all kinds of psychological schemes:
Creating the perception of scarcity with language that urges you to buy now, like "limited edition", "while supplies last", and even a (false?) number of items left in stock.
Giving "one day discounts" or offering a special price to buy multiple items to get you to buy more than you planned.
Free shipping at a purchase threshold: This is the "free shipping on $75+" tactic. If you need to spend $25 more than you came in to buy to save $8 on shipping, that's not a deal, you're just spending more than you planned.
Using countdown clocks or timers to create urgency to purchase immediately.
Opening a credit card to earn a one-time discount. Chances are you do not need this credit card, but studies show once you have it, you will buy more from that retailer and you’ll be more likely to carry a balance. This is a smart tactic for the retailer, not for you.
Inflating prices and creating false discounts and sales (Kohl's: I'm looking at you and your $24 socks).
Doorbusters and Black Friday/Cyber Monday deals at deep discounts are loss leaders, meaning retailers promote a limited number of items to get you in the store/on their website to purchase more. Studies prove that if you physically go in the store, you will spend around $50 more than what you planned.
You can absolutely take advantage of these deals, but stay mindful and focused on your list to make the most of your budget.
Take Time to Shop Around - Within Reason:
Whether you prefer shopping in-store or online, planning ahead is key. If you're shopping online, bookmark the pages of the items you want to purchase or add-to-cart and don't check out; wait to see if the price changes or the merchant emails you a coupon code for a discount (many sellers on Etsy do this).
While it's great to be prepared and do your research, remember your time and emotional energy spent looking for deals and gifts is valuable. Put a time limit on shopping, which will also help you from overspending. If you see what you want and the price is within your budget, buy it and move on. Be kind to yourself if you happen to see the item later for a dollar or two less. In the grand scheme of things, a couple of bucks won't break your budget.
Use Cash Back Shopping Sites:
For shopping through sites like Rakuten, Honey, Swagbucks, and MyPoints offer a percentage back of your online shopping bill, which you receive as cash through PayPal or in your bank account. There is no fee to use these services. Stacked with a cash back credit card like Fidelity Rewards Signature Visa (my personal favorite with 2% going into my Roth IRA and growing tax free), this can add up to real money. Personally, I use Rakuten and since 2017 have gotten over $1,600 cash back, just from regular online shopping and gift buying.
Note: I am fiduciary and do not earn any commission or referral bonuses from links or suggestions in my articles, financial counseling, or financial coaching.
Set Up Price Alerts:
Technology can be your ally during Black Friday. Consider using apps or websites that allow you to set up price alerts. This way, you'll stay informed when prices drop and be able to capitalize on the best deals without constantly checking manually. Make technology work for you and save money effortlessly. Try CamelCamelCamel for Amazon prices, SlickDeals or DealNews.
Understand the Return Policies:
In the midst of the Black Friday excitement, it's crucial to familiarize yourself with the return policies of retailers before you buy. Knowing the deadlines and potential fees will save you from surprises (like having to pay return shipping) if you need to return an item. This way, you can shop stress-free, knowing that you have all the necessary information.
Smart Shopping for Gift Cards:
When purchasing gift cards, exercise caution. There are shady resellers in the online market. Protect your financial well-being by being mindful of where you obtain your gift cards from. Good bets to purchase almost any kind of gift card are traditional retailers like Target, drugstores like Walgreens and CVS, and grocery stores like Wegmans or Safeway for those of us in the Northeast US. Purchasing at a trustworthy retailer and saving your receipt means you have leverage in case anything goes awry. Be sure to check out my article on gift card shopping.
Avoid Using Credit Cards Recklessly:
During Black Friday, it can be tempting to use credit cards for your purchases to get points or cash back. If you decide to use credit, ensure that it aligns with your budget, and commit to paying off the balance promptly to avoid interest charges. Remember, it’s not a deal if you’re paying interest on what you bought!
Bottom Line:
Approach Black Friday and Cyber Monday holiday shopping with a strategic and disciplined mindset to make it a win for your wallet. By setting clear financial parameters, following your shopping list, resisting the hype, using online tools to earn cash back and find the best deals, you can secure the best deals while keeping your finances robust. At Journey Financial Wellness, we wish you happy and smart shopping! Remember to cherish the financial journey, enjoying every step along the way.
If you would like saving or budgeting help, learning how to pay off debt, or just want to get better control of your finances, please contact me!
