It’s no surprise that heavy-duty spending over the holidays is a major budget-buster. In fact, in 2017, Americans racked up an average of over $1,000 in holiday debt, according to a survey by MagnifyMoney.
And, perhaps the biggest contributor to this debt hangover is Black Friday. While seemingly innocuous, if you’re not careful, going overboard with end-of-year deals can put a serious dent in your bank account. Plus, you run the risk of spending more than you can afford or buying something you simply don’t need.
Take it from us: Going on a sales-fueled spending spree during Black Friday isn’t the best way to kick off the holidays. Here are some ways to avoid Black Friday fails:
Check the Money in Your Account
I personally avoid Black Friday like the plague. There’s no better sale than not spending money in the first place. But I get it. Let’s say you’ve been holding out for that shiny new laptop or gadget all year long. Black Friday or its equally evil cousin, Cyber Monday, may be the best time to purchase it.
If you must spend on these deal days, start by checking on how much money is sitting in your bank account—and how much you can safely spend. Look for surprise pockets of savings, such as money you have stashed away in your automatic savings account via a mobile banking app, or cash you’ve put into a savings goal bucket on your money saving app.
Stick to a List
Just like sticking to a list while grocery shopping can help you stay within your budget, you’ll want to create a shopping list before Black Friday. Otherwise you’ll be lured by the mountain of promotional emails landing in your inbox.
If it helps, make two separate lists: items you’ll purchase for gifts, as well things you’d like to buy for yourself.
Create a Budget
Next, gauge how much you can reasonably spend on Black Friday. Will you be purchasing stuff just for you, or for holiday gifts?
Figure out how much you have available to spend over the holidays. And don’t forget to factor in your expenses like holiday-related travel, attire for holiday work parties, gift wrap, gift cards, food for gatherings, and presents.
Do Your Research
Before you click “buy” during Black Friday or Cyber Monday, make sure you’re actually getting a good deal.
A lot of retailers may use “anchoring,” which shows the discounted price against the actual price. This gives consumer the illusion that an item is a bargain, when in fact it isn’t. To avoid bogus deals, do a bit of price comparison beforehand. There are a handful of price comparison websites, like PriceGrabber and Cyber Monday, that can help you find the best price for practically any item in existence. You may discover that the “killer mega Black Friday deal” you’re excited about isn’t actually netting you the best price. Bottom line: Shop smart.
Figure Out the Value Add
If you’re buying something for yourself, make sure the item adds value to your life in some way. This way you’re not spending money frivolously.
My partner said it best when he said that commitments are easy to fall into, but hard to get out of. And whether you like it or not, you have a commitment to the stuff you buy. So, let’s say that you buy a guitar at a huge discount. Once you do this, you’re held accountable for playing that thing. Or else you’ll just hear a nagging voice inside your head whispering “you should probably pick up that guitar.” That’s a slight mental anguish you’re probably better off not dealing with in the first place.
Figure Out the Cost-Use Ratio
When I’m quibbling over whether to buy something or not, I figure out how many times I need to use that item for it to be worth the price. For instance, let’s take a $50 pair of shoes purchased last year as an example. In my book, if I wore those shoes at least 10 times, they would have paid for themselves.
While there’s no perfect science to this, it’s important that you place a value on your item and make sure it’s worth purchasing to begin with. For instance, I could care less how many times I use a dish sponge before it goes into the trash. But for high-value items? I care. I spent $300 on a pair of boots last year. While this seems pricey, I wear them practically everyday. I got my money’s worth.
Don’t Waste Your Time
Time is money. And what’s more important, your precious time is a finite resource. You could be spending your time side hustling, with the fam bam, or having a leisurely, “do-nothing” afternoon.
So, if you see an inexpensive item you want to buy, just do it and don’t feel stressed out or guilty about it. Why shop around for a better price on two dollar dish towels? Um, not worth it.
Avoid Major Fallout
To avoid major Black Friday fails, you just need a little forethought and prep work. Sure, spending is a lot of fun, but you need boundaries – otherwise you may suffer from a regrettable case of holiday debt hangover once sale season subsides.
Instead, take a look at the tips here and shop wisely. You’ll be surprised by how much money you’ll save when you just make a few simple changes.