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Make sure Black Friday (or holiday shopping) doesn’t put you in the Red

Black Friday is the traditional kickoff to holiday shopping and it seems to always begin with a frenzy of activity. This frantic activity often causes impulse buying leading to overspending on the holidays. And it’s not just black Friday but the entire holiday shopping season that needs to be considered.  Whether you are reading this on November 26th or December 15th, the tips below can help you stay out of the red financially speaking.
What is the first step to surviving Black Friday financially?
Start by developing a list of everyone you want to buy a gift for and how much you would like to spend on each person on your list.  From this, list a few ideas of gifts that might be appropriate for this person and what you think each item will cost.
What if you don’t really have any idea of what something might cost?
That’s fine, because the next step is to research and determine if the items on the list can be purchased at the price you have estimated.  And during this research, you can determine the best place to buy the items on your list.  If after this research you are completely over your budget, you have time to make adjustments with gift ideas to get more in line with your budget.
What else should we be researching besides price?
A couple of other important items should be vetted.  First, is the return policy of the stores on your list. You want to make sure if there is anything different with the return policy if purchased during a special sale or at a discounted price.  The other item is to make sure there are not special circumstances required to get the special price.  This might include things such as spending a certain dollar amount or buying a certain item to get the other item on sale.
Can we overspend even if we shop with a list and a budget?
Unfortunately it can happen because we are constantly making changes to our plan while shopping. If we don’t really keep track of what we are spending, the extra $20 we spend here and there all of the sudden is $500 extra.  The trap is that we have the feeling that we are still pretty close to our budget so we keep spending just a little extra and don’t realize how much we have gone over budget.
Since most people don’t want to update a spreadsheet while shopping, is there an easy way to keep track?
There are two methods.  One is to shop completely with cash which I don’t recommend from a safety perspective. The second method is to utilize a simple overall budget that is your safe total safe to spend amount.  All you need is a piece of paper, a pencil and the calculator on your smart phone.
How does the safe to spend budgeting work?
You start with your total holiday budget and with each purchase subtract that amount from your safe to spend balance.  Keep doing this even if you are going negative. This method allows a person to always know where they are and by how much they are exceeding their budget.  I am not recommending going over budget but at least you know before the credit card bills come in late December.
What do you say to the person who will buy anything that is on sale?
That is not a good shopping habit when shopping on Black Friday. Almost everything will be on sale in a store.  If you don’t control your spending your holiday budget will be shredded after the first store you visit.  Only buy what you were already planning to buy. Remember, all sale prices are good but they may not be good for you and your financial well-being.

Posted: 11/25/2015 with 0 comments

Categories: Budgeting, Money Matters, Spending

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