Friday, November 27, 2009

Financial Tips for Black Friday

According to Business News, American consumers spent an estimated $41 billion on Black Friday in 2008. The average consumer spent $372.57 on retail purchases, a 7.2 percent increase from the year before. What does this piece of information tell us regarding our spending on Black Friday? Simply this: American consumers are becoming more confident shoppers on this day than any other shopping day during the Christmas season, if recent spending trends hold up. And given this confidence, it should be noted that there are dangers associated with spending on mega-retail days such as this. Here are a few, simple spending guidelines that I believe we would be wise to follow:

1) Know before you go.
  • Even though Black Friday is considered the day of great deals, it is still necessary to understand the dangers of shopping aimlessly. The aimless shopper is much more vulnerable to the random purchase. These purchases tend to be less expensive per item, yet they end up costing more due to volume. There is not a more deceptive way to spend monies than to aimlessly purchase on Black Friday. The aimless shopper looks at their receipt after the shopping day is over and wonders how in the world they spent so much on all of those unplanned purchases.
2) Buy to keep.
  • Black Friday presents a lot of "bargain" prices. And when shoppers see bargains, they are less likely to think through the implications of "bargain-based" buying. Bargain-based buying is the buying based on the "deal" and not the need/plan. The dangerous excuse for bargain-based buying is that if you change your mind or if it doesn't really fit, you can take the item back for an exchange/refund. Sometimes this type of buying is actually used as an excuse for shoppers to have a Black Friday carryover shopping day. But returning the bargains for exchange/refund can be costly. The gas to get there. The food court or the restaurant. The additional unintended purchases. The prices go up after Black Friday; therefore, many times the bargain-based purchase loses spending power when refunded. It is better (and typically less expensive) to buy what you intend to keep.
3) Don't be compulsive.
  • The danger of not knowing what you intend to buy before you shop is compulsive spending. The retailers are at the consumer's mercy, but they don't want us to know that. From displays to retail shopping music, all is set up to provide a relaxed shopping experience. Avoid the tendencies to wonder away from the game plan. Make a list and stick to it. Some say it isn't as fun. I beg to differ. It is much more fun to stick to items planned for, shop for the best prices on those items, and make it home with some semblance of a budget intact than to carelessly/needlessly spend the Christmas Holiday in financial hardship.

I believe that these tips are helpful for any shopping day; however, extra caution must be used on the day that every consumer seems to be a little bit more willing to open up their pocket books--a 7.2 percent more. Be wise. Have fun. Be careful. God bless.

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