Black Friday is the day after the US Thanksgiving Holiday. It is the first day of the shopping season that traditionally ends on Christmas Eve. Retailers traditionally slash the prices of merchandize and shoppers go into a frenzy trying to buy what they otherwise could not afford. It is a time for shoppers’ exuberance.
However, if not properly planned it results in spontaneous shopping, spending outside budgets and getting into debt. Money that should be used for other important things are diverted into things that we do not need. Many times, what we buy are upgrades or additions to things we already have. These purchases boost our egos but deplete our wealth. Last week we learnt that while advertising might encourage us to save 50% if we buy an unplanned item, not buying at all helps us to save the whole 100%.
Black Friday discounts are real, every wise and prudent shopper needs to take advantage of them. But only in a planned and disciplined method.
We plan by identifying the items we want to buy; even luxury items and occasional indulgences are permitted as rewards for our hard work. Begin early to save towards these purchases using target savings accounts also known as sinking funds. The problem with spontaneous spending is not always the items purchased, it is the fact that the spending is unplanned and therefore throws our financial budgets out of sync and delays the achievement of our financial goals. Target savings on the other hand are incorporated into our spending budgets and therefore do not hinder our goals. Open a new savings account or use one in a bank you do not usually patronize. Reject the 21st century banking conveniences like debit cards, mobile banking etc. This way you are not easily tempted to spend the money on other things. Set up a standing order from your main bank account to credit the sinking fund with the periodic savings amounts – this way the savings are automatic and not subject to your changing moods or circumstances. Choose a transfer date that is as close to your monthly salary date as possible. This way, you save first and spend what is left. Most people fail at savings because they spend first and try to save what is left, but often discover that there is never anything left to save after spending. So, always save first.
The discipline involved is that of delayed gratification. That concept has almost become taboo in today’s world of instant coffee, instant banking and instant shopping. However, everyone committed to financial prosperity must learn and master delayed gratification. With this mastery, one is able to overcome the attractions of spontaneous shopping.
We have discussed many times in this column that we should avoid using shopping as a pastime. Visit shopping malls with purpose, do not just wander in; especially during the Black Friday sales. Go in with a shopping list, buy the things on your list and leave the mall. Do not take all your payment cards with you, take only the one with the money required for the purchases. Leave the cellphone registered with your bank for mobile payments at home or even in the car. By the time you leave the store to get your phone or additional payment cards, usually the impulse for the spontaneous shopping has ebbed. Pay attention whilst paying for the discounted goods; ensure the prices displayed have been entered into the shop’s cash register, that you are being charged the new low promotional prices and not the old higher ones. Also, it is wise to set a spending limit for all Black Friday purchases. Share this limit with a trusted friend who can help monitor your compliance.
For those of us still struggling with discipline, we need to help ourselves. During this period, avoid eating at restaurants located within shopping malls – what you cannot see, ordinarily cannot harm you. Go to the cinema after shops have closed, watch the 7pm airing. If you are going with children and have to go in the daytime, choose standalone cinemas that have few or no shops.
But in these days of e-commerce, you do not have to leave your house before you shop. Adverts for Black Friday sales are already popping up on our phones and computers. Shopping lists and spending limits monitored by trusted friends would help us maintain our financial discipline even in cyberspace. In addition to these, let’s ensure we practise safe cyber shopping.
Buying necessities during Black Friday sales is a greatway to spend wisely. Happy shopping. Happy investing.