Shopping Tips to Stay Out of the Red on Black Friday

holiday cyber monday shopping tips

Black Friday is typically the busiest shopping day of the year.  Although Christmas creep is causing many retailers to open their doors on Thanksgiving Day, Black Friday remains the official start of the holiday shopping season.

Over 115 million American consumers are expected to participate in the annual Black Friday shopping ritual. However, in all of the hype and hoopla surrounding this day of sales, it’s important to make wise financial decisions instead of being driven by impulse spending or a desire to keep up with the Joneses.

For women, saving money is particularly important. A Creditcards.com survey reveals that more women than men are losing sleep over financial issues, such as saving for retirement, education expenses, health care/insurance, mortgage/rent and credit card debt.

According to a Transamerica Retirement Survey of American workers, 64% of women are not confident about retiring, and 51% of women plan to continue working even after they retire. In other words, women aren’t retiring anytime soon. The survey also reveals that 64% of millennial women don’t have any type of backup plan if they were rendered unable to work until they retire.

There’s another reason why women need to be savvy shoppers on Black Friday. We tend to shop for everyone: husbands and partners, children (including gifts for their teachers), parents, and in-laws. Every purchase is an opportunity to either squander or save money.

The Top 5 Tips

The American Institute of CPA’s National CPA Financial Literacy Commission has put together the following 5 tips to help you stay out of the red on Black Friday.

#1: Use a budget. According to David Almonte, a Providence, Rhode Island-based member of the AICPA’s Financial Literacy Commission, you really do need to make a list and check it twice. “Make a list of everyone you need to buy a gift for this Holiday season with respective budgeted dollars for each person,” he says. “A budget of $25 per person may not sound like a lot of money, but if you have to buy gifts for 30 people, it can quickly spiral out of control.”

The AICPA also recommends mapping out how much of your income has to cover fixed expenses and necessities (rent/mortgage, car payments, utilities and insurance), in addition to the amount you plan to set aside for longer term goals like saving for retirement. Don’t forget to also include other items like clothing and shoes, jewelry, dining out, vacations, etc. When you know how much you can afford to spend, you’re in a better position to make wise spending decisions.

#2: Give the credit cards a rest. For some people, the AICPA says leaving the credit cards at home and shopping with cash can be really effective. Almonte explains, “Credit cards can mask the impact of overspending because the effects are not felt right away; the pain is delayed, whereas using cash creates an instant pain or hole in your pocket.”

#3: Keep score. You can use the calculator on your phone to track the price of items going into your cart. And in big box stores, the AICPA warns that filling up your carts with a bunch of inexpensive items can result in an unpleasant surprise at the register. Also, set alerts on your phone to send you a text or email when you make a purchase to provide a reminder of how much you’re spending.

#4: Shop tactically. Consider taking a friend with you. Almonte explains that having someone else along can provide accountability. Also, this can help counter a strategy used by retailers: in many stores (especially higher end establishments), the AICPA warns that salespeople are trained to play the role of your friend – but they’re providing flattery and encouraging you to make purchases.

#5: Try a cooling off period. When you find an irresistible item that appears to be offered at a fantastic price, ask the store to hold it for you for 24 or 48 hours. The AICPA says this will give you time to consider if you really need the item or if it is an impulse buy. “Keep in mind that the ‘super awesome incredible one time only 50% mark down’ may be a great deal, but that doesn’t mean you can afford it,” Almonte warns. “Sometimes we have to pass on things now so we can experience them later on, when we can truly afford them.”  If you decide you still want to purchase the item, search online to be sure you’re getting it at the best price. “Retailers may advertise substantial savings on an item that was never priced as high in the first place,” Almonte says.

5 Additional Tips

We also reached out to WalletHub to see if they had any advice for Black Friday shoppers. WalletHub Analyst Jill Gonzalez offers the following tidbits:

  • Kohl’s, JCPenney, and Belk are 2017’s best stores for Black Friday bargains, offering an average discount of at least 62.8%.
  • Over 8% of items will be more expensive on Black Friday than they currently are on Amazon.com.
  • Books, movies, and music will offer the most value on Black Friday relative to their current prices, while jewelry, apparel and accessories are expected to be the worst deals.
  • iTunes, Starbucks, and Walmart top the list of best gift cards.
  • All of the major retailers offering 0% financing use a dangerous feature called deferred interest, which has the potential to make holiday purchases up to 27.5 times more expensive than expected.

“Deferred interest is a consumer trap that finds most of its victims during this time of year,” Gonzalez warns. “Even if it boasts a 6-month introductory 0% interest period, it then retroactively charges interest on your entire purchase if your balance is not paid in full by then.”

She uses the example of opening a store credit card account to finance a new $800 TV. “However, due to unplanned events, it takes you seven months to pay instead of six.” Gonzalez says the deferred interest would cause you to pay an additional $55 just in interest. “Had you bought this item using a normal 0% credit card, you would have ended up paying just $2 in interest (assuming a regular 20% APR) because the interest would only apply to the remaining balance, not the entire purchase.”

Bonus Tips

HER Magazine also has two tips for Black Friday shoppers. Avoid the gender price gap, also known as the “pink tax.” This occurs when retailers charge women a higher price for the same types of products.  The New York City Department of Consumer Affairs analyzed approximately 800 products and discovered than women paid more than men in 42% of the cases. However, this isn’t a Black Friday phenomenon – it occurs 365 days a year.

The final tip: consider supporting women-owned businesses.

 

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