Tuesday Tip: Keep Your Earnings Safe This Black Friday

By Yehudit Garmaise

While retailers gear up to invite us to participate in the frenzied party atmosphere of Black Friday, which greatly benefits businesses while indebting consumers, how can we avoid the trap of spending money unnecessarily?

First, consumers must understand that retailers coined the term “Black Friday” because the day that launches the end-of-the-year spending madness gets many businesses out of the “red” of debt and “into the black” of profit. 

How can we deal with the temptations to check out the “huge discounts” that scream out in large, colorful font on every storefront, advertisement, and web page?

As Yidden always do, we can express gratitude for what we have, while as responsible budgeters, we can plan for what we need while saving for emergencies and for the future.

We can also keep in mind the following tips:

1. Ignore over-hyped, flashy sales: While most people love “a great deal,” we have to remember that the things we buy, even at “75% off “will instantly result in our hard-earned cash disappearing from our checking accounts. When money says goodbye from our accounts, that is called “spending” and not “saving.”

2. Stay aware of the concept of a “loss-leader,” in which crazy deals are advertised to get customers in the door. Once in the store to grab a heavily discounted item, customers often see many other appealing items that find their way into shopping carts. 

For instance, have you ever headed to a department store for toothpaste and diapers and ended up spending $100 on a bunch of random items? Don’t fall into the trap. 

Some shopping carts are extra-large for a reason. The store’s owners want you to fill them up and spend as much as possible. Shop with a particular goal in mind, pay for your item, and then leave the store once your mission is accomplished.

3. Create a budget and stick to it. If you do want to pick up a thing or two on Friday, first ensure that you have money to cover your rent, utilities, food, tuition, transportation, phone, and the tzedakah you give.

Account for every dollar you earn and every dollar you must spend on necessities. If you have money left over for gifts and little indulgences, set a limit on that amount per month.

4. Track your other spending every day. Do you have room in your budget for things like the to-go coffee you pick up on the way to work and the lunch you buy when you didn’t have time to pack anything?

In the weeks to come, as Chanukah nears, maybe forgo the $100 or $200 you might have spent on take-out food and drinks and instead use that cash for Chanukah gifts for your kids and spouse.

5. Ask yourself why you want to spend. Do you find yourself browsing on Amazon when you are stressed or angry? Do you click on “Purchase Now” to give yourself a burst of good feeling when you are feeling down? Instead of slowly watching your bank account disappear, consider whether you would be better served by reaching out to a friend, going for a walk, taking a fun break, or even taking a nap.

6. Clarify your financial goals. Do you want to buy a condo or a house in the suburbs? Upgrade to a new car? Go on a vacation somewhere quiet and sunny? Set yourself a financial goal. By this time next year, how much do you want to have saved? By refusing to buy unnecessary things in the next 12 months, think about how much you could save: $50,000, $100,000? The sky’s the limit when your hard-earned money stays in your bank account.

7. Pay with cash or a debit card so you physically see money leaving your hands and bank account. Credit cards may offer points and rewards, but consumers almost always spend more with plastic than when using cash.

“Think about it: when you spend cash, you can feel it,” says ramseysolutions.com “You may have second thoughts about letting those crisp or worn bills leave your hands. Something inside you cringes.

“Just moments before, you had money, and now? You don’t.”

Credit card users don’t feel the pain of spending until the end of the month when they open up their fat credit card bills with dread.

Such painful moments are good because they discourage us from spending too much. With credit cards, however, you give your card to the cashier, who then returns the card to you. You know you won’t be charged for a while, and you don’t have the sinking feeling that something that you earned is now gone forever.

8. Commit to avoiding debts: “Credit enables you to spend money you don’t even have,” said ramseysolutions.com, warning about the compounding interest rates that balloon every purchase. “If you don’t have the cash to pay for something right now, you can’t really afford it.”