Shop Smarter: 4 Financial Tips for Navigating Black Friday & Holiday Shopping
14 Nov 2024
As Black Friday approaches, shoppers everywhere are gearing up for deals and discounts, eager to check items off their holiday wish lists. While these sales events can be a great opportunity to save, it’s easy to overspend if you’re not careful. Here are four financial tips to help you shop smarter during Black Friday and the holiday season.
1. Create a Budget and Stick To It
Adobe Analytics reported a record $9.8 billion in Black Friday online sales alone in 2023. That is up 7.5% from 2022, showing that the allure of sales continues to drive significant spending. Without a clear spending plan, it’s easy to get carried away by the excitement of seemingly irresistible deals.
– Define Your Spending Cap: Start by determining how much you can afford to spend overall, considering your monthly expenses and savings goals.
– Break Down Categories: Allocate portions of your budget for specific categories like gifts, holiday decorations, and travel. For example, if your total budget is $500, you might set aside $300 for gifts, $100 for travel, and $100 for décor.
– Use Budgeting Tools: Apps or even a simple spreadsheet can help you track your spending in real-time.
– Plan for the Unexpected: Leave some wiggle room in your budget for unforeseen expenses, like a last-minute gift or shipping fees.
2. Research and Compare Prices Beforehand
Not all “deals” are created equal. Retailers often inflate original prices to make discounts look more attractive. In fact, a 2023 survey by NerdWallet found that nearly 50% of shoppers overpaid during Black Friday because they didn’t compare prices.
– Track Price Trends: There are online tools that can show historical pricing and help you identify whether a deal is actually worth it.
– Make a Wish List: Create a list of items you want to buy and check prices at different retailers well before the sales start.
– Sign Up for Alerts: Many stores offer early access to deals or coupons for email subscribers. If you are shopping online, there are also apps that can help find coupon codes.
– Don’t Fall for Marketing Tricks: Terms like “limited time” or “while supplies last” are designed to create urgency. Take a moment to evaluate whether you truly need the item or are being swayed by FOMO (fear of missing out).
3. Shop Strategically Online and In-Store
Black Friday is no longer just a one-day event; it has evolved into a weeklong (or even monthlong) shopping marathon. Cyber Monday, for instance, brought in $12.4 billion in 2023, according to Adobe Analytics. Shopping strategically helps you take advantage of deals while minimizing stress and impulsive spending.
– Evaluate Online vs. In-Store Sales: Some stores will offer different prices online vs. in-store. Before you start shopping, check both.
– Check Store Policies: Some stores will have different policies for returns and price matching during the holiday shopping season.
– Don’t Make Unnecessary Purchases to “Save Money”: Adding things you weren’t planning on purchasing to your cart to get free shipping or an extra $5 off might feel like you are getting a good deal, but evaluate whether or not it makes financial sense.
4. Beware of Buy Now, Pay Later
In recent years, Buy Now, Pay Later services have become increasingly popular. These services can make purchases feel more affordable by splitting payments into smaller installments. However, they can also lead to mounting debt if not managed responsibly. A LendingTree study revealed that nearly 47% of BNPL users missed at least one payment in 2023.
– Read the Fine Print: Not all BNPL services are interest-free. Some charge interest rates comparable to credit cards, especially for longer-term plans.
– BNPL is Debt: A lot of people don’t view buy now, pay later as a form of debt – but it is. BNPL is a type of short-term loan, and over using it can have long-term financial consequences.
Bonus Tip: Make The Holidays About Presence, Not Presents
In today’s consumer-driven culture, the holidays often revolve around buying and gifting, creating financial pressure and overshadowing the season’s true purpose. According to a 2023 survey by Credit Karma, 40% of Americans went into debt during the holiday season, primarily due to gift shopping. Shifting the focus from material gifts to meaningful experiences can ease financial stress and foster deeper connections with your loved ones. Talk openly with your family about the pressure of holiday spending and why you’re prioritizing experiences over material items. This transparency can set the tone for a more intentional holiday celebration.
Important Information:
Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
