Black Friday is the most competitive selling event of the year for major box retailers, technology companies, and entertainment providers. Companies are expected to offer the best deals on their goods and services in an attempt to bring their yearly revenue books out of the red (taking a loss on the year) and into the black (at least breaking even, or reporting revenue). For many companies, the single day of shopping on Black Friday can make or break their fiscal year.
That said, the same flow should apply to your finances, in a sense; is it worth the debt and potential financial troubles if you go overboard on spending the day after Thanksgiving? It used to be that shoppers broke down doors and even trampled each other for the chance to be the first to get their hands on electronics and children’s toys. But with the advent of Cyber Monday and online retailers beginning participation, Black Friday is a much safer event. The byproduct of that safety in person is the danger of over-spending online since it is so easy to complete a purchase and you never see your personal funds change hands. Knowing your limits is crucial, and we are here to help.
Do stores raise prices before Black Friday?
Yes, they do. Newer items in most stores are at a constant, full retail price leading all the way up to about four or six days before Black Friday. The week of Black Friday, retailers often increase prices ever-so-slightly in order to make the Black Friday discount seem even more significant.
BusinessInsider.com explains, “…retailers will slightly increase the “normal” price of an item in the days before their Black Friday sales so that the discounts appear deeper. In fact, WSJ reported an 8% increase in a fifth of the sale items it tracked before Black Friday and a 23% uptick in the pre-sale prices of toys and tools.
The prices in-store can even be significantly more expensive than the prices you will find online. This is because you usually see the biggest discounts in-person, as the comparison on the tag is what lures you to the purchase. This makes the best time to purchase things like electronics and toys either on Black Friday/Cyber Monday, or at least two weeks in advance of Black Friday.
How do you get doorbusters on Black Friday?
Doorbusters deals are designed to build hype and ensure a massive sales day for the retailer by instilling a sense of urgency within the shopper to get there before a certain time for the best price. That means doorbuster items are both heavily marked down and heavily advertised.
But are doorbuster deals really worth it? DealNews.com isn’t exactly convinced: “Some doorbusters are genuinely great deals, but you’ll have to do your homework to find out. Certain ‘doorbuster’ sales feature good but not great prices — and are definitely not worth skipping out on the annual turkey and stuffing.
Before you wait in line, spend time checking prices to make sure the sale is as good as it looks. With stores all vying for your shopping dollars on Black Friday, you can expect prices to be competitive, so you may find similar prices at other retailers. You won’t know if a deal is truly good until you check around. DealNews’ own Staff Picks can help you tell a mediocre deal from a magnificent deal, as we’ll always point out when we’re seeing items at their lowest possible price.”
How much do you spend on Black Friday?
Ok here is the rough rub: There isn’t a specific amount that is recommended for all. It would be highly irresponsible for us to recommend a number to you that may or may not fit within your budget. According to the New York Post, in 2018 shoppers were planning on spending as much as $500 or more. However, also provided in that article is some subjectively absurd information. NY Post quotes Slickdeals’ research with this gem: “During the Black Friday season, sometimes Americans are forced to choose: Thanksgiving dinner or shopping for great deals. In fact, the average American said they would leave their Thanksgiving dinner to buy an item that was 44 percent off retail price.”
Yes, you read that correctly. At what point are you able to say “no thanks” in order to make sacrifices for the greater good? Have you applied your finances into a Budget Calculator to know exactly what you can spend in a single day on shopping items?
We’ve already covered how to protect your credit score, and how it impacts your financial future. In our humble opinion, a new TV or primo toy for Jimmy and Christine aren’t worth the hit to your credit score, should you at some point need a loan, or to change the terms of your mortgage. The general rule of thumb should be: “I have accounted for all of my bills for this month and next, and I still have X amount of dollars left over to spend.” That X isn’t simply a 1:1 ratio of what you should spend, however. Some of that extra cash could go to debt, or into a savings account for a rainy day.
How do I survive Black Friday?
If you don’t really need (not to be read as really want) anything major this year, and you feel confident in finding affordable Christmas or holiday gifts for friends and family, the best thing to do is stay away from your computer and the internet for a couple of days ahead of Thanksgiving, and through the following Cyber Monday. If you know you have a shopping weakness, there is no reason to jeopardize your financial future around this day, simply because major brands try to tell you it is a must.
If you do plan on shopping, many retailers, both online and in-store, will advertise their prices in advance. Compare prices, and most importantly, know what you are buying. With many Black Friday deals being big markdowns on models the retailer is trying to clear anyway, it may not be worth it to drop the cash.
If you are in debt, it is important to make sense of personal finances by getting organized. Once Black Friday and Cyber Monday are over, we recommend that you start a Snowball Debt Payment plan, which we detailed here.
The best thing to do for Black Friday is to identify absolute needs around your house, and potential gifts for family and friends. Then research the best prices and how to purchase those items in advance. Skip the mad rushes for big department stores that will tempt you into extra spending, and know your strict financial limits before completing any purchases online.
If you found our blog looking for financial advice or assistance with credit card debt relief or debt consolidation, call Golden Financial Services today at (866)-376-9846 or email@example.com. You can check out the rest of our blog here, and do your research on our services here. Let’s talk soon!