Tomorrow is Black Friday, the official, unofficial kick-off of the holiday shopping season. (Except apparently, many retailers kicked off their Black Friday promotions today, or even at the beginning of this week.) That will be followed by Small Business Saturday, a truly commendable effort to get consumers to spend with small business owners, our nation’s biggest source of jobs. Of course, shopping will continue on Sunday, to be followed by CyberMonday—though with nearly every brick-and-mortar retailer offering shopping online as an option, that designation is well on its way to irrelevance. Then, if retailers get their Christmas wish, consumers will spend non-stop through the first week of the New Year.
Whatever retail “holiday” you want to celebrate, I just want to give you a reality check: Shopping until you drop is not worth ruining your financial health—or if it is already poor, making it even worse. Yes, a healthy amount of holiday spending will be good for our economy, and certainly for retail stocks. But that does not justify spending more than you have and going deeper into debt. Don’t get so caught up in chasing deals (many of which, according to my friends in the retail business, aren’t really new or all that exceptional) that you shop yourself into the poor house. For too many us, the euphoric high of holiday shopping peaks into an outright frenzy (sometimes even resulting in injury or loss of life), followed by a devastating crash of depression, guilt and stress over debts that will make the new year anything but happy.
So before you head out to the mall (or jump on your computer) to start shopping, I’m asking you to think before you shop. Consider the following:
If everything is on sale, why are you broke? Hint: Retailers are not in the business of helping you to spend less money, no matter what their commercials claim. The only way to save money is to create a budget for what you plan to spend, find deals to help you spend less than you’ve budgeted for, and then bank (not spend) the difference.
Remember, there is no such thing as free. When it comes to retail advertising, free is just a trigger to get you to spend. Don’t believe me? The next time you hit a “buy one, get one free” promotion, say to the sales clerk, “I don’t really need two; may I just take the free one?” Don’t go for two-for-one deals unless you will use the extra one to avoid buying another gift you’ve budgeted for. Otherwise, you’ve saved nothing on the deal.
If you insist on spending more than you have, you may never stop paying for whatever you get. If you abuse credit cards (meaning using them for cash you don’t have), you will likely still be paying for those purchases for months, or even years (depending on the cards’ interest rates and the size of your monthly payments). Thinks of the toys, clothes, electronics and other items many of us are still paying for, long after they’ve been outgrown, broken or forgotten.
If it’s not worth saving and budgeting for, it’s not worth borrowing (via credit cards) to have. Shopping using savings, as opposed to borrowing, means you’ve paid once, and you’re done. It doesn’t mean you can’t use credit cards for convenience sake, but have the cash on hand to pay the entire bill when it comes due, not just the minimum payment. Otherwise, you’re just kidding yourself into believing that you’ve paid for the purchase.
Living within your means is not about deprivation; it’s about prioritization. It means owning nice things, instead of them owning you because of your debt burden. I’m not saying that you shouldn’t be shopping for gifts for your loved ones. (Hey, I want you to spend, too. A subscription to Black Enterprise or a bow tie from the new Windsor Neckwear Alfred Edmond Jr. Collection are great gift ideas.) I’m saying that going deeper into debt and destroying or deferring your financial freedom in the name of holiday deal chasing is not an act of love for your friends and family, and certainly not for yourself.
Black Friday is not a justification for destroying your financial health. The best gift you can give to yourself and those who love you (which, let’s face it, is not necessarily the same as those you love) is to honestly determine what you can truly afford and to not spend a penny more than that.