November 24, is the start of one of the busiest shopping weekends in North America. Coinciding with Thanksgiving celebrations in the United States, “Black Friday” and its associated shopping holiday “Cyber Monday” are two of the largest spending drivers before the Christmas holidays year in and year out. In fact, the American National Retail Federation estimated in 2015 that many retailers would account for up to 30% of their annual sales between Black Friday and Christmas Day. The trend, though American in origin, has certainly spread to Canadian  and global retailers and shoppers as well.

With the holidays in clear view, the pressure for consumers to act quickly on what looks like a fantastic Black Friday or Cyber Monday deal is certainly high. As such, this can be one of the most precarious times of year for anyone who is trying to make a positive impact on their personal financial situation. While flash-sale shopping can be an effective way to find what you need or want to purchase at a lower hit to your budget, it’s important to get through Black Friday or any other major shoppers’ holiday with a keen awareness of good personal finance practices.

Before You Shop: Make an Assessment

The surge of offers and deals leading up to Black Friday can derail even the most committed financial plan. We’re only human, after all! However, it’s extremely important not to cut corners on other areas of your budgeting, savings and cash on hand in order to make room for a Black Friday purchase. If you’re already choosing to boost your financial preparedness by, say, shifting more money from your day-to-day spending into an emergency account or a TFSA, don’t reroute that money towards just another spending avenue marked by a compelling and well-advertised set of deals. Even if you spend responsibly during Black Friday, it will still be one of the major allocations of your budget for the year: make sure you’re prepared and aware so that you’re not left with a “hangover” that could take a long time to recover from.

The Deal, Deconstructed

A Black Friday deal is a carefully planned retail exercise – on the part of the retailer, of course. Not that we’re calling anyone dishonest: however, deals like these are so popular because they rely on a particular kind of cognitive dissonance on the part of the buyer.

Simply put, if something is offered at retail for $100, and you buy it on sale for $50, are you really saving $50? Not exactly. You just spent $50! It sounds obvious, and almost comical, to some. However, this is not meant as a challenge to buyers’ intelligence. It’s simply a reminder to add up the “virtual cost” of these savings before you make a decision. Doing so might make a significant impact on your holiday finances.

Make Black Friday a Holiday From Your Debt

Though it was created to be a “shoppers’ holiday” to herald the start of the Christmas season for retailers, Black Friday doesn’t even have to be about spending at all. Why not take the day to put yourself “in the black?” This can be a great time to accomplish some debt reduction goals.

The end of the year can be an excellent time to review your accounts and pay down any existing credit card debt. The “spending hangover” from the holidays is something we often hear about, but recent research has put it into concrete terms and shown why paying off your debt before the holidays can be a real financial lifesaver. American financial services provider MagnifyMoney found that consumers who took on debt over the course of the holiday season were likely to ender the New Year with an average of $1,003 worth of new debt. That figure is up from $986 of new debt in 2015. Less than one-quarter of those surveyed bt MagnifyMoney said they could likely pay off their debt within one month. In fact, nearly half (46%) predicted that the “hangover” from holiday debt could last four months or more.

Spreading the Cheer Around: Think About Where to Spend

If there’s an upside to Black Friday and Cyber Monday, it’s that local businesses and small businesses also see an uptick in sales alongside big-box retailers and online giants. If you must splash out on your holiday’s gift budget, try to do so at one of these independent retailers – who often offer equally good, if not quite as well publicized, deals on their wares. By doing so, you’re putting money back into local economies and creating a positive pressure on the personal financial cycle involving you, the people you work with, and the goods and services you use every day.




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