Black Friday Puts You in the Red #illumedati 2


Hi guys, hope Thanksgiving went well for everyone. To be honest, I’m not really all that into the food, but I am all for the sentiment and the family time.

However, Thanksgiving is over and it’s now Black Friday, which tends to put many people into the Red. Since I’m in Hawaii, this post probably won’t have any relevance to those who crashed any doors this morning or last night. This post is more about Black Friday and the First Holiday Shopping Weekend.

black-friday

Stock Photo from: Pexels


Wait a second… how is Black Friday a Finance Fridays post?

To be honest, it’s really not. However, I think it’s worth talking about and I’m trying to put an educational finance spin on it.

Ok, first things first:

I don’t do Black Friday. I don’t do the First Holiday Shopping Weekend either. Mostly it’s because I don’t like crowds. However, I think the more important reason is that I think people tend to overbuy on Black Friday and the First Holiday Shopping Weekend. Another important reason is that I’m lazy and don’t like to spend a whole weekend walking around mall.

The truth is that these “great deals” are just to get you off the couch and into the stores. So you get to the store, and whether they have the particular item you were looking for or not in stock doesn’t even matter. They may take a small hit on that “doorbuster” item. However, you are now in the store surrounded by a lot of other stuff that you weren’t even considering. And that’s how they get you.

I would venture to say that on Black Friday, most people don’t come to the store with a plan of what to buy for each person on their list.

Maybe their list is somewhat generic:

Mom, Dad, Brother, Sister

Or perhaps even a little more specific:

Mom – clothes, Dad – watch, Brother, – PS4 game, Sister – Fitness Tracker

To be honest, this second list isn’t bad. However, it’s not good enough.

Your list needs to be as specific as possible. Something like:

Mom – Black Pantsuit from NY&Co

Dad – Seiko Men’s Watch, SNK809

Brother – Final Fantasy XV

Sister – Fitbit Charge 2


Why?

Remember what I said above? The whole point is to get you off your couch and in the mall instead of eating popcorn and watching A Christmas Story over and over. The stores want you to buy, buy, and buy some more. However, your priorities and theirs do not align.

Let’s take the first situation, with the generic list, of just people. So you go to the mall and wander around and somehow end up at Nordstrom’s or whatever. You find a purse your mom might like and lo and behold it’s 50% off. Now, is it really 50% off, or marked up 100% and marked down 50%? That’s a story for another day. Maybe you even take the time to check your phone to see what this particular purse is going for at other stores. Either way, you decide it’s a decent deal and pick it up. Shopping for mom should be done right?

Wrong.

You’re still at the mall, looking for gifts for everyone else. So now you wander over to Macy’s and there is a pantsuit your Mom would just love. And, of course, it’s also on sale. So now what? Do you buy the pantsuit or the purse? Remember, you already bought the purse. So maybe you just buy the pantsuit too. I mean, she’ll love it. You can always return the purse later, right?


But did you return the purse?

Or did you get caught up in the spirit of giving and rationalize to yourself that it’s ok to spend a little extra this year. I mean, it’s your mom, she loved and raised you and deserves it… right?

Yes, she deserves all your love and to be happy but…

It’s just a purse. Or it’s just a pantsuit. Or it’s just [[[whatever]]]. I’m sure Mom would much rather you spend some more time with her during the Holidays rather than see you go into debt from overspending on her.


Now let’s examine the other, very specific scenario:

Mom – Black pantsuit from NY&Co

Let’s say your Mom really likes NY&Co, so pretty much buying anything from there is a slam dunk for a great present. She had great black pantsuit from there, but it’s getting a little faded, and your son, Johnnie spit up on it 3-4 times. Time for a new one.

So you head to the mall and walk by Macy’s, Nordstorm’s, etc, straight into NY&Co. You buy that new pantsuit that she needed, in her size and you’re done.

Wait… but we’re not done, we’re still at the mall!

You’re right. However, you’ve bought the exact item you wanted to buy. The chances of finding an item better than the one you have already researched and decided on buying prior to coming to the mall is pretty low. Just for completeness’s sake, let’s say you walk into Nordstrom’s for some other reason. There is a black pantsuit there too and it’s pretty fancy. However, you already a black pantsuit from a store you know your mom likes… in order to consider buying this Nordstrom pantsuit, it would have to be 2x better (to you) than the one currently in your bag.

That’s the difference.


So what should you watch out for this Holiday Season?

Insecurity

I think that people tend to overspend when they are unsure about whether the gift we buy for someone will be “good enough”. Like in my first example, we bought Mom and a purse and pantsuit because they both only “ok”. However, in the second example, we only bought one pantsuit, but we knew it was what she wanted, so there was no need for another gift.

No one wants to buy gifts and have people return them. So then we overspend to try to compensate for this insecurity.

The Fake Deal

More so than that, we believe it’s ok to overspend as long as it was a “deal”. If you buy 2 “ok” items that were originally $100, but are now both 50% off… which is a deal, you spent $100. However, maybe you could have just bought one “great” item for $75. So then… which one was the deal?

Overspending

The Holiday Spirit is giving, which is great. However, this should not be an excuse to overspend. I think people tend to rationalize overspending during the holidays because it’s “only once a year”. It’s also money you aren’t spending on yourself, but on others, so you don’t feel guilty about it.

However, it’s still money, and if you overspend, it could still place you in difficult situation financially. Stick to your budget.


Ok, well what do you do?

Like I said before, I’m lazy and I don’t do Black Friday or First Holiday Shopping Weekend. Today, I’ll probably run a few errands and take the kids out for some shave ice.

In regards to shopping, I don’t buy things unless I have researched them. My wife can attest to this. Before I buy any product I usually research it, its competitors and even anything similar that may come out in the next 6 months. When I buy something I want it to get good use.

Even with all this research, you can’t account for everything. For example, my daughter is heavily into Ninja Turtles and Shimmer and Shine right now… two very different things. The Ninja Turtle Complete Collection was a huge hit with her. So I figured she would love a Shimmer and Shine dolls would be great too, right?

I was wrong.

She could take or leave the dolls. It’s not that she doesn’t like them, they’re just not “a hit”.

    


A kind of surprise hit with both of my kids (Daughter – 3 y/o and Son – 1 y/o) was:

The Amazon Echo Dot Second Generation

I wrote about buying it in a prior post, but now it’s on sale for even cheaper! ($39.99) That’s what I get for pre-ordering… sigh.

Basically, my kids love it. My daughter tries to talk to Alexa and my son knows wheres Alexa is and points to it when he wants music. Alexa has been playing music near continuously at our house since we bought it.

However, I think if you want to get the full value out of it, you need both Amazon Prime membership and Amazon Unlimited Music ($4.99/month if only using Alexa). If you don’t have Prime and/or don’t want to spend $4.99/month, then don’t buy it.

Also, the Anker SoundCore speaker I bought to use with the Amazon Echo Dot deserves a quick review too:

This little speaker is small but it delivers pretty good quality sound and provides enough volume/bass to fill my living room/dining room. It’s a #1 Seller for good reason and I’d recommend it for use with The Amazon Echo Dot. However, if you’re a true audiophile, it won’t be near enough for you. But if you’re a true audiophile, you wouldn’t need me to tell you that. No $40 speaker would be good enough for you.

For those who want the classic Echo, with speaker built in, click the middle picture below: (it’s on sale too, for $139.99)

    


TL;DR

Don’t get too caught up in Holiday Shopping.

Research and make a very specific list before you venture out.

Be aware of Insecurity, The Fake Deal, and Overspending.

Amazon Echo Dot dropped in price… remind me not to pre-order anymore.

-Sensei

Agree? Disagree? Questions, Comments and Suggestions are welcome.

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