What’s your Black Friday budget, and how do you stick to it?
For Tracie Fobes at Penny Pinchin’ Mom, sticking to her $1,000 Black Friday Budget involves making a list, comparing deals and paying in cash.
She’s got tips to help us all stay within our Black Friday budgets and avoid debt this holiday season.
Make a Monthly Budget
“Our overall holiday budget this year is $1,000 for three kids, adopting a family and our family and friends,” Fobes explained.
Although $1,000 sounds like it could be an arbitrary number, Fobes chose it deliberately.
“In January of each year, we look at what we spent for the holidays and then budget to set aside an amount every single month so that we can pay for it in cash,” she explains.
“We always add about 10% to what we spent, to allow for increases in costs and additional people we may want to buy (something) for the next holiday season.”
We’ve recommended holiday budgeting before, so it’s nice to see someone successfully using this technique!
If you want to save $1,000 between January and November, you need to save around $91 a month.
Planning ahead and saving early helps Fobes understand exactly how much she has available to spend during Black Friday and Cyber Monday. Once she has the cash saved, she checks the deals, makes her shopping list and starts comparing prices.
Make a List and Check it Twice
Fobes uses a Black Friday shopping list to keep her shopping within her budget.
“It helps keep me on track so I know what I need to get and about how much I will spend,” Fobes explains. She also compares Black Friday deals before she begins shopping and while she’s in the store.
“I always check online prices for the things I need to see if I can find it less expensive elsewhere,” she says.
“Since no one will price match on Black Friday, I will actually sometimes place an order through another retailer, right in the aisle of a competitor’s store!”
Fobes tries to find Black Friday deals that are 40 to 50% off the original price. She prefers not to buy items that are not on her shopping list, but she does make exceptions.
“If I do see something that I know someone wants and it’s not on my list, but it is such an amazing deal I can’t pass it up, I will go ahead and get it,” Fobes explains.
“I make sure it’s something that we know we will need, not just a purchase only because of the price.”
However, Fobes’ $1,000 budget trumps all.
“If there are things that fall outside of my budget, I just pass,” she says. “The holidays are not a reason to go into debt.”
Pay in Cash
If you want to make sure you don’t go in debt this holiday season, there’s one foolproof way to do it: Pay in cash.
“If you use plastic, you can (and usually do) overspend,” Fobes told us. “Paying with cash has more emotion attached to it. When I have to hand over $200 in cash, it certainly hurts more than swiping a credit card for $300!”
Plus, when you pay in cash, you have a physical signal that you’re running out of money.
When the cash is gone, stop shopping — no matter what deal you’re passing up!
If you want to combine the “pay in cash” technique with online purchases, consider removing cash from your wallet as you make purchases online.
For example, if you go to a big-box store, use your smartphone to compare deals and decide to purchase online from another retailer, make the online purchase and then take the equivalent cash out of your wallet and put it in another part of your purse or jacket.
Later, you can put that cash back in the bank!
If you pay in cash — even online — you’ll be acutely aware of how much money you’re spending, and less likely to accidentally go into debt this Black Friday season.
Your Turn: How do you determine your Black Friday budget? Do you set aside money every month to help you get there?
Nicole Dieker is a freelance writer focusing on personal finance and personal stories. Her work has appeared in The Billfold, The Toast, The Write Life and Boing Boing.