A Guide to Staying Out of Debt This Black Friday
Black Friday is just around the corner, and for many it holds the allure of snapping up those festive bargains ahead of the game and making a large dent in your Christmas shopping. However, Christmas is also the prime time of year for getting in to debt with one in eight Britons spending too heavily last Christmas making for a distinctly un-festive New Year. So roll into the new year, knowing you didn’t let Black Friday herald the start of debts building up by following Creditfix’s top tips:
The biggest problem with Black Friday and debt is that it almost inevitably results in impulse buying – the enemy of a healthy bank balance. The only way to avoid this is to be strict with yourself and resist those urges to buy, buy, buy. The simplest way to do this is to have a plan for your Christmas spending and to stick to it.
Before you set foot in a shop on 23rd November, or before you open your favorite online shopping sites, you should know exactly who needs buying for and, importantly, your budget. Nothing should be spent without checking back to the budget. It may be a fabulous bargain that what was £50 is currently selling for £30, but if your budget was only ever £15 in the first place, you’ve come a cropper.
How to Spend
Credit Cards can seem like the best option. Get Christmas funded and over, and worry about the cost in the New Year. However, this is a sure-fire way to ramp up the debt quickly as the interest can get out of control. Whilst long-term you may be able to consider a Individual Voluntary Arrangement (IVA) if possible you want to avoid getting there in the first place.
Therefore if you’re doing your Christmas shopping physically in store then consider using a debit card only, and if online then make PayPal your friend. This way you can only spend what you’ve got.
Think Before You Spend
Before you even consider spending on Black Friday and in the run up to Christmas, make sure that your essential bills are covered first. Therefore, before even working out your festive budget, make sure you have accounted for and put money aside for the mortgage, council tax, utilities and other regular bills. Luxuries, like gifts and festive feasting, come second.
Don’t Be Misled
In the heat of the moment, with the pressure of a time-limited deal, it’s all too easy to get clicking-happy on the computer mouse, or like a supermarket sweeper in the shops. However, before buying a Black Friday ‘deal’ take the time to do a little homework. Is this really the best price you’ll get or are you just being lured in by flashy lights and a ticking countdown? Take the time to look at a few other places, especially online, and see what the usual retail price is.
Watch Out for Hidden Extras
This is particularly important for online Black Friday shoppers, but also applies for anyone paying by credit card. Firstly, once you add things like postage and packaging to your purchase, is it still such a bargain? Often you won’t see these charges until the final step of the checkout process, so make sure you’re prepared to back out right up until the end. Secondly, if you’re paying by credit card, the interest you’re ultimately going to have to pay may well remove any semblance of a ‘deal’ by the end point. Another reason to put the credit cards away for Christmas shopping.
Impulse buying, like that associated with Black Friday, can mean you don’t necessarily think things through in the same careful way you would with other purchases. For some items, such as large electronic goods like the new console your teen wants, this can spell trouble. Be sure you know the warranty system, and what’s involved before you buy. Additionally, make sure you understand the relevant returns policy should it turn out that Aunty Mabel was feeling generous and bought the same gift as you, but you didn’t know this until 25th December.
Commercialism takes us all in its grip in the run up to Christmas, and Black Friday is the rocket fuel. Think wisely and manage expectations. Children and teens often crave the latest toy or gadget only for it to become a dust magnet in the coming year. Think carefully what they will actually want and need, rather than what they believe they want due to the latest marketing campaign. Particularly take a little time to look at reviews on the big purchases and check if it will be money well-spent or whether this year’s must-have toy only scores 2 stars because it breaks within a fortnight or is too fragile for little hands. Amongst friends and work colleagues suggest a Secret Santa, or simply spending time together, moving away from the commercial free-fall.
Clear Out First
If you’ve ever spent the start of the New Year trying to wedge the dozens of gifts into the house then you’re not alone. Taking the time before Christmas to declutter and clear out some of the unused gadgets and toys makes perfect sense for staying out of debt this Black Friday. You’ll get a higher secondhand value if you can sell these items before Christmas than attempting to in the New Year. And, even better, you can use this income stream to fund this year’s purchases.
Step Away From the Computer and Shops
If, despite the above tips, you still don’t quite trust yourself not to be trigger-happy when it comes to Black Friday expenditure, and you’re concerned about staying out of debt this Black Friday, then simply step away. Don’t log on to your favourite online stores on 23rd November, or choose to meet a friend for a coffee at your home rather than in the town centre, and hopefully you can avoid the pitfalls altogether.
Don’t Forget You’re Still Spending Money
Even with deals and the mega enticing savings of Black Friday, you’re still spending money. A deal is only truly a deal if you can actually afford it.
If you need more information about the options available to you in dealing with your debt, you can always speak confidentially with one of our friendly advisors on 0808 2085 198.