Preparing for Black Friday via BlackFriday.GottaDeal.com
I have to admit, for the past few years I’ve been venturing out on Black Friday to check out the sales. This all started a number of years back when we lived in Tucson. I discovered ACE Hardware’s BF sales one year and was amazed at all the really inexpensive stuff I could get there. I was hooked and I’ve been back to ACE most every year since. I can usually at least pick up some useful tools for basically nothing after the mail-in rebate. I was quite disappointed last year, however, because I think the sales were exactly the same as those from the year before. (I’ve got my eyes on you this year, ACE Hardware!). Since I know there are a lot of people out there who do serious shopping on Black Friday, I thought I’d share a tool I’ve been using to make planning for BF a little less hectic.
What is Black Friday?
Black Friday, which has been raised almost to the level of a holiday in the US, is that magical day where we as Americans exhibit rampant consumerism at its height. It got its name as the day of the year that retailers typically become profitable for the year (going from the red to the black in their accounting). There typically are great sales on certain items, but unfortunately some people take it a little too far (see my story a few paragraphs down) either by over-spending or pushing and shoving to grab the latest toy or hot item.
Getting a head start
There are a number of websites that "leak" the ads before their official release during the week of Thanksgiving. I usually check out BlackFriday.GottaDeal.com . Of course, they have the ads up there but they have some other nice features as well. I like that for most of the items they usually have links that take you to the retailer’s site to get more details on them. Another very useful feature is the forums they host on the site. There are usually some discussions going on about different items and techniques and various rumors floating around. I have subscribed to their email list and they usually send an email when they post a new ad - so they’re not flooding me with emails. I’m sure there are other valuable sites as well (for instance, Prime Time Money recently did a post on blackfriday.info ). It’s just that I found GottaDeal’s BF site a few years back and have been using it since.
Getting carried away….
Ahhh, I remember the year I first discovered the black friday site at gottadeal.com. I was living in North Carolina at the time and, for whatever reason, I became obsessed with Black Friday that year. Frankly, it was quite unhealthy. I ended up spending hours pouring over the ads and making lists of exactly what I’d go looking for. Of course, I ended up spending quite a bit of money. Sure, the stuff was on sale but let’s get real: buying things is still spending money, not saving it.
We had friends visiting for Thanksgiving and I ended up dragging the husband out very early Friday AM for an entire morning of shopping. We hit Best Buy, Circuit City, Panera (needed a little break and some munchies), Radio Shack, Sears, Costco, and ACE (of course). This is the list of stuff that I bought that day:
- TV (ok, bought that a few days before but it still counts)
- Surround Sound system
- DVD Recorder (at Radio Shack which I later returned)
- Roomba (robotic vacuum cleaner)
- Computer Software (free after rebate)
- DVD Recorder (liked this one better)
- Blank DVDs and CDs
- Miscellaneous tools (of course)
Proceed carefully!
I have reformed my ways since that year. I still usually go out on Black Friday…still usually by myself…but not usually until a little later in the morning. Now, however, I am more cautious about my spending. Last year, for instance, I bought some Christmas presents that were on my list and was able to get better quality items as a result. I feel that is really the best way to approach BF.
If you are going to venture out, don’t just buy items for the sake of "saving money." Be prepared, have a list of what you need to get as Christmas presents or whatever, find those things on sale, and stick to your list! Since there are so many sales going on during BF and the crowds are quite large, I definitely feel it is helpful to plan ahead via the ads or a "pre-release" site like gottadeal.com. But take caution - it is very easy to get carried away as I did a few years back and start the Christmas season a lot poorer than you ended Thanksgiving!
So what about you?
Does anyone else out there shop on Black Friday? Or do you stay away from all the stores and blatant consumerism that day? If you do shop it, have you ever camped out the night before to snatch one of the big deals? (I have never done that). Do you have any interesting BF stories?
A Look in the Mirror: Are You a Borrower, a Consumer, or a Keeper
I am (slowly) working through my Personal Finance Basics , going into more details on each step. It is time for the discussion on #3: Spend less than you earn . I’m going to focus over the next few days on some techniques for budgeting (I’ve tried a bunch over the years). Today I want to step back and take a broad look at the topic. I think the importance of this aspect of your financial plan is illustrated well in the excellent book, The Bogleheads’ Guide to Investing 
The Borrowers
The Borrowers are living the high life. They have the best of everything - expensive cars, high-end clothing, a huge McMansion, and so on. They have numerous credit cards and they are not afraid to use them. When the balances on the cards become too high, its time for a cash-out refinance or home equity loan to clear the credit cards and start all over. Leased cars, no money down interest-only adjustable rate mortgages, and minimum monthly payments typify the Borrowers as they lead their life of luxury.
The only problem is that they are nowhere near able to afford their lifestyle. Forget about retirement, they will be working until the day they die. They are a job loss or a prolonged illness away from losing everything to the bank and their numerous creditors. In Texas, the term for this is "big hat, no cattle." (I find it strange that I’ve read a few different personal finance books that use that term)
The Consumers
The Consumers, in contrast to the Borrowers, do not live life restricted only by the limit of their credit cards. Instead, they live life restricted only by their take home pay. The question they ask themselves when investigating a major purchase is, "Can we afford the monthly payments?" Interest rates and the length of the loan do not matter, if they can wedge the affordable payments into their monthly budget, then what’s the big deal?
Again, this is an unsustainable lifestyle in the long-term. If their take home pay drops for whatever reason, the low monthly payments quickly become huge. Retirement will not be the dream of a huge RV, traveling the country, and golf courses. Instead, it will be a very restricted one governed by the check received from the government each month (assuming that is still going on by the time they are no longer able to work).
The Keepers
The authors contrast the first two lifestyles with the Keepers. The Keepers live according to a net worth mindset as opposed to the credit card mentality or paycheck mentality. They are concerned more with their net worth than their net income. The first thing they do with their money each month is to save some. They avoid debt as much as possible (certainly no high credit card rates as they pay off the balance each month) and participate in tax-advantaged retirement accounts.
While they make no more money than the Borrowers or the Consumers, they are much more likely to achieve their long-term financial goals (partly because they actually have long-term financial goals other than buying the latest and greatest stuff). While this lifestyle may not sound as exciting as the first two, it certainly sounds a lot less stressful to me. Plus, I like the idea of being able to stop working 40+ hours a week to devote my energies to other pursuits at some point before I die.
There are numerous other lifestyles
Of course, these are three very broad generalizations. In real life, there would be more lifestyles too numerous to detail. I think that we all know people that fall into these three categories though. Obviously, the book portrays the Keepers as the best lifestyle (the chapter in which this is found is called "Choose a Sound Financial Lifestyle" after all) and I would guess most of us (at least those reading personal finance blogs) would tend to want to live as the Keepers do.
So which type are you?
I do think my lifestyle matches up most with the Keepers. I track my net worth monthly (oh, time to do another update in a few days). We do use credit cards but pay them off each month. I don’t care anything about monthly payments - when I buy a car I negotiate on the price, not the payment. I should take more advantage of tax deferred investing options, however, as neither my wife nor I max-out our 401ks.
Some people, however, would certainly say that we are not living life to the fullest. They would claim that we should spend more of our money to enjoy today instead of worrying so much about saving for tomorrow. That is probably a valid point to some extent, but for me, I think the stress of not feeling like I was being a good steward of my financial blessings would outweigh any short-term benefit. Though I probably do lean too far towards the "hoarding" side of things and that is something I’m working on.
Well, what do you think? Do you even agree that the Keepers are the lifestyle to emulate? If you do, do you hit the mark?
photo credits: David Boyle in DC and donandcarol
Is Striving for Wealth a Valid Pursuit?
A reader named Tom posted a comment recently on The Millionaire Next Door review:
One other area that bothered me a little about the book…they never addressed WHAT all those millionaire wanted to do with all that money or WHY they tried to accumulate so much wealth… Of course, you could be a millionaire to buy more stuff, but is that really what motivates us? I just wish they had asked each millionaire they interviewed one more question…WHY they wanted to be wealthy?
This raised a number of questions, such as
- Do I think wealth is a worthwhile goal and, if so, why?
- Is it "ok" to become wealthy?
- What does the Bible say about attempting to build wealth?
Click here to continue reading…
Personal Finance Basics Part 2 – Enhancing Your Basic Plan
In this series, I’m discussing the main ingredients of a personal financial plan – this will be a high level introduction to the topics that most people should consider when they first get started thinking about personal finances. This is the second post in the series.
The previous post discussed the very basic necessities for a financial plan. Today I am discussing the next steps to consider. To review, here are the basics:
- Earn some money
- Give some of it away
- Spend less than you earn
- Protect yourself
- Create an Emergency Fund
After taking care of the first 5 steps, I would recommend the following:
Click here to continue reading…
This Week in the Blogosphere: Mini-Vacation Edition
We are off to a long weekend! We are traveling up to PA to visit friends and families and spend some time relaxing and having fun. We might be riding some roller coasters, too, but it’s more likely that we’ll be watching the kids not ride roller coasters.
This has been another hectic week. I spent a lot of time tweaking the blog and, of course, writing. Unfortunately, I still have a long list of items to add or upgrade. If you have any suggestions for plug-ins or widgets or processes, please let me know. The help I’ve gotten so far on this journey has been invaluable and it is much appreciated. Enough about me…here’s some weekend reading: Click here to continue reading…
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