Don’t let Black Friday debt spark the post-holiday blues


The Black Friday sale is a temptation you’ll likely fight over the holidays. But these seasonal treats are all about the money, not the calories.

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If you’re determined not to take on too much debt, here are a few ways to avoid slackening the belt on your budget.

Prioritize needs

One idea is to plan your spending. Not easy.

“Prioritize needs but make room for certain wants; it’s all about balance, ”said Sabrina Maria LaFleur, certified financial planner in Atlanta, in an email. LaFleur is with LearnLux, a financial planning benefits provider.

Vacation spending can make a big dent in any bank account, she added. It’s a long list: home decorations, holiday celebrations, and travel expenses – and there are gift exchanges with family, friends, and groups.

“I know people love to spend money on gifts and other festivities during the holiday season,” Toby Mathis said via email. Mathis is a tax lawyer and founding partner of the Anderson Law Group in Las Vegas. “It’s never too late to budget for expenses, and it’s never too early to start shopping.

It’s financially much easier to spread spending over weeks or months rather than cramming it all into a few days after Thanksgiving, he added.

Make a budget and a list

How about setting aside some “crazy money” for vacation spending?

“Money is already ‘crazy’ this time of year,” said LaFleur. “A treat here and a treat there can quickly add up to an astonishing total, so pick one special thing for yourself to help deal with the impulsive behavior.”

And that “something special” should be in your budget, she added.

Mathis recommends that his clients live on 70% of their take-home pay. The remaining 30% is divided between donations, investments and debt repayment.

“Depending on your situation, you can either budget your vacation expenses within 70% of regular monthly expenses, or, assuming you don’t have any other debt, use the 10% allocated to debt for gifts. What you should avoid during the holiday season is the temptation to buy a bunch of gifts on credit without a clear plan to pay off the debt, ”added Mathis.

Matthew McIntyre, investment advisor and founder of Peak American Financial Group in Plano, Texas, suggests keeping a vacation spending journal.

“An Excel spreadsheet or just an old-fashioned pen and paper are good ways to track and deduct expenses from your budget,” he said in an email. A running log could be as simple as this:

Total donation budget: $ 600
Item: Uncle Mike’s cap: -30 $
Remaining budget: $ 570

McIntyre also suggests buying a few small gifts to get started. “Then, as you move towards the larger items, you’ll have a good idea of ​​where you are at and be less likely to add unnecessary ‘last minute’ giveaways, allowing you to stick to your spending plan. “

“Not everything will be on sale”

It’s easy to get carried away by the Black Friday frenzy, especially since the event that took place just a few years ago from Thanksgiving to Cyber ​​Monday has now grown into a “sale of one.” month “.

“Don’t believe the hype; not everything will be on sale, ”said LaFleur. “There’s no need to rush to spend your money just because it’s Black Friday. Make sure you’re getting a good deal before you get emotionally motivated to join the shopping frenzy.

Mathis believes supply chain issues, inflation, and consumer fear of losing a hot holiday item are likely to drive up prices this holiday season.

“I still remember the Cabbage Patch Kid madness in 1983 where a $ 25 doll would be sold by opportunists for $ 150,” he said. not spend on gifts. “

Credit cards can have a place in the plan

Experts also offered some tips on using credit cards when shopping for the holidays.

“I’m not a big fan of debt, but I’m a big fan of points,” Mathis said. “If you’re disciplined enough, I think credit cards are fine for purchases as long as you can pay them off in the checkout cycle to avoid charges.”

LaFleur believes credit cards can also be great for holiday shopping because of the remedies you have if you have issues with vendors, retailers, or identity theft.

But credit cards can make it easy for you to lose track of your spending – if you don’t keep a list of current purchases as suggested above – so use them sparingly. LaFleur noted that a balance of 30% or more of your total credit limit could negatively impact your credit score.

Plan for next year

If it’s too late to have a spending plan for this year, what are these experts suggesting people do to prepare for vacation spending in the upcoming holiday season and beyond?

“The holidays are actually a great time to plan for your future. If you don’t have a shopping budget for this year, give yourself a financial plan, ”said LaFleur.

Imagine a few plans for next year’s holiday season, estimate the cost and savings target, and look for ways to save more money as part of your regular spending habits. Then, LaFleur proposes to set up an automatic monthly transfer to a dedicated savings account to achieve this goal.

“Even if you don’t reach your savings goal, having something savings next year is better than nothing, and having a plan is the best way to get there,” said LaFleur.

She added that having a budget plan also increases the likelihood that you can consistently cover your regular expenses with your regular income.

The Don’t Let Black Friday Debt Trigger Post-Holiday Blues article originally appeared on NerdWallet.


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