Staying out of debt on Black Friday and Cyber Monday. - Carrington Dean stars-five-icons

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22.11.2018

Staying out of debt on Black Friday and Cyber Monday.

They’ve always been smart: the marketers, the advertisers, the manufacturers and the sellers of all things beautiful, knowing just how to eke more money out of us than we really want to spend, but they’ve stepped up their game in the UK over the past 10 years by introducing a handful of seemingly new irresistible hooks dictating new periods of when we should be digging out our credit cards and hitting the stores.

Black Friday has been around in the US since the 1940s. The day after Thanksgiving was renowned as the kick-off to the Christmas shopping season with knockdown prices to get things off to a flying start.

In the UK however, it wasn’t until much more recently that US retail giant Amazon introduced the concept to British shoppers less than 10 years ago; and when Asda (who are owned by Walmart coincidentally—another US giant in the retail sector) followed suit in 2013 every other retailer in the country saw this as a bandwagon too good not to jump on.

Black Friday spending is going up, up, up…

The figures have shown that those crafty retailers were absolutely right to jump aboard and knock those prices down. Spending has risen significantly each year over the Black Friday/Cyber Monday weekend, just as the amount we spend at Christmas has. It seems we really can’t resist a bargain—and how could we when times are getting tougher for so many in our day-to-day lives?

Woah—it’s time to put those brakes on!

At the same time as retail spending is building up steam on these irresistible shopping occasions, we’ve seen that the average household debt amount in the UK is rising, in fact, it’s worse than at any time on record with UK households spending on average £900 a year more than they earn and the consumer credit bubble for the UK rose to over £200bn last year.

It’s no surprise then that more and more consumers are getting into debt trouble they can’t handle. This not only affects their financial health but the rollover problems into their personal and family lives and mental health are causing real problems for many more than ever before.

So how should you curb your spending enthusiasm?

Most of our out of control spending is based around not being able to resist a) a bargain, and b) the lure of some good old-fashioned retail therapy. To avoid falling prey to these demons you need a plan. This is where it starts.

1. Know just what you need and create a proper budget

Avoiding those impulse purchases is key to staying on budget. The popular phrase “I never planned to spend that much but I just couldn’t resist…” has to go.

Make a list of everyone you need to buy for, the treats for yourself (of course—you deserve something for all your hard work!) and exactly how much you can afford to spend on each of them.

The more detailed your plan, the more likely you are to stay within your spending goalposts.

Remember: a budget is king. Don’t stray from it or you’ll be heading into the debt zone.

2. Don’t spend what you don’t have

One of your key nemeses is the credit card. It’s oh so easy to decide to put it all on the plastic and worry about it later but that’s opening up a bottomless pit of future money worries to fall into that could be incredibly hard to climb out of.

Leave the plastic at home and take only the cash you can afford to spend. Make the same ruling online: use your debit card or a PayPal account where you can only access the money you have and not the money you don’t.

3. Bills first—luxuries later

Don’t run the risk of spending what you don’t have by making sure you’ve covered all your living expenses first. From Black Friday through to the January Sales—that’s over a month of spending temptation, so make sure you’ve planned for it by paying all the important bills upfront or moving some money into another account so you’re never caught short. Don’t get sucked in by those emergency payday loans—they’re the kind of trouble which could tip you into a debt spiral simply because you didn’t plan for the season properly.

4. Don’t be fooled by the trickery of marketing

Just because the retailers tell you it’s a deal that can’t be beaten never take their word for it. Google shopping and other retail comparison sites will save you hundreds of pounds I guarantee. There’s always a better deal it just takes a few more clicks to find it.

Do your research. The money you save could well pay for those Gucci shoes you always wanted…

5. Don’t get too blindsided by online prices

I’m going to say it: every single one of us who have engaged in online shopping has had at least one of those “how much?!” moments when we’ve finally filled our electronic cart and headed to the checkout. We thought we’d found the bargains of the century until we got the breath knocked out of us seeing what we were going to be charged in having them all delivered.

Be prepared to jump ship at any stage of the process. The price of the product is the total cost of getting it to your door—not just what it says in the big red flashing banner that lures you in.

6. If you can’t afford to go shopping, don’t go shopping

This is the simplest step we can all take. If you’re already struggling with your finances it makes sense not to tip yourself over the limit. Wouldn’t you rather cut back on what you spend at Christmas this year than lose your house in the next? It sounds a little extreme but we can often overlook the eventualities of where our overspending can end up. All it takes is one major impact on your income: a surprise redundancy; a medical emergency; unanticipated time off work; a major expense in your home or family situation—any one of these could be the single element that means you can’t afford to pay back that money borrowed when you could have avoided it remaining as financially healthy as you’d prefer.

So be careful with your spending, enjoy what you can afford to, you’ve earned it after all—that’s what it’s there for; but beware the pitfalls, nobody wants a debt laden unhappy New Year when all the dust has settled.

If you struggling with your finances in the run-up to Christmas, give one of our friendly advisers a call on 0141 326 0394 for expert advice.