Prepare for a weekend of sales
Often, the holidays bring on additional spending whether you prepare a budget or not. When you have friends and family to purchase gifts for, it’s understandable that you want to get them nice gifts to show them how much you love and appreciate them. As the upcoming weekend features Black Friday and Cyber Monday sales, it’s a great time to get your holiday shopping done – but there are risks associated with shopping when these sales are going on. If you’re planning on making these purchases anyway, it’s a good way to save some money, but it can also be an issue when it comes to impulse purchases. Some of the “sales” that companies feature are not as good as they seem. There are some ways to manage risks associated with purchases made during this weekend of deals.
Avoiding risks: Impulse purchases. Be honest with yourself. Do you have the money right now for some shopping? If you’ve budgeted your Christmas money, it’s a good time to withdraw it from your savings and get the deals before they’re gone. However, if you are relying on end-of-the-year bonuses from work, or maybe you’re someone who uses Christmas money to buy other presents, buying presents this weekend might not be in your best interest. If you’re throwing these purchases on your Visa and have no idea of when you’ll able to pay it off, you may end up spending more on interest than you’re saving with the sales. Avoiding risk also means shopping around. When you see a deal at a certain store, make sure it’s a good deal by checking to see what other stores are offering. Avoid impulse purchases at all costs.
Tranfering risks: Insurance. When you buy a big ticket item such, as a laptop or a tablet, the sales person will often ask you to purchase insurance (such as Apple Care) on this product. However, when you purchase an item on your Visa, the item is already insured through your card. While it may not be the same insurance plan, this is an adequate way to transfer the risk associated with an issue with your new purchase, while still avoiding substantial upfront costs that may never be necessary. If you’re planning on making a big purchase like this, look into different insurance plans before you head to the store or hit the checkout button online. You can also transfer risk by choosing to ask whomever gets your gifts for some of the items you see and want for yourself. If you see something for a really good price, tell the person who is getting you a gift, and hopefully they can take advantage of that deal.
Mitigating Risks: Overspending. Associated risks this weekend can include a lot of things. Overspending can be a main issue for everyone, including students. Often when we see a good deal, it seems like a hard thing to pass up. The thing to keep in mind is whether or not you would have made this purchase if it wasn’t a deal. If you’re buying a product just because it’s on sale and you’ve kind of wanted it, you’re not doing yourself any favours. Consider making a list of Christmas gifts or personal splurges before you check out Black Friday and Cyber Monday deals. This will give you an outline of what you can allow yourself to buy, and what you can view as a frivolous expenditure.
Accepting Risks: You’re going to buy it anyways. In no way is this advisable, but the reality of the situation is that you may end up putting something on your credit card that you’re not going to pay off right away, regardless of my advice above. You might see a PS4 for a great deal, or maybe a Michael Kors purse at a price you just can’t ignore. You might put it on your credit card and hope someone gives you money for Christmas, or that you can pick up some extra hours at work to pay it off. Just keep in mind that you do want to pay off that credit card. Try to cut down on entertainment or other expenses for a while, so that you can balance out the costs.
We all splurge sometimes, but it’s important to take the necessary steps to manage the risk associated with your spending. It’s just another way you can perfect being perpetually poor.