Black Friday: Starting the Holidays Debt Free
Black Friday marks the start of the largest shopping season of the year. In 2023, Black Friday sales reached over $70 billion in global spend and Americans accumulated over $1,000 in average debt each over the holiday weekend. In the U.S. alone, online sales on Black Friday grew nearly 10% since 2022, reaching a total of over $16 billion in online spending through the weekend & including Cyber Monday.
According to Deloitte, Americans each spent nearly $570 between Black Friday and Cyber Monday shopping in 2023, and that around 50% of shoppers charge these expenses & add them to their credit card debt.
Here are five strategies to help you avoid accumulating debt during Black Friday:
Create a Budget Before Black Friday Begins
Before making a Black Friday shopping list, start by setting a realistic budget. Review how much you’ve saved for the holiday season and determine what you can comfortably spend. Create a spending plan for the entire season, looking at last year’s expenses to get an accurate idea of what you typically spend.
Be sure to account for potential expenses like: travel, gifts, food, parties, decorations, and wrapping supplies. Once you have a solid plan, list the people you’re shopping for, divide your gift budget, and stick to those limits for each person.
Leave the Credit Cards at Home
Once you’ve set your gift budget, head to the bank and withdraw cash. Having a cash budget makes it tougher to overspend because you’re limited to what you physically have on hand for Black Friday. This approach helps distinguish between your needs and wants, curbing impulse buying. Seeing the money leave your hands gives a clearer sense of how much you’re actually spending, which feels more tangible and difficult than simply swiping a card and receiving it back moments later.
Buy Fewer Gifts
The holiday season is about much more than exchanging gifts. Be mindful of your budget and only purchase what you can afford. It’s the thought that matters, not the price tag. Many people face similar financial challenges and may also scale back on gift-giving. Consider trying alternative gift exchange ideas with family or friends, rather than buying individual presents for everyone. This can ease the financial pressure while still making the Black Friday holiday feel special.
Secret Santa is a great option that’s both fun and budget-friendly. Write each person’s name on a slip of paper and have everyone draw one name from a hat. This way, each participant only buys one gift, allowing them to focus on getting something more meaningful without breaking the bank. Make sure to organize the name drawing ahead of Black Friday so everyone can take advantage of the deals. This approach ensures everyone receives a gift while keeping costs manageable.
Another alternative option is a White Elephant exchange. This exchange process is similar to a Secret Santa but with a few twists. Here’s how it works:
- Each participant brings a wrapped gift, usually within a set price range.
- Players draw numbers to determine the gift-picking order.
- Player 1 selects and unwraps a gift.
- Player 2 can either choose a new gift or “steal” Player 1’s gift. If stolen, Player 1 selects a new gift.
- The game continues until all gifts are unwrapped, with each gift only being stolen a set number of times.
Get Cash Back for Shopping
Sign up for apps and websites that give you cashback for shopping at participating stores. A few helpful apps to install before Black Friday are:
- Rakuten
- Ibotta
- Receipt Hog
You can use multiple apps to maximize rewards if more than one offers cashback on the same purchase. For example, Rakuten gives a $10 bonus for new users and offers up to 40% cashback at over 2,500 retailers. Just remember to access the store through the app to ensure you get your cashback rewards.
Ibotta offers cashback for in-store and online purchases on items like groceries, clothing, and more. For in-store purchases, you add offers to your account, then submit a photo of your receipt. For online shopping, you must visit the retailer through the app to earn rewards.
Receipt Hog is simpler—you snap pictures of any receipt, but earnings accumulate slower. If you can only choose one app, Ibotta is recommended for its wide range of cashback opportunities across different categories.
Look For Ways to Cut Back
If you didn’t set aside holiday savings, it’s not too late to adjust your budget. Try cutting back on expenses for November and December to free up extra funds. Consider reevaluating expenses such as:
- your gym membership
- entertainment subscriptions & memberships
- travel costs, carpool
- brewing your own coffee at home
- reducing utility usage
- eating out less.
Making small lifestyle adjustments can help you find the budget that you want for Black Friday shopping.
Frequently Asked Questions: Black Friday Spending
How can I stick to a budget on Black Friday?
Set a firm spending limit and make a list of the items you need before Black Friday arrives. Use that list to prioritize your purchases and avoid impulse buying. Tracking your expenses and using cash instead of credit can also help you stay on track.
Are Black Friday deals really the best of the year?
While many stores offer substantial discounts on Black Friday, it’s important to compare prices beforehand. Some deals may not be as great as they seem, and certain products might have better discounts at other times, like Cyber Monday or post-holiday sales.
How do I avoid impulse buying during Black Friday?
Create a detailed shopping list and stick to it. Avoid browsing beyond what’s on your list and focus only on the items you need. It also helps to limit time spent in stores or online to avoid temptation.
What’s the best way to take advantage of Black Friday sales?
Research deals ahead of time by checking store ads and online promotions. Sign up for email alerts from your favorite retailers to be notified of early access deals and exclusive discounts. Using cashback apps and rewards programs can also help you save more.
Should I shop in-store or online for Black Friday?
It depends on your preference, but online shopping offers convenience and often similar deals as in-store, without the hassle of crowds. Many retailers now offer the same discounts online, and shopping early can help you avoid stock shortages.
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