Don’t Spend Money You Haven’t Earned

It is that time of year again, when we gather with friends and family around a large feast and discuss why we are thankful. While you take this much needed time for reflection, know that there is a well-developed plot against you that is about to unfold. It is what many Americans have come to know as Black Friday. Black Friday is the day after Thanksgiving that marks what some say is the official start of the holiday shopping seasoning. The term “black” refers to retailers making a profit or “being in the black”.  The day was designed to separate you from your money.

Studies have shown that Black Friday is one of the busiest shopping days of the year. According to the National Retail Federation,  in 2013 consumers spent $57.4 billion dollars during the Black Friday weekend. What makes Black Friday so different from the other 364 days of the year? The lure of rock bottom prices, steals and deals that retailers claim you will only see on this one day. People line up and camp out at stores, hours even days before the Friday store opening, to ensure their chances to purchase that “must-have”.

I am not sure if this is capitalism at its best or at its worst. I don’t think I need to say (but I will), that $57.4 billion dollars is a heck of a lot of money. I wonder how much of that was actual money that consumers had versus credit they used. I know it is easy to be lured in and to think that you are actually saving money with Black Friday deals, however it is only a deal if you have the money to make the purchase.

Get out of the habit of spending money that you have yet to earn. That is exactly what is happening when you use credit cards with the intention of paying them off at a later date. After paying the interest that accrued, I guarantee you that the purchase wasn’t much of a bargain when it is all said and done.

I say this from experience because I would shop on Black Friday religiously, and used my credit cards without hesitation. I would swipe my cards without any immediate consequences and rave about the money I “saved”. Once I received the credit card bills, reality set in. I, like many other credit card holders, didn’t have the money to pay off my balances. I then struggled to figure out how to pay these new bills with my existing expenses.

As the saying goes, “When you know better, you do better”. I no longer make this common financial mistake.

Going into debt to get more “stuff” simply isn’t worth it. Being able to sleep at night without financial worries, is far more valuable than the last electronic or a new pair of jeans.

Remember, if it is not in your budget, you can’t afford it.

Happy Holidays and remember to be financially responsible!

Money Saving Tips

We all know there are a million and one ways to spend money. There are many ways to save money as well. It takes a little more effort to save but I have tips that can help. You will feel great once you begin to reduce the costs of things you purchase.

  1. Use Coupons!!!!

I must admit that one of my favorite things to do is use coupons. If I can’t use a coupon to purchase something, I don’t really want to buy it. I use coupons for groceries, dog food, clothes, shoes, eating out, movies, books and even appliances. I have the Sunday edition of the newspaper delivered to my house solely for the purpose of getting the coupons. The money that I save far outweighs the cost of the subscription. I also use coupons that are delivered in the mail. For the past few years I have been able to purchase a coupon book called “Kid Stuff”. Many schools sell this coupon book for $25 as a way to raise money. The book has coupons for clothes, groceries, shoes, restaurants and movies. The possible savings makes this book a great investment.

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You may be saying to yourself, “I live a busy life, I don’t have time for cutting coupons”. I am telling you that you do. You only need about 15-20 minutes a week. Buy a coupon organizer and put your coupons in order so that they are easy to find while you are in the store. Keep your organizer in your purse or in your car so it is handy when you’re out and about.

Another great way to get coupons is by signing up for promotional e-mails. I know your e-mail box is already cluttered, but you can create an e-mail account specifically for receiving coupons and discounts. I get coupons for free meals from IHOP and Houlihans each year for my birthday and for my yearly membership anniversary. As a member of an e-mail club you can receive notices about exclusive sales and events. I signed up to be a part of PETCO’s rewards program and I receive e-mails when my dog’s food is on sale. As well as coupons for 10% and $5 off purchases.

2. Membership Cards

Many grocery and drug stores will offer discounts and sales on items if you sign up for a membership card. With the help of technology most stores can use your phone number to access your account information instead of having to scan an actual membership card. This past weekend I needed to buy some vitamins. They were $11.99 for a bottle at Target. I went to Walgreen’s where I have a membership card and I got the same vitamins and same quantity for $9.99. There was a sale for card members and I got a second bottle for free! I also went to the movies this weekend and used my membership card (as well as coupons from the Kid Stuff book), and received membership awards. It included a free movie ticket and small popcorn. Who doesn’t love getting something for free? Since going to the movies is one of my past times, being a reward member is saving me money on an entertainment expense.

3. Periodically Shop for Cheaper Rates on Services

Do not get lulled into paying the same rate every month for the services that you use. If you’ve been using a service for more than a year, check around to see if it is still a good deal. Call you cable provider to see if there are any discounts that you could take advantage of. Or, downgrade if you don’t truly need all of the channels included in your package. Call your insurance company to make sure all of the discounts available are being applied to your account, such as multi-policy discount or a good driver discount. Also if you live in a state where you can choose in energy suppliers check around to see who is offering the best plan for you. In PA you can review electricity suppliers at http://www.papowerswitch.com/.

4. Buy When There is a Sale

I know it may seem like I am stating the obvious, but I am not talking about impulse buying. Once you determine you have a need for something, wait for a possible sale. I have literally painted every room in my house. I noticed that Lowes and Home Depot periodically offer mail-in  rebates for $10 off a gallon of paint and $25 off of five gallons. As a result, I began to wait until there was a rebate offered on paint to make my purchases. I would save about 25% off the cost. Many retailers have a cycle for putting items on sale. For example after the 4th of July summer clothing begins to go on sale. If you stay  relatively the same size you can get good deals for this summer and future summers.

5. Don’t Buy Items Unless There is a Need

We have all seen an ad or walked into a store and discovered a sale that we thought was too good to pass up. A sale is only a good deal if is for items that you need and within your budget. If you have not budgeted for this purchase, don’t buy it. Retailers use psychology to make you believe their product is a “must have”. I have heard many people justify buying things they don’t really need by saying “It was on sale” or “I work hard, I deserved it!” What you really deserve is peace of mind. Knowing that you are financially stable will help you to sleep better at night.

Once you begin to use these tips they will become a part of your lifestyle. As always, I hope you find this information helpful and look out for my next post about increasing your savings!