Tuesday, November 24, 2009

Set a budget, stick to it

By Dan Danford

This Friday, hoards of shoppers will head out in the wee hours, still stuffed with turkey, to plough their way through the crowds towards bargains. There probably are some good bargains out there. But the problem with this day of shopping is the same as how many Americans treat everything else: they don't plan.

Your plan for Black Friday shopping - and holiday shopping in general - should include some common elements.

Decide what you want to spend overall. If you have a Christmas Club account, congratulations, you've planned and have your budget for shopping. To determine how much you can spend if you don't have that tool, look at what is in savings, how much extra you have in the budget and what big expenses you have coming up. If you're self-employed, make sure you've set aside money for taxes BEFORE you make this determination. Do not factor in any credit card spending, unless you're prepared to pay it off immediately.

Decide who you're going to buy for. Immediate family first, and then make your way down the list. Are there people you've always bought for out of habit who you really don't speak to that often? Maybe it's time to trim the list, or cut back on what you buy.

Divide the money you have available to you among the people you've got on your list. Spend more on your immediate family, if that's your custom.

Decide what you want to buy, and look around online. Can you buy what you want with the money you have allocated? Don't let anyone pressure you into buying somethinng that costs more than you can afford, whether it's a child or adult. It's a gift. Their job is to be grateful for getting it, not dictate what you buy.

Write all of this down. Take your list with you shopping. Treat it like a grocery list, and mark people off as you shop.

The problem with Black Friday is that people see sales that they believe are bargains and they decide to spend more than they've planned due to the bargains available. Don't buy your brother that $450 computer at Wal-Mart if you're only prepared to spend $300 on him, even if he does need it and it is a good deal. Make a plan. Stick to it. And avoid using credit as much as possible.

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