Surviving Black Friday

Black Friday has got to be the only day of the year I actually love to shop. I get a thrill from getting great deals and getting done with all my Christmas shopping in one day. What adds to my excitement is seeing how fast I can get in and out of a store. I typically try to go to just 3 stores, Lowes, Michaels, and Walmart. Lowes has the best deals for gifts for The Doctor. Michaels is of course for me. Then walmart I price match all the deals at the other stores plus take advantage of their deals. Here is how I survive Black Friday.

Thanksgiving day I lay out all the ads. I place the ones advertising items on my list in one pile and toss the others. Then I go through and see which store has the best prices on items. I will make a master list of the things I want, how much they are and at what store. When I go to Walmart I have all the ads with me and know which ad to price match for which item.

Once I know what I want I will coordinate with a buddy. Last year it was The Doctor and we had a blast. This year we will be with  more family so there will be more of us which should make things easier. We divide up who is responsible for getting which items and then we meet back at the front to check out.

I usually arrive to Walmart an hour before their sales begin. I grab a cart and place all the items I am price matching in the cart and then I stash the cart down some aisle, usually cosmetics or even bedding. I carry with me a big bag that I can carry on my shoulder. Trying to push a cart through the crowds on black Friday is insane so I just put my items in the bag. I can weave in and out of people much faster. As I am making my way through the store I seek out the "hot ticket" items on my list that are sure to go fast. I then station myself by the most wanted item but in a way I can grab and go to the next place as fast as possible. Meanwhile my partner is at the other side of the store doing the same thing.

While we usually have the cheap movies on our list we don't stress if we don't get them because they can be a time warp if we try and maneuver around the hoards of people digging through them. Typically we have everything we want with in 15 minutes and are checked out in another 15 minutes giving us plenty of time to get to the next stores before they open. The last 2 years I have been in and out of all my stores and home in 2 hours. This gives me plenty of time to stash the goods before the kids wake up.

Black Friday holds the excitement for me that Christmas morning did for me as a child. I get such a rush and I enjoy picking out all the gifts at most excellent prices. This year I may even get in on the cyber Monday action.

Giving Children an Allowance

Giving children and allowance has many benefits.

• Teaches money management skills. Don't just hand your children money. Make sure you teach them what it means to save. Teach them to pay a 10% tithe and to place 10-20% away for savings. Help your child determine a goal for their savings. For example, if there is a new video game they want explain to them how much money they need to get that game. Place a picture of it somewhere where they can be reminded that that is what they are saving for. Teaching these skills when they are young can help them avoid money problems as adults.
  
• Avoid having them ask you for money all the time. When your children have their own money to spend and they ask you for something from the store you can just remind them they have their own money.
  
• Teaches children the value of money. How often do your children see you handle actual money? I know mine only see me with credit cards and checks. Giving children cash helps them see that when it is gone it is gone.
  

So, when should you start giving an allowance, how much should you give, and how should you do it?

Most children learn about money at school when they are around 6 years old. At this age they can better understand the concepts associated with money management. But you can start teaching the concept of paying for goods as early as 3 years.

The amount to give varies from family to family. I have heard half of their age in dollars or a dollar per year of their age. Some families can afford more while others need to stick with less. Do what is best for your family. Older children may be responsible for buying their own personal toiletry items so make sure the allowance covers the cost of those items and leaves a little extra money for spending.

How often you give the allowance depends on the age of the child. Young children should be paid weekly while older children can be paid bi-weekly or monthly to teach long term budgeting.

I personally believe you should not tie allowances to chores, at least not the chores that need to be done just because your child is a part of the family. You shouldn't pay your child to clean up the toys they left out, make their bed, put clothes away, etc. It's better to remove a privilege if they fail to do those chores. But, make a list of extra chores they can do that pay like, raking the leaves, wiping the base boards, dusting the blinds, etc.

Remember, it is better to start an allowance when the child is younger than to do it when they are a teenager because you can solidify good financial habits early.

Distinguising Wants vs. Needs

It's the question I ask myself every time I go shopping. I pick up an item for purchase and then ask, "Do I need this item or do I just want this item". To help me answer I think through a couple of other questions.

Do I need this to live/survive?
Do I have something at home that can provide the same function?
Do I have to have it now or can it wait until later?
Why am I buying this item?
If replacing an item, can I fix the item I already have for cheaper than buying a new one?

I believe we all really know what our needs are but when there is a sale that is almost too good to be true it is sooooo hard to pass it up. I am guilty of compulsive buying when it comes to those good deals. So is my husband. Here is our most recent example. My husband has been wanting an air compressor for sometime now and every time he goes to a home improvement store he checks the prices to see if by some chance there is one we can afford. I don't know exactly why we "need" one but apparently we can sure use one around the house. Well, last week he was at a store and checked the prices and low and behold, one was on sale for 50% off the original price. It turns out the store had it priced wrong but he got the advertised price anyway. It was our luck. Now, did we really have the money for this purchase? No, we did not but the price will never be that low ever (we got it below wholesale). So, because the sale was so good we ended up making a purchase I feel we didn't really need to make. However, I have a very happy and excited husband.

Usually by asking myself the above questions and giving honest answers I save myself some money. The point I'm trying to make is, if you don't "need" it don't buy it. And, if it is something you can't use immediately there is no need in buying it. See how you can save money by distinguishing wants vs. needs.

How do you distinguish your wants from needs?

Can You Really Afford That?

I love this story. There are many times when there is something I want to buy but I have to stop and ask myself if it is something that I can afford. I might be able to afford the item right then and there but something else will need to be sacrificed later on. I would love to go on a cruise but, if I spend my money on the things I want right now I won't have the money to save for that cruise I want to go on with my husband. I don't know where I heard this quote or who said it originally but I think it applies....

"Don't give up what you want most for what you want now."

Creating a Holiday Budget

The best part of holiday shopping is picking out gifts for everyone on your list. The worst part is when January comes along with the bills and you realize you over spent. One way to avoid the worst part is to create and stick to a holiday budget.

Step 1: Create a budget book. Add lined paper, dividers, and a zipper pocket (pens and pencil pouch) to a 3 ring binder. The paper is for taking notes and keeping track of things. The dividers are to separate lists or budget years. The zipper pocket is to hold all of your receipts.

Step 2: List Expenses. Make a list of each person you need to buy a gift for. This includes family, friends, teachers, and co-workers. Don't forget to make a list of other holiday expenses like: greeting cards, gift wrap, decorations, baking supplies for cookie trays etc.

Step 3: Set Limits. Evaluate what you spent last year or estimate what you spent last year and determine where you need to cut back and where you need a little more. Maybe you went way overboard with the cookie trays but needed a little more money for gifts. Make adjustments where necessary and then place an amount on everything. For example, $5 for teacher gifts, $10 per co-worker, $20 per extended family member, $50 for decorations. Maybe this year you can cut back on the number of cards you send out and send e-cards instead. Many people throw away the cards after the season anyway.

The most important thing is to do what is best for you. Don't compare your budget to someone else’s because everyone has different ideas and needs. Once you have your budget set make sure you keep track of everything you spend. You may go over on something but under on others. Make adjustments where necessary. Follow through with your budget to make sure there are no surprises come January.

Establishing Financial Rules

If you find you are always arguing with your partner over spent money then it is time you establish some financial rules. It varies from family to family but my husband and I have found two that work really well or us.

Purchase Amount Limit Without Consultation. This is the amount of money either one of you can spend without discussing the purchase with the other person first. You could create a daily, weekly, or monthly amount. This does not include necessities like groceries. Obviously, the smaller your overall budget is for your house, the smaller this number will be. We have a really small income to work with so ours is around $20. Anytime there is something that my husband or I want to buy that isn't a necessity and that costs $20 or more we run it past each other.

24-Hour Rule. For purchases requiring a significant amount of money we always wait 24-hours before we make the purchase. During this time we each take a side, one pro and one con (even if we are both for it), and we each lay out our side. We look at all the positives and negatives so we can make a more educated decision. This rule also applies well for any impulse purchases. If there is something you find that you just have to have, wait 24 hours to see if you still "need" it. Most of the time you don't. Beware: Sales people hate this rule, especially those working off commission. I had a telemarketer tell me how stupid a rule that was. It is actually a smart rule if you are trying to stay out of debt.

These are the 2 rules that work for us. You may have more or different versions of ours. The key is to find what works best for you.

Debt Reduction and Elimination

"There are only two types of people who deal in interest--those who
understand it and those who do not understand it. Those who understand it,
collect it. Those who do not understand it, pay it." -Deseret News 1/9//93

There are several kinds of debt but most fall into these categories: consumer debt, educational debt, vehicle debt, and home mortgage. In June of 2007 the total US consumer debt, not including mortgages, was 2.46 trillion dollars. If you are one of the many Americans in debt, the time is now to get out of debt and find financial freedom. One way to get out of debt is to contact a company who specializes in eliminating debt. However, expect to pay them some money for this service. This may be a great method if you are so over your head in debt that you don't know what else to do. I recommend getting out of debt on your own by following these steps.

First, perform a little "plastic surgery" and cut up your credit cards. You might wish to keep one for emergencies but make sure it is only used for that. I have a friend who placed her credit card in a bag of water and then placed it in the freezer to ensure it was used only for emergencies. Only spend money that falls into your budget parameters and pay with cash. If you can't pay cash then don't buy it.

Next make a list of all of your current debt and include information like; total amount due, minimum monthly payment, and the interest rate. Now call all of the companies and ask them if they can give you a lower interest rate. Most people qualify for a rate lower than what they are getting so you need to ask.

The last thing to do is create a debt elimination plan/chart. I've created a sample on you can view here. Here is how it works. List your debts starting from the smallest one first to the largest one. Every month pay at least the minimum amount due. Once you pay off your smallest debt, add that minimum payment to the 2nd smallest debt. Once the 2nd debt is paid off apply that payment towards the next debt and so on. It is a snowball effect. The sum you pay towards a single debt increases but the total amount you pay towards all your debt remains the same. By following this method you will get out of debt faster. Once all your debt is paid off you can then place the total monthly payments you were using to pay off debt into your savings account. If you need this clarified more please ask and I will explain it. Looking at the sample chart here will help out too.

If you currently do not have debt congratulations! Please share with us how your family stays out of debt.

Creating a Personal Budget

For some the word “budget” is a dirty word that evokes negative feelings. Those who understand budgeting know that it is a word that can equal financial freedom. So, if you don’t already have a personal budget, here is what you need to do.

Figure out what your entire monthly income is. Include paychecks, bonus, tips, and any interest you may make. From this figure out what your yearly income is. Now you know what you have to work with. Creating a budget is much more enjoyable if you have a goal in mind. Maybe you want to save money for a down payment on a house, or a family vacation, or maybe it is just to eliminate some debt. So, create a goal and think of it as you work through your budget.

Now you need to make a list of all of your fixed expenses, anything that gets paid monthly. These are things like rent/mortgage, car payment, church/charity contributions, medical insurance, dental insurance, garbage, gas, electricity, natural gas, phone, water, etc.

Make a list of all your occasional expenses. Occasional expenses are the things that come less frequently than monthly but are paid on a regular basis. Examples are: car insurance, car registration, home insurance, life insurance, magazines, property taxes, vehicle inspections, etc. Don’t forget to include money for b-day presents, vacations, and Christmas. Then there are those wonderful variable expenses: Car maintenance/repair, dry cleaning, Home repairs, school fees, pictures, prescriptions, stamps, tires, yard supplies, etc.

Once you have all of these things listed, create a practice budget. Write down how much you propose to spend on each item. At the end of the month record how much you actually spent and compare the two. Did you spend more or less in certain areas? Was it feasible? Adjust your budget accordingly and now you are ready to start saving for your goal.

You can view a budget worksheet here. You can also download budget templates of all kinds from here.