This week we celebrate Black Friday, the unofficial start of the holiday season following the famous US Thanksgiving Day.
This day is often perceived as the busiest shopping day of the year with almost all stores, not only in the US but all over the world, coming out with enormous sales and ‘early bird’ special offerings – everything to attract consumers. As a result, people are massively heading to high street stores and online brands in an attempt to find the best deals. Some of them even stand in line hours before the stores are open to grab the bargains of the year 😲 😲 😲.
Discounts are not a bad thing, in fact, Black Friday discounts often allow people to save a lot of money on buying necessary goods. For retail, it’s one of the most profitable days of the year, signalling that retail is not in the ‘red’ on their balance sheet (which signifies losses) but in the ‘black’ (signalling a profit from an accounting perspective).
While retail may be ‘in the black’, let’s not forget how Black Friday got its name…
Police, yes, the authorities, originally coined the phrase ‘Black Friday’ to describe the mayhem on this day. The volume of shoppers often created traffic accidents and sometimes even violence - I guess some people are very ‘passionate’ about those savings.
Black Friday is all about consumerism and consumerism largely supports economic growth, but the ‘black’ day of the week is usually associated with some of the worst stock market crashes in history. Like Black Monday in October 1987 where the Dow Jones Industrial Average fell by 23% - the largest percentage drop in one day in stock market history. Or Black Thursday, in October 1929 that signalled the start of the Great Depression.
‘Black’ days, like Black Friday, should remind us of financial loss and not just about spending. People often treat Black Friday as an excellent excuse to spend their money on products they don’t really need, just because they’re discounted. And to me, this is the fastest way to lose money!
So, let’s use this year’s Black Friday celebration to share with you some Black Friday Savings Tips:
Focus on what money can’t buy - although it might sound cliché, it is true: having savings gives you something money can’t buy, the feeling of financial freedom & safety, not only now, but also in the future. Life is full of twists and turns that might lead to unexpected expenses i.e. medical emergencies, job losses, major home or car repairs or unplanned travels – they all might be serious budget breakers for those who don’t save, leading them directly towards a financial catastrophe.
Don’t follow the crowd - just because your friends are buying it, doesn’t mean you need to. Friends that go broke together, don’t stay together ;) Saving is the best way to prepare yourself for an unforeseen future. It gives you the power of control – a tool to face the most difficult situations you might encounter on your way. Do you prefer to wastefully spend your money on small everyday things (coffee in the city, new jumper you’ll throw away next winter or another pair of black high heels) or would you rather save it for the things that really matter to you?
Make money work for you – although it may seem quite obvious, many people forget that saving is a critical component of investing. The truth is, in order to start investing and making your money work for you, you first need to save so you can invest in assets that typically grow in value. So, if you want to grow your wealth, start with establishing a regular savings plan. As Warren Buffett, one of the greatest investors of all time, once said: “do not save what is left after spending; instead spend what is left after saving”.
Black Friday is a great tradition for welcoming the Christmas shopping season - it really is an incredible and exciting festival of consumerism. So, in the spirit of consumerism, let’s take advantage of those discounts for the purpose of growing our wealth, and not spending it. ;)
Happy Black Friday everyone! Let’s go shopping!
Please know, the value of investments can go up as well as down and you may receive back less than your original investment, meaning, when investing your capital is at risk.
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