Collectors of frequent flyer miles have to be careful not to make a very basic mistake. I wrote “This Game Is Not For You If…” about mistakes people make with mileage-earning credit cards.
- If you don’t pay off your bill in full each month, don’t pay attention to credit card rewards pay attention to your interest rate (and getting the card paid off as quickly as you can)
- And do not spend more money than you would otherwise spend because you’re using a credit card, or because you ‘need’ the spending to hit a bonus. On average people using credit cards do spend more than those using cash, though a number of factors influence that result.
The same thing is true chasing other mileage deals. You need to watch your costs. For instance American is offering up to 50,000 miles for flying combined with partner earning transactions but really anyone that isn’t buying goods online through shopping portals and selling those items at break-even or better isn’t going to make the offer work for them.
Black Friday is no different. You didn’t think Black Friday was for your benefit, did you? The idea is to get you to spend more money than you’d otherwise spend by offering deals at a time that’s become focal for customers.
You need to stay disciplined. Do not buy things simply because they are a ‘good deal’ relative to their usual price. You wouldn’t have paid that price anyway, so you aren’t saving money compared to that price if you make a purchase. You know how I know you wouldn’t have paid that price? The very fact that you didn’t buy it already.
There may be things you have in your purchase path already. Those are the things to consider buying on Black Friday.
- Know what you want to buy those are the things you buy, not shiny things you see along the way.
- Know what those things normally cost, so you can identify how deep a discount you’re getting. Don’t go through big effort for small discounts that you can get any time — more importantly if it’s a deal you can get later, why not wait? And that’s for reasons other than time value of money, you can always think more if you really needed it. The worst time to buy something is when you feel pressure to do so. Always be willing to walk away when a car salesman tells you about the other buyers looking at the car you think you want.
- Know how much you’re willing to spend. And know how that changes if what’s offered is slightly different than the ideal item you were considering.
Buy the things you would consider buying anyway when they’re offered for substantially less money than you would otherwise have to pay. And that’s it.
Often we buy things because of the excitement, because there’s buzz around a good deal, or because all of a sudden it seems like a good idea. I prefer not buying things. I consider them. I may even add them to my shopping cart. And then I go remove things, reconsidering whether I actually need it or even wanted it as much as I thought.
Back when I was in my early 20s and started working out of college my first job paid $21,000. I earned some quick raises over my first few months — to $23,000 and then $24,500 and after a year to $30,500. Once I made over $30,000 I got my own apartment (a very small unit in a bit of a rundown area sandwiched between two bowling alleys).
I’d go shopping but I wouldn’t just buy things. I’d walk around. I’d consider. And I’d not buy a lot more than I’d buy. Because the truth is I don’t need that much stuff and don’t want it piling up.
There are so many things that seem like a good idea at the time that wind up in closets or in the trash. The diligent among us might resell them online.
Your key to Black Friday sales is not to buy a lot more than you buy, and only buy the things you figured out you wanted or needed anyway.