Good morning and Happy Thanksgiving! I hope your day is filled with family and board games along with tons of turkey and stuffing (I love stuffing).
I should be entering receipts into YNAB right now. I usually check our bank account for my wife’s deposits at the same time but when I signed on to online banking I saw this:
DON’T FALL FOR THIS!
They are using the holidays as an excuse to sell you money
Look, I understand if you don’t have enough money to purchase all the Christmas gifts you’d like to. Maybe you will borrow money to buy gifts this year, I’m not here to judge.
We certainly don’t have an unlimited supply of gift money and borrowing would be a quick fix.
I want to buy my wife a $300 bluetooth-enabled car stereo for her 10yr old SUV and $120 J-racks for her kayak, but our goals are a bit more noble.
My wife DEFINITELY deserves those types of gifts, but we decided to be purposeful with our spending.
BTW: Nobody is going hungry and there will be gifts under the tree, so we’re all good.
The real problem with this ad
They are monopolizing on the weekend festivities to market their product to you.
What’s wrong with that? Everyone does it, and I understand that too.
But what does selling loans have to do with Black Friday?
THEY ARE SELLING YOU MONEY!
Hello? McFly! Let’s just call it what it is – they are selling you money.
Do you really need a Home Equity loan for Christmas? If so, I have a suggestion that will work better (keep reading).
Is this deal on an auto loan only available on November 28 and 30th? (Note: They won’t be open on Thanksgiving Day or Sunday, so this is truly a ‘Limited Time Offer”)
HA!
If you need to borrow money for gifts, do this
Get ready, I’m about to recommend doing something you would never expect. I am going to show you how to borrow money but STAY within budget.
First, make a list of names
Santa has a list and checks it twice. Even I can make one that includes my friends and family.
I use my phone’s Contacts to find those names I would otherwise have forgotten. Note: There are only a few people to buy gifts for that are not in your phone’s Contacts. Think about it – if you don’t have their phone number then they are merely an acquaintance (except the obligatory White Elephant gift-away or something for your boss).
Second, write down the gifts and estimated costs
This is the hard part. What would Aunt Sally like?
If you can’t think of anything then a gift card will suffice. Yes, we’ve been told that gift cards are gift cards are impersonal but they have become more socially acceptable over the past 5 years. (In fact, that’s all I want these days).
Third, take a cash-advance on your credit card
Yeah, you read that right. I just told you to take a cash advance on a CREDIT CARD! Remember, this is ONLY IF YOU MUST BORROW to buy gifts. If you have the money then ignore this advice.
Take out the exact amount of money you need for all your gifts and put it in an envelope. Keep the list with the envelope and only use the money to buy what is on the list.
The reason? Spending cash will keep you on budget.
Even if you get charged a 3% fee for the cash advance at least you won’t overspend. That’s the magic of cash: When it’s gone, it’s gone. There’s no going over budget. You have restricted your gift-giving to purchase plus 3 percent.
Fourth: Pay back the debt ASAP!
I’m a NOT recommending you borrow money for Christmas, but if you are new to getting out of debt or just need a little more to get by then this is the best way to limit the damage.
Make your first 2015 New Year’s Resolution to pay off the debt your Number 1 Priority!
Make sure this never happens again. As soon as the debt is gone start putting something away every month for next year.
Join a savings club at your local bank. Put $20 or $50 a month away and in ten months you will have $200 – $500 for Christmas 2015.
Eat turkey, don’t be one
One of the worst things you can do to your finances is fall for gimmicky deals and marketing tactics that have nothing to do with your long-term goals.
They are designed by very smart people with lots of dollars in their department to entice you to purchase what they have to sell.
This is all fine-and-good for retail stores, restaurants, and supply chains but what does Black Friday have to do with borrowing money?
It shouldn’t.
I laugh at my bank’s Black Friday Weekend Loan Sale, especially since they will only be open two of the three days this weekend. If you want to buy a car, don’t let a flashy ad make the decision for you.
There will be plenty of deals in the future. Your job is to avoid them at all costs for the good of your family and your future.
Happy Thanksgiving, have fun sitting in lines outside of Walmart tonight, and remember the REAL reason for this season.
Not sure about in the States, but up here in Canada if you take a cash advance, you start getting charged big interest the day you take the money out. I’d suggest using your credit card instead. If you don’t usually carry a balance, you won’t get charged interested until your bill is due. If you will over spend if you don’t have cash in your hands, then ya, cash advances might be a good option…
Thanks Emily. I always learn something new about Canada in the comments here on EOD. It’s amazing how many CAs read EOD.
Incidentally, I can’t agree with your recommendation to use a credit card instead (without doing the cash advance option). In the situation above our “consumer” is considering a HELOC or Auto Loan for Black Friday. If they can pay off their credit card in one month then they certainly don’t need this bank’s “special weekend-only offer”.
Again, I am NOT recommending borrowing for Christmas. But if they are going to do it anyway then my suggestion will help limit the damage and challenge the way they spend money (use cash from envelopes instead of plastic).
But I still shiver to think that I wrote that. #ifeelsodirty 🙂
OMG if you have to borrow money to buy gifts you are gonna wind up like me if you are not careful. Don’t do that! It will be the gift that keeps on giving… interest to the bank!
YES! Preach it DebtGirl!
Everybody is different. I am trying to remind myself that. But I have VERY loud bells and whistles going off with this one.
Planning to add debt for something not purely a need is crazy talk! I understand that many have gift giving as a love language and I don’t want to minimize relationships but ARGH! You even promote going through your contact list to find everyone you want to buy for? Wouldn’t you automatically remember those people you would buy for? (Spouse, children, parents, best friend, MAYBE siblings- done. Not Aunt Sally– unless she qualifies as best friend.) Buying for such an extensive list is all that is wrong with commercialism today and is why so many people are drowning in debt. It’s not about things! We shouldn’t buy people’s love! We shouldn’t minimize our relationships down to an exchange of things! Stuff is not what matters!
My suggestion from my obviously different approach (again, gift giving is not my love language): Homemade gifts. (My mom once gave the gift of a monthly delivery of homemade bread. Yum.) Time spent together. (If you need something to wrap make coupons.) PLEASE don’t plan to go into more debt. Gifts can be fun. Plan for them next year. THEN you can buy things. *pleading and sobbing* Don’t go into more debt!
I’m right there with you! I wanted to include an “instead of spending money create gifts from things you have around the house” and even thought about a “re-gifting” paragraph but it just didn’t fit this post. This was a warning that anyone-and-everyone is going to offer you their wares for Black Friday – even if they don’t change the price.
I went back this morning to see what their special offers were – they aren’t so great: The HELOC was 1.5% for the first 5 months, then went variable and the auto loan was 2.99% for a 4yr loan with at least $125 fees on top of it AND A FEE IF YOU PAID OFF THE LOAN IN UNDER A YEAR! What the big print giveth, the small print taketh away.
Mrs. MW, I agree with your suggestions completely. Do not go into more debt for Christmas. I wish our culture would only make it socially acceptable for everyone to believe that way.