Friday, November 28, 2014

The Real Turkeys

“I see turkeys… they’re everywhere!” Sorry, I must be channeling the holiday spirit of Haley Joel Osment. But I really do see turkeys everywhere, and I’m not talking about the kind stuffed on your dining room table. No, I’m referring to the taller ones flocking to stores and malls on this Black Friday, which in typical Wal-Mart fashion has been rolled back to 6 AM Thursday.

Otherwise (presumably) rational people line up six or eight hours before the stores open to take advantage of discounted merchandise, or expecting to be one of the six customers in the line to obtain a store’s Door-Buster Special (amazingly, even though the store has only six in stock, the 100th person in line still believes he or she has a chance to snag the item advertised at a ridiculously low price). These same people, who on Election Day refuse to wait 90 minutes on a voting line to decide the fate of our democracy, will gladly arrive hours before dawn and stand in the freezing cold of winter, rain, or snow for a 25% discount (remember, the Door-Busters are gone in the first three minutes) off the regularly inflated price of an item they don’t need.

If they had needed it, they would’ve bought it long before Thanksgiving. No, Black Friday sales, which focus heavily on electronic toys (from TVs to iPads), are hyping impulse items mass-market retailers want consumers to think they need. It’s all about getting consumers to think they need a product they really don’t, and then each year convincing them to upgrade to a newer or larger version. Bought the 52-inch TV last year? That was so 2013; you need a 60-inch this year. Already have an iPhone 5? The new iPhone 6 comes in gold.

The truth is, you really don’t need any of the things the marketers and retailers are hawking this weekend. What you need, is to understand the difference between a “need” and a “want”. A need is something critical that you cannot live without (food, water, a roof over your head). A want is something you desire (a PlayStation, a cruise, a yacht) but can live without.

If you need something, there are two ways to buy it: with money you have, or with credit (borrowing the money with the intent to pay it back later). If you want something, but do not need it, then you should only buy it with the money you have, and not go into debt to purchase something you don’t really need. If you don’t have enough money to buy it (which is another way of saying you can’t afford it), then you should not buy it. What you should do is put away a small amount each month towards savings and use those earmarked funds to purchase your “wants” without having to go into debt to a credit card company at 29% interest.

It’s a trap, because once those credit card statements arrive in your mail in January, you’ll be paying interest at usurious rates on your Black Friday impulse purchases through the next Turkey Day. There’s even a holiday for consumers who fall for this trap. It’s celebrated every April 1. Can you guess its name?

No comments:

Post a Comment

Order Your Copy Today!