Over the weekend there has been plenty of news coverage about Black Friday, the consumerist free-for-all we’ve imported from the United States in recent years, despite the fact that the celebration it relates to over there has no relevance over here. Black Friday is part of a long holiday weekend for most Americans, while here it’s just another reminder that there are less than 30 shopping days left ‘til Christmas.
This year, retailers were claiming an online pre-Christmas bonanza of sales, while journalists were queueing up outside Selfridges to report on the fact that they outnumbered customers (presumably because everyone was shopping online from the comfort of their own homes).
Reporters the length and breadth of the country were extolling their opinions as to whether or not this year’s sales were successful but there seemed to be very little coverage of whether or not we actually need an event like this or how much customers actually want it.
Do you really need it?
In financial education, you’ll often find activities based around the notion of ‘wants’ and ‘needs’ – do you just want that product or do you really need it? It’s a simple yet effective concept and one that can help frame people’s thinking when it comes to budgeting.
If you can control your urge to splurge long enough to consider the necessity and value of a purchase, then you begin to budget far more effectively. Such an approach can also help to avoid the many pitfalls of modern-day shopping, such as being offered a big discount at the checkout if you sign up for a store card (funny how they never seem to mention the interest rates with the same enthusiasm).
Making smart choices when shopping is an essential part of being financially literate but it means little if it’s not placed in context of the other decisions you have to make as an independent adult. Financial literacy requires you to understand how all the areas of your life fit together: where you live; how much you earn; what taxes you pay; what you choose to spend money on and what you are required to spend on money; these are all things to consider in developing your budgeting skills and managing your money effectively.
Learning how to make the right financial decisions
Everyone loves a bargain but whether or not we actually need one is a decision for us as individuals. The media and advertising frenzy that surrounds Black Friday doesn’t consider the wants and needs of the customer, it exists only to drive sales. But it does highlight the need to educate our young people to make sensible decisions about spending and budgeting as part of their overall skills development. Otherwise it is just as meaningless as importing a holiday celebration from another country that has no connection to our own lives.