Here's How Retailers Are Manipulating You on Black Friday

iStock.com/andesr
iStock.com/andesr

For many people, one of the best parts of Thanksgiving is grabbing a newspaper to check out the retail circulars for Black Friday deals. The internet has influenced this tradition to an extent—many of the Black Friday ads are leaked online days or weeks in advance—but there’s still an undeniable psychological pull behind this national shopping day. For some retailers, the holidays can make up roughly a third of their annual revenue, with consumers spending $720 billion on Black Friday. Clearly, they have mastered the art of prying open our wallets.

How do they do it? According to a recent piece by Chavie Lieber at Vox, Black Friday is an exercise in shopper manipulation. Retailers typically begin by blanketing their email lists with notices of early sales beginning in late October and November, squeezing in valuable extra weeks out of the shopping season. Known as “Christmas creep,” it promotes Black Friday less as a single day and more of a month-long atmosphere.

Retailers also depend on promoting a level of anxiety among shoppers by depicting deals as being singular or exclusive. Insisting a deal is only good on a certain day or window of time creates a sense of urgency—even if that deal might crop up elsewhere during the year. Special “deals” might actually be just a method of creative pricing. Buy One, Get One, or BOGO, infers two items for the price of one, for example, but buying one item at regular price might not be much different than buying two on sale another time. Still, consumers are primed to respond to “free” without stopping to think if they’d consider the list price for the single item a good deal without the bonus.

A 2017 Money.com report made mention of the fact that many BOGO deals and other promotions aren’t exactly novel. Stores often repeat the same deals from one year to the next, making sure the economics of their promotions are in line with their financial goals.

Despite the hyperbole and convenience of online shopping, consumers still seem to make a ritual out of going out on Black Friday. (A 2017 survey estimated 25 percent of shoppers will head out to fight the crowds.) It’s less about the desire for deals than the competitive nature of the day. Snagging a deal with perceived exclusivity is satisfying. So is heading back to your car with bags of stuff you may never have bought otherwise.

Shoppers that are task-oriented feel a sense of fulfillment when they get rung up for an advertised deal. Social shoppers actually enjoy the crowds and feel a sense of camaraderie with bargain-hunters.

How you feel about Black Friday depends on what you’re looking to get out of it. If you’re after once-in-a-lifetime deals, you might be disappointed to find that you can save money during other times of the year. But if you treat the phenomenon as a challenge or a social gathering, then you’re likely to walk out of a store happy. If you're upbeat about having overspent, then retailers—and all of their subtle psychological tricks—have done their job.

[h/t Vox]

Want to Retire a Millionaire? Here's How Much You Need to Put Into Your 401(k) Each Month

iStock/AndreyPopov
iStock/AndreyPopov

Despite stereotypes that accuse young people of mishandling their finances, Millennials are actually more likely than Baby Boomers and Gen Xers to contribute money to their 401(k) plans. But if you want to retire rich, simply having a tax-free retirement account may not be enough. CNBC recently broke down exactly how much of your salary you need to contribute in order to hit the $1 million mark when you withdraw your 401(k) funds at age 65.

Many financial advisors recommend contributing 10 to 15 percent of your gross income to your retirement plan—or less, if that number exceeds $19,000, the 401(k) contribution limit for 2019. Depending on the rate of return on your investment portfolio and your salary, you could contribute less than that and still retire a millionaire. The key is starting early enough: The later you wait to open your 401(K), the more of your salary you'll need to set aside in order to catch up.

Here's CNBC's break down of what you need to invest per month to save $1 million by retirement, starting at three different ages and looking at three possible rates of return.

Age 25

With a 4 percent rate of return: $843.24 per month
With a 6 percent rate of return: $499.64 per month
With an 8 percent rate of return: $284.55 per month

Age 30

With a 4 percent rate of return: $1090.78 per month
With a 6 percent rate of return: $698.41 per month
With an 8 percent rate of return: $433.06 per month

Age 40

With a 4 percent rate of return: $1938.57 per month
With a 6 percent rate of return: $1435.83 per month
With an 8 percent rate of return: $1044.53 per month

Of course, not everyone can contribute this much to a 401(k) consistently throughout their career. Salaries and living expenses fluctuate, and even if dropping 15 percent of your paycheck into a retirement plan is easy to do now, that may not always be the case. The reverse may also be true.

If you can't meet the goals laid out above at this point in your life, that doesn't mean you should delay saving for retirement altogether. When it comes to a 401(k), financial planners emphasize that putting aside something—even 1 or 2 percent of your salary—is much better than saving nothing at all. Not sure where to begin? Here are some tips for getting started with your 401(k).

[h/t CNBC]

25 of the Best Places to Retire Early in America

Maine's Portland Head Lighthouse.
Maine's Portland Head Lighthouse.
iStock/sara_winter

Retirement is a word we often associate with sun-loving sexagenarians and beyond who are living out their glory years in a Florida bungalow. To many, it's a luxury afforded only to those seasoned professionals who did their time in the workforce. But Kiplinger, the nearly 100-year-old publication focused on personal finance and business forecasts, says otherwise. The site recently reported how, with careful planning, a person could successfully retire early.

By “retiring early,” the site is referring to a retirement age of around 45, not 25 (sorry, to all you hopeful Millennials out there). While there is some taboo surrounding a person’s decision to move forward with such a choice, those who have actually done it have praised its many benefits. So what kind of careful planning would allow for someone to achieve such a goal?

According to Kiplinger, one of the best ways to successfully quit your day job while you're still in your 40s is to settle in a place where the living conditions—including cost of living, tax rates, and income opportunities—allow you to keep busy and remain financially solvent. To help out, Kiplinger released a list of the best places in each state for early retirement, factoring in such variables as the health of each state's economy, taxes on retirees, poverty rates within the retirement demographic, and certain population data.

Listed alphabetically by state, cities and towns with higher concentrations of residents aged 45 to 64 were also favored. Here are 25 of Kiplinger's 50 best places.

  1. Huntsville, Alabama

  1. Lake Havasu City, Arizona

  1. San Francisco, California

  1. New Milford, Connecticut

  1. Tampa, Florida

  1. Kapaa, Hawaii

  1. Champaign-Urbana, Illinois

  1. Des Moines, Iowa

  1. Louisville, Kentucky

  1. Portland, Maine

  1. Pittsfield, Massachusetts

  1. Minneapolis, Minnesota

  1. St. Louis, Missouri

  1. Omaha, Nebraska

  1. Manchester, New Hampshire

  1. Albuquerque, New Mexico

  1. Raleigh, North Carolina

  1. Cincinnati, Ohio

  1. Portland, Oregon

  1. Providence, Rhode Island

  1. Pierre, South Dakota

  1. Sherman, Texas

  1. Burlington, Vermont

  1. Seattle, Washington

  1. Green Bay, Wisconsin

To check out the full list of 50, visit Kiplinger's website.

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