Black Friday, and indeed the whole of Blackvember, can feel like you’re being bombarded with deals you absolutely cannot miss out on. The South African Savings Institute (SASI) says you can, and you’ll be financially better off for it. “While the Black Friday weekend can offer some great deals, it can also scuttle your savings plans if you don’t plan properly,” says Gerald Mwandiambira, CEO of the South African Savings Institute (SASI). “The main rule of thumb – only buy what you already need and were planning on buying.”
It’s been an incredibly challenging year, and TransUnion’s latest Financial Hardship Study shows that 77% of South African consumers say their finances continue to be impacted by the pandemic. For these consumers, credit products are the bills most say they will not be able to pay. These include personal loans (36%), retail/clothing store accounts (35%) and credit cards (33%).
Mwandiambira cautions that retailers are ultimately in it to maximise profits with marketing designed to manipulate consumer psychology. “Remember, Black Friday is just one of the early sales of the festive retail season and bargains don’t always have to be snapped up immediately. There will be other opportunities and impulse buying driven by the bargain frenzy is not the way to go. You could walk away saving money on a few items, but losing more with your maxed-out credit card and store account you don’t need.”
Black Friday doesn’t have to end in arrears and tears. There is opportunity in the madness and Black Friday sales can offer significant savings opportunities to stock up essentials in bulk, or major discounts on big-ticket items, if you go in with your eyes open. Here are SASI’s top tips to survive Black Friday.
- Stay away unless you’ve saved. The Black Friday marketing engine is hard to resist, but remember retailers are scoring too.
- Plan your spend and budget in advance. Scout out potential deals ahead of time, and don’t go over what you can afford. Know what your family priorities are: a washing machine may be more important than a big-screen TV, for example.
- Ensure discounts are not misleading. Do your homework and use price comparison sites like pricecheck.co.za to be sure that you are getting a bargain.
- Look out for premium and service cost reductions. Non-retail companies are also taking advantage of the Black Friday craze and may offer great opportunities. Those are the kind of specials you can look out for as they’ll stay with you the whole year
- Complete a credit health check. This is part of knowing your own financial state of health. Make sure you’ve sorted out any issues and avoid the risk of more.
- Always use credit responsibly. Credit can help you afford big-ticket items you may not otherwise be able to buy, but revolving credit can be a trap and you could end up paying much more. Only spend what you can afford to repay on fixed-term credit.
- Avoid opening store accounts, as these are high-risk credit. TransUnion research shows a 35% increase in retail instalment accounts opened and a 23% increase in clothing accounts during the 2019 Black Friday period. Just six months later, more than half of those new accounts were in arrears by one month or more.
- Speculative buying is high risk. One of the Black Friday trends is buying to sell on at a later stage. This can land you in hot water.
- Be aware that retailers are getting rid of stock they don’t need – You may be getting a bargain on models that are no longer the latest model. New models immediately devalue yours. This year, the specials may not be as expansive as they usually are, and it may take a while to get your products. Many stores may not have the stock, and there are global logistics backlogs.
- Spend on what you would normally spend money on – get discounts on your normal spending activity such as specials ahead of the festive family gatherings. There is value in supermarkets and clothing stores. For example – think ahead and buy your stationary in November. Look for things you can celebrate and say you spent wisely in Black November.
- Budget for 2021 – there are a lot of unanswered questions when it comes to planning – rather budget and prepare for your normal recurrent annual expenses such as school fees
Finally, it’s been a particularly heavy year for many across the nation, and SASI has a more altruistic challenge for you this Black Friday. “Now could be a good time to think about others that are less fortunate, and you can get your shopping fix by taking advantage of the deals for them,” says Gerald. “There is so much need in South Africa. If you’re in a position to do so, why not see where you can help, rather than splashing out on items for yourself.”