Retailers are expecting bumper sales over the Black Friday weekend this year thanks to South Africa’s improved consumer confidence since the May elections. But just because the crowds may be rushing to the shops on 29 November through to Cyber Monday on 2 December to take advantage of special deals doesn’t mean you have to follow them blindly.
This is the view of John Manyike, Head of Financial Education at Old Mutual, who says you should be guided by your own financial priorities and shouldn’t let the actions of others, or the inevitable marketing hype surrounding the event, sway you into making impulse purchases.
According to the Old Mutual Savings and Investment Monitor, 50% of respondents are concerned about the temptation to withdraw funds early from their savings. While the increased liquidity gained from the two-pot withdrawal system may tempt you to spend, it’s essential to remain focused on your financial goals and make choices that align with your long-term objectives.
Before parting with your hard-earned cash, Manyike suggests you consider the following pointers:
Plan your seasonal shopping
The festive season has over the years evolved into a time of high spending – buying gifts, entertaining and even enjoying a relaxing vacation. Black Friday offers a way to save money on these expenses and provides an opportunity to avoid the festive rush, allowing you to take advantage of discounted prices. By planning your seasonal shopping in advance, you can make Black Friday work in your favour. “Just try not to deviate from your plan, because that’s when you can run into trouble,” Manyike says.
Will you really save money?
Don’t take special deals at face value. Some retailers may use various tricks to entice you into spending money you never planned to spend, such as making a discount appear larger than it actually is by marking up an item before applying the discount to give a false impression of an insurmountable bargain. “If you see an item you think is at a good price, compare it online with what other retailers are charging. It may be that the discount is not as humongous as you thought,” Manyike says.
He also says some retailers may use Black Friday as an opportunity to rid their shelves of old or unwanted stock, in which case a large discount would be make sense, but always run comparisons to hunt for the best deals.
Don’t give in to your emotions
Marketing typically appeals to your emotions, and strategies around Black Friday invariably generate FOMO: fear of missing out. “FOMO is commonly known in the financial industry and explains sudden buying surges on the stock market, which can lead to market bubbles,” Manyike says. “Emotions such as fear, envy and greed cloud your judgement. You are likely to make better financial decisions if you try to remain rational, objective and emotionally detached.”
Shopping in-store versus online
You physically see what you’re getting when shopping in-store, but considering the crowds that characterise Black Friday, going online may be a better option. However, this brings its own risks. “Only use retail sites that are credible and trusted, and make sure the payment method is secure. Beware of strange emails, never click on unfamiliar links, and use strong passwords to protect your personal information,” Manyike says.
Avoid buying on credit
If you buy on credit, you end up paying more, which offsets any discount. “Generally speaking, I would suggest that if you cannot afford to pay cash for the item, it’s not worth getting further into debt, because the value of any discount will be gobbled up by interest and finance charges. Exceptions may be on larger items that you were planning to acquire anyway through a credit or financing agreement, like a car, if these are subject to Black Friday special deals,” Manyike says.
