Author: www.wealthplanning.co.za

Article by Business Tech

South Africa’s biggest shopping day, Black Friday, is almost upon us – and while retailers and brands are gearing up to broadcast flashy sales and discount prices, financial services groups are urging consumers to proceed with caution.

Consumers are already carrying shocking amounts of debt, and even though sales days like Black Friday present an opportunity to get wanted items at a discount price, consumers need to be smart about it, so that they don’t get themselves into further financial trouble.

According to loan and insurance group Bayport, many shoppers are easily seduced by the many deals and specials available on the day – but with budgets already tight, they run the risk of getting into further debt.

“With so many special offers available – in store and online – the temptation to buy more than you budgeted for will be strong. While it is so easy to get caught up in a retail frenzy, common sense should prevail,” said Bayport’s Tessa Verwoerdt.

“The simple rule is don’t spend what you haven’t got,” she said.

Plan

“Retailers plan way ahead for Black Friday deals. You should do the same. Now that we know Black Friday is an annual event in South Africa, you should ideally start planning for next year as soon as this year’s sale is over,” said Verwoerdt.

This planning mainly entails saving so you don’t have to dip into your monthly cash flow and budget.

It also means keeping a list of things you need or would want to get your hands on at a really good price rather than buying for the sake of a discount.

“When you know what you need, or really want, you can start looking around to see what different options there are and at what cost. By the time Black Friday comes around, you are prepared to take advantage of the special offers.”

Know your limits

Closely related to planning, is knowing your budget limits.

“It is a bad plan to pile purchases onto your credit card until it is maxed out. Even worse is to increase your credit limit in preparation for Black Friday – that is just looking for debt trouble,” Verwoerdt said.

Whenever debt is unplanned, it is likely to become difficult to pay off.

Know your money

Know how much you earn, how much goes out of your account, your monthly expenses and your balance.

Check your bank statement every month to ensure everything is correct and that there are no unauthorised transactions.

“When you get into the habit of reviewing your finances regularly, you become more involved and aware of your spending. Then Black Friday will be less of a temptation,” Verwoerdt said.

Be smart

The key to bargain hunting without breaking the bank comes down to a simple yes-or-no question. Were you already planning to buy the items you now have in your hands or your online shopping basket?

“If the answer is yes, then getting those items on Black Friday is a win. You probably already budgeted for them and now, instead of paying full price, you get to keep some hard-earned rands in your pocket,” Verwoerdt said.

It can also be a good opportunity to get some great Christmas present deals if you’ve done your homework about good bargains and have drawn up a list of recipients and potential gift items.

“However, if your answer is no, the retailers have got you. When you buy something on Black Friday that you didn’t plan to buy in any event, you’re going outside of your budget. You’re using money you intended to spend elsewhere, which could either mean you can’t spend as much on groceries or going out this month, or you’ll exceed your spending limits. Neither is a good option,” it said.

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