The National Debt Advisors has cautioned consumers against reckless spending for Black Friday and the upcoming Festive Season.

The holidays are almost upon us and retailers are pulling out their best tricks to make the most of consumer expenditure during Black Friday, which falls on 25 November this year, as well as the festive season.

However, the CEO of National Debt Advisors Charnel Collins, says Black Friday is not the biggest discount shopping day of the year, as so many believe.

There are far better discount opportunities throughout the year.

 

Collins says many retail outlets often inflate prices just before Black Friday to create the illusion that prices have decreased dramatically on the day.

She also references the marketing practice called the “loss leader” approach.

“This involves lowering the prices of a select few items to attract buyers to the store, which often leads to shoppers losing these apparent savings by purchasing other, non-discounted items.”

Collins says there are ways to access great deals and save on their holiday spend.

“The important thing is to shop wisely and not get duped into buying things you do not need. More importantly, consumers should avoid buying on credit all in the name of Black Friday.”

According to the latest data from consumer credit reporting agency TransUnion, despite overall consumer sentiment indicating a cutback on spend, credit activity has, in fact, grown.

The volume of credit card originations has been steadily growing since its low in Q3 2020, which is indicative of higher consumer demand for credit as well as increased appetite from credit lenders.

The same study revealed that 74% of all card originations came from Gen Z and Millennial consumers.

“Younger consumers are becoming more amenable to buying on credit and thus the debt ramifications are likely to follow,” says Collins.

Collins cautions consumers not to allow Black Friday or the festive season to derail them from practising healthy money management tactics.

Top tips to keep in mind this Black Friday as well as the upcoming festive season:

1. Create a budget and stick to it: Make a list of all the items you want to buy and set a corresponding budget, making sure you do not deviate from this plan. Do your research by browsing different stores for the best deals on those particular items – and nothing else. Avoid the impulse buying of items that are not on your list.

2. Stay vigilant: With online shopping, be careful of chancers trying to take advantage of the frenzy and scam people into buying poor quality or dubious products. Apply the notion that ‘if it’s too good to be true, it probably is.’

3. Keep in mind that Black Friday is not only for luxury or non-essential items: Be on the lookout for essential items (like food and toiletries) that you can save money on, especially when buying in bulk. These can be added to your list and factored into your monthly essentials budget.

4. Avoid debt at all costs: If you cannot afford to buy an item with the funds you have available, don’t buy it. All too often, consumers turn to credit but this will only lead to you paying much more than the advertised price, thanks to interest and debt servicing costs. Collins advises that the best way to avoid debt is to keep track of your spending and buy only what you can afford.

5. Think about Jan-worry: “After a long year, most of us want to let our hair down and relax. This often sees us digging deep into our pockets to enjoy all the season has to offer,” says Collins. While there is nothing wrong with the occasional treat and enjoying yourself responsibly, there is nothing worse than waking up in January wondering how you will make it to the end of the month.” Collins adds that the best way to ensure that essential expenses are taken care of is to pay for them in December, before indulging in any holiday expenditure. Having a pot of savings for January will also ensure that you start your year without financial stress.”

Collins says consumers spend more during the festive season than at any other time of the year, so for this reason everyone should have savings in place to cater for this time of the year.

Channel a portion of any year-end bonus you receive towards these savings. If you did not save up, you can still manage your spending by creating a budget and sticking to it.