Why you should be cautious on Black Friday

Durban – With Black Friday a few days away, people are preparing to shop until they drop.

However, financial experts are urging shoppers to be cautious and make purchases that are within their budget.

The more-than-60-year-old American shopping phenome- non has taken off in South Africa in the past four years and has become an important date on the local shopping calender.

The shopping spree is normally held the day after the American holiday of Thanksgiving.

Neil Roets, chief executive officer of Debt Rescue, said it was not wrong to spoil oneself as long as it was done within a budget.

“People think they are getting specials on items and therefore buy without budgeting,” Roets said.

Over the past few years, retailers have been encouraged by noting how South Africans have embraced Black Friday. This is in stark contrast to when it started. Retailers were initially apprehensive about its success.

Roets said retailers had started to advertise early this year and they expected heavy foot-and-online traffic at shopping malls and online as stores competed against one another.

He said this year would be one of the biggest Black Fridays yet because more stores were buying into the idea.

“Reality normally sets in for shoppers in January and February when children have to go back to school,” he said.

The period, January and February, is also one of the busiest times for Debt Rescue because many people go under debt review.

Roets said most of Debt Rescue’s clients were in the 25- to 35-year category.

He reasoned that most of the people in this category were young and entering the job market.

They were also prey to creditors. Financial illiteracy was a key factor for this, said Roets. Some were also breadwinners and went to Debt Rescue so that they could continue providing for their families.

He said it was concerning that there were people who were over-indebted and still buying.

Roets advised people not to fall into the trap of spending their salaries quickly during the festive period.

He said people were gene- rally paid early in December. Some also received a 13th cheque or bonus.

“What people often forget is that because of the early pay cheque they will have to wait more than a month to receive their next salary, throwing them into financial disarray and debt,” he said.

Economist Dawie Roodt also cautioned people on spending more than what they could afford.

Roodt said he expected Black Friday to have a huge economic boost for South Africa and this could have an impact on Christmas sales.

End-of-year sales could be lower, but they could be spread out over a longer period due to Black Friday, he said.

But because of it being a new phenomenon there still needed to be more research done on this, he said.

The event had “gained traction” because South Africa had become more connected and it was becoming a global phenomenon.

Roodt said he would not be surprised if the shopping bonanza became bigger over the years.

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