Do your homework this Black Friday – financial expert

Retailers and consumers are already gearing up for this month’s Black Friday sales, but Shafeeqah Isaacs, head of financial education at DirectAxis, cautions that while Black Friday may provide an opportunity to pick up some good deals ahead of the festive season, this should not be at the expense of your financial well-being.

“There will be no shortage of people trying to cash in this Black Friday as retailers try to offset the effects of our sluggish economic growth and losses from July’s looting, while consumers will be eager to stretch their hard-earned money as far as possible,” Isaacs cautions.

There is already evidence of this with some online retailers announcing sales for the whole of November.

Inevitably not all the deals will be as good as the marketing hype suggests and people will get caught up in the excitement, buy more than they had intended or things they do not need or cannot afford.

Isaacs and her colleagues combined some of their personal experiences and financial expertise to prepare some simple guidelines about shopping on Black Friday, without getting the blues afterwards because your bank account is in the red:

1. Do your homework: Avoid impulse buys. It’s a sure way to overspend. Prepare a shopping list beforehand and do some online research to compare prices. This way you’ll know if you’re getting a good deal and won’t end up with a pile of stuff that you’ve overpaid for and don’t really want or need.

2. If you can’t afford it don’t buy it: Work out how much you can afford to spend and stick to that budget. If you can’t get what you need within the budget, then you can’t afford it now and will have to save until you can. Always protect your credit rating and avoid going into debt unnecessarily.

Isaacs points out that when consumers overextend themselves it affects their credit score. A poor credit score may result in future loan applications not being approved or having to pay more interest because you’re considered higher risk.

“Your credit score tells everyone from landlords to credit providers how financially responsible you are. It’s worth thinking about the potential long-term consequences before going on a Black Friday binge,” says Isaacs.

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3. Buy the brands you know: Big brands are usually well prepared for Black Friday. They have the stock, IT and back-office systems in place to make sure their customers aren’t disappointed. They comply with the Consumer Protection Act and will have policies and procedures in place to deal with returns or damaged goods.

Don’t forget that scammers and con-artists are also looking to cash in on the hype around Black Friday, which is another good reason to stick with recognised brands.

4. Think beyond Black Friday: The festive season comes soon after Black Friday and it’s typically a time when people spend more than usual. If you max out your credit card at the end of November, you may have a miserable December holiday.

Also consider that many businesses pay their employees early in December. If you have not planned ahead this can make for a very long January, especially if you have school-going children.

Remember that they only go back to school at the end of January, and you may have to pay for new uniforms, books, school fees and transport.

There is a great quote that is attributed to various people including Hollywood stars, a comedian and financial planners, “We buy things we don’t need with money we don’t have to impress people we don’t like.”

“This Black Friday do not be that person,” says Isaacs.

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