CASH IS KING ON BLACK FRIDAY

BLACK Friday savings are only real if you are paying in cash or debit card linked to money in the bank, or any other method of payment which does not involve interest.

Any other form of payment – especially those with high interest rates – just cost you more, and you save nothing.

Marketing campaigns for all these “specials” seem to start earlier every year.

This year I saw them in October already ahead of the big day on 28 November.

Every year after the Black Friday hype – price comparisons prove that many Black Friday “savings” are often just marketing tricks to make consumers think they are getting something for cheaper – when they actually aren’t.

In certain stores, prices are inflated, only to be “lowered” for Black Friday. So there is no real savings benefit to consumers.

Now while I am not a fan of all the Black Friday hype, I can understand the need to buy some “I deserve it” items.

It’s been one helluva year – and Black Friday is so perfectly positioned on the calendar – that vulnerable consumers do let their guard down and let their emotions take over.

Consumers are struggling with the increase in debt repayments and the ever-rising cost of living.

Mense need to look at the hard truths about their financial situation before “going bos” on Black Friday deals.

Things like eggs, potatoes and petrol are unaffordable to many right now. Do people who don’t have money for necessities need to spend money on luxury items simply because it is advertised at a discounted price?

I am not telling you to not spend money or not to buy things. If you have the extra cash, or need an item or have saved up for something special, then by all means, GO FOR IT.

However, one thing is guaranteed – if you’re not paying cash (no interest) for an item, then there is no way you are getting a bargain.

When buying on your credit card or using funds from an overdraft or personal loan, take the interest rate and repayment amounts into account.

Then weigh it up against the “savings” you are getting on an item.

Buying an item on your credit card or from a personal loan usually makes the item more expensive than the original price, because of the high interest rates on credit cards and personal loans.

Undoubtedly, every rand saved on a “special” helps, but be careful not to succumb to the retail advertising hype and madness that can leave you spending money that you don’t have. 

If you have physically saved cash in anticipation of a great Black Friday deal – then go for it. However, the worst thing you can do is use your credit card or a personal loan for a Black Friday special.

Not only will you not be saving money – but you will also end up paying more than even the “original price”

For example – if a TV “was” R17 000 and is “now” R15 000 – and you have the money in your account to pay for it – then that is a good deal.

However, if you are going to use credit to finance this ‘special’ – then that changes things.

If you take out a personal loan, at an interest rate of 24.5 percent over 24 months – you will end up paying over R23 000 for that TV. Then that isn’t a good deal anymore.

Here are some Black Friday shopping tips.

• Start checking prices for identified products ahead of time, so that you know you are really getting a good deal when Black Friday prices are advertised
• Take advantage of good prices on necessities - and buy in bulk where and when you can.
• Be vigilant and look out for Black Friday scams – especially online.
• Make sure that the site you are on is a legitimate site before submitting your payment details
• Check your loyalty and reward systems you can use to benefit even more from lower prices
• Set an amount you are happy to spend on Black Friday deals – and then work backwards from there.
• Don’t add impulse buys to your list or basket
• Don’t use credit for Black Friday buys. There is no saving in that.
• Ask yourself “If I didn’t need it before it went on sale, do I need it now? ”
• Make sure that your necessities and debt repayments have been attended to before spending money on Black Friday deals.

Yes, it is important for us as South Africans to stimulate the economy, and we have to support local – but not the expense of our own financial survival.