IN YOUR CORNER
Yay, it's Black Friday week! But before you splash out, think hard
The sales are tempting, but they aren't for everyone
“Spoil yourself. You deserve it.”
That was HomeChoice’s subject line in its marketing e-mail last week.
That old “it’s been a long, hard year, now reward yourself” marketing line used to be reserved for the festive season, but in recent years SA retailers have been getting South Africans into splurge mode a month earlier with Black Friday.
But the spend fest is not limited to just one day any more – it’s up to five days, as in Makro’s Black5Day, starting on Wednesday: “Five days of explosive deals.”
So here’s a fun fact as Black Friday FOMO takes hold, courtesy of the National Credit Regulator (NCR): about 39% of SA’s 26.46 million credit-active consumers have impaired credit records.
That means 9.6 million South Africans are three or more months behind with their repayments, or they have adverse listings or a judgment on their credit records.
And it’s why I’m getting as many cautionary press releases from the likes of the NCR as I am from merchants doing their best to get consumers hyped up to spend, spend, spend.
“If you did not budget for Black Friday this year, do not be tempted because buying on impulse may cause you to have a bad credit record,” said Jimmy Golele, the NCR’s acting communications manager.
More than 4.7 million card transactions were processed during Black Friday 2017, amounting to a total debit and credit card spend of R2.4bn.
“One wonders, will this come out of South Africans’ savings or is it a matter of making a bulk debt to carry into 2019?” asked Capitec Bank, which issued a release urging consumers to “think again” about Black Friday.
It included some excellent advice, powerfully expressed:
Be smart. Ask yourself: “Will this purchase help me to live better and realise my dreams?” It’s all about long-term utility over short-term happiness.
When buying things on credit make sure the value of the item will outlive the repayment plan and look at all the costs of credit.
If you’re still paying off a student loan or a car and have existing debt on credit cards, Black Friday is probably something to avoid.
I think the bank’s press release writer was bang on with “short-term happiness”.
Black Friday and its promise of bagging an amazing bargain is as impossible for some to resist as gambling.
So if you can’t resist that dopamine hit, at least impose a strict spend limit on yourself and don’t allow yourself to exceed it.
The best saving you can make in Black Friday week is not to buy any “bargain” at all.
If you really want to spoil yourself, put that spend towards settling some of your existing debt.
Because what you really deserve is the liberating, exhilarating feeling you get when you pay off a debt that’s been weighing heavily on you for a long time, restoring your credit record.