By: Jessica Pillay, Financial Adviser from Momentum Financial Planning

Black Friday is almost here, and pretty soon the entire world will be engulfed in the annual shopping extravaganza with haughty of promises, deep discounts, jaw-dropping deals, and an opportunity to overindulge in retail therapy. But as the Black Friday hype ramps up, Jessica Pillay, Financial Adviser from Momentum Financial Planning, says the need for financial vigilance should ramp up alongside it.

This year's Black Friday spending is projected to inject an impressive R88 billion into South Africa's economy, with the retail, wholesale, and fuel sectors leading the charge. Yet, amid these booming numbers, shoppers are also being warned about a surge in cyber scams.

“This is a reminder to us all that financial literacy is the most powerful tool in our arsenal against reckless spending and rampant fraud. South Africa has a poor savings culture, which means we have a poor spending culture… something that can only be fixed through awareness and understanding,” says Pillay.

To get the best out of Black Friday without falling into debt, Pillay says understanding spending habits and following a few simple principles can make all the difference.

Get advice before investing or spending

When it comes to spending on Black Friday, it’s easy to get swept up in the allure of discounted prices. However, Pillay believes savvy shoppers know that having a plan and seeking guidance on major purchases can prevent unnecessary financial strain.

“Yes, so many deals look attractive, but we must all consider consulting a financial adviser or using budgeting tools to keep spending in check.”

Pillay says financial advisers can help you prioritise purchases that truly fit your needs and financial goals, ensuring you’re not just snagging bargains but making meaningful investments.

Plan, plan, plan

According to Pillay, impulse buying is Black Friday’s biggest trap. Studies show that it’s not uncommon for shoppers to walk away with items they never planned to purchase, often because they fell for “too-good-to-miss” deals.

“This year, with a cost-of-living crisis at our heels, spending can easily spiral out of control,” warns Pillay. “It doesn’t matter how many lines of credit and payment options you explore. A solid plan and a commitment to staying true to that plan will be the difference between financial health and debt.”

To get this Black Friday financial plan underway, Pillay suggests starting with making a list of items you genuinely need, particularly big-ticket purchases you’ve already budgeted for. Research prices beforehand to set realistic spending limits and resist the temptation to go beyond them. Additionally, Pillay says we should all be using budgeting apps to track our expenses as we shop; this will help u stay within budget and provide an easy way to review spending post-Black Friday.

If it’s too good to be true, it probably is

With retailers and scammers alike vying for your attention, shoppers must be cautious. This year, South Africa faces an increased risk of online scams, with cybercriminals employing ever more sophisticated tactics.

“Scammers know that Black Friday shoppers are often rushed and distracted, making it the perfect time to prey on their desire for a good deal,” says Pillay.

She suggests sticking with trusted retailers and secure websites to avoid clicking on suspicious links in emails or texts.

“If a discount seems outrageous, take a moment to verify its legitimacy, because you likely know deep down it is too good to be true.”

Black Friday 2024: Record-breaking spending but higher risks

A study by the Bureau of Market Research shows that while some consumers feel financially better off, many struggle with inflation and stagnant wages.

“This makes it especially important to maintain a balanced perspective during this period,” says Pillay. “By being money savvy, we can better understand the importance of responsible spending.”

In the end, Pillay says it’s not about avoiding deals, it’s about making smart choices that align with long-term financial wellbeing. Although none of us can deny the Black Friday allure, Pillay says good spending habits, advice, and careful planning, can see us enjoy all the benefits without the financial pitfalls.

“Financial literacy remains the best defence against impulsive spending, debt, and scams. In a shopping landscape filled with promises, we must all remember the golden rule: if a deal seems too good to be true, it just might be,” Pillay concludes.