Top tips for budgeting as holiday shopping season starts

File: Public sector unions are heading to the Constitutional Court to challenge a Labour Court ruling over salary increases. eNCA

JOHANNESBURG - It is almost that time of the year again when frenzied shoppers and bargain hunters descend upon stores and shopping sites looking for deeply discounted items.

Black Friday, the last Friday of November, marks the start of the holiday shopping season.

According to BankServ1, Black Friday 2019 saw a total of just over seven million transactions in South Africa -- an increase of almost 35 percent when compared to 2018’s figures.

The total amount spent by South Africans on Black Friday more than doubled from R2.9-billion in 2018 to R6-billion in 2019.

“With the COVID-19 pandemic and extremely tough economic conditions for consumers, it is more important than ever to plan for your Black Friday shopping spree,” says Johann Rossouw, a certified financial planner at Fiscal, a wealth management company.

While Black Friday can be an exhilarating experience for some, it can have severe financial implications for others. Below Rossouw offers top tips on how to survive the craziness that is Black Friday.

Plan ahead

Make a list of the items you have your eye on and do some research on what these products would normally cost.

This will allow you to see whether the items are actually on sale.

Rossouw explains, “There have been numerous reports in the past that retailers inflate the prices of their goods in the weeks leading up to Black Friday to make deals look more attractive than what they actually are.

Plan ahead and try to look past clever marketing gimmicks.”

Avoid credit cards and debt

When it comes to Black Friday shopping, cash is king. In these tough economic times, however, many consumers might not have access to large sums of cash lying around and will therefore turn to credit cards to fund their shopping sprees.

“A credit card can be a handy transactional tool and help you build up a credit record. However, credit cards can also lead to great financial difficulty if not managed carefully.

Some view credit cards as ‘free money’, but the reality is that interest rates on credit cards are often exorbitant. Be clever with swiping because potentially the interest you pay on the price will wipe out any discount you may have secured.”

Should you decide to make use of a credit card to purchase a big-ticket item, Rossouw’s advice (a) preferably pay off the debt before interest gets charged – most credit card companies provide a set number of days interest-free; and (b) know what the interest rate is, and calculate your total debt before making the purchasing decision.

Online Shopping

Predictions are that due to COVID-19, Black Friday will move mostly online.

“The good thing about online shopping,” adds Rossouw “is that it allows you to compare prices at a click of a button. This should hopefully guide you in making rational purchasing decisions.”

When buying from an international site, consumers should also remember that import duties apply, as do international credit card transaction fees.

Consumers should carefully consider the associated costs when purchasing goods from an international seller and importing to South Africa.

To conclude Rossouw adds, “Black Friday sales are infamous for shoppers getting aggressive as they tug of war over a discounted item.

A website tracks how many people have sustained injuries or lost their lives whilst out searching for Black Friday deals! Stay safe and shop smart.”

Source
IRESS

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