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Debt Centre

Debt Centre

It is the week before the famous Black Friday weekend, we at Debt Centre would like to share our concerns and advise with our readers about the positives and negatives of the upcoming shopping frenzy right on our doorsteps. Our goal is to keep our consumers aware of how easy it is to fall in the ever so famous FOMO trap, (Fear Of Missing Out), and what to do to keep track of your wealth savings creative plan, we have discussed in one of our previous blogs.

How did Black Friday start?

Interesting to know that the day stemmed from an American slave market day back in the 1600’s, when traders would sell slaves at a huge discount to plantation owners, this time of the year it is the start of their infamous winter season, and extra slaves were bought to get all the work done in a short time.

Through the years, that market day become one of the populist annual shopping days on the American calendar where traders and sellers prepare for massive profit in sales, and the buyers for gaining on huge offered discounts. Thanksgiving time in America was always the unofficial beginning of the Christmas season and it was declared a holiday on the last Thursday of November. Our source: https://citizen.co.za/lifestyle/1739585/the-dark-history-of-black-friday/

Did you know

The term “Black Friday” refers to the type of “ink” they have used in those days to calculate and do their business accounting? All losses were done in “red” ink and profit in “black”, easy now to understand why Black Friday means at the end, a day of huge profits for the traders aka retailers.

South Africa on top

 Believe it or not but South Africa has the biggest over indebted problem in the world but more so, we had the highest spending figures over the Black Friday weekend of 2018 overall the globe, go figure that.

On the Retail side – a week of bargains galore

Throughout the years the wholesale retailers adopted the American trending fashion and shopping styles, to keep up with the ever-growing modern world. Every year they are going bigger and better, at no expense to advertising and promotions which they know, the majority of shoppers cannot resist.

Their objective is to capitalise on the maximum bulk sales of high profits in quantity, and the best way is to attract shoppers with ridiculous bargains on needed or unnecessary products.

Their plan is to extend the one day into a weekend with cut off times, and the shopper’s rational decision making weakens, so that they can get out there to buy more in time.

You the shopper

The upside to the Black Friday Weekend is to shop with a constructive plan. Every year there are massive discount offers that one can hardly refuse, but the best way to go forward is to stick to your spending goals and budget.

If you are fortunate and had savings set aside throughout the year, with the plan to buy lots of needed bulk stock for the festive season and family gifts, you will enjoy the benefits of the offers and promotions to come.

 

Debt Centre

COUNT YOUR SPENDING

The shopping styles got easier and more user friendly every year, and retailers target the year-end festive season to release and launch their latest technology products and models. Online shopping became the latest trend with companies like Takealot, Zando, Amazon, which make your time spend in rush traffic a thing of the past.

The downside is a clear foreseen pitfall of buying things you cannot really afford or need, without rational planning of a budget you should work on. It’s so easy to get distracted by the flashy sale advertisement and promotions that are going on everyday, some are really good special deals if you plan ahead for the long run, with a budget that allows it.

Good idea vs. Bad Idea

 Good ideaDraw a cash flow  total before you go shopping for items and products you need for the house and family. Budget per person of the household and avoid overspending. Put your Black Friday shopping to good use when you have a young family, if the young ones start school next year they will need new school utensils, it is a good idea to look for back to school bargains now, and stock up for 2020.

The benefits of cash are that you stay in control of what you are spending on the Black Friday weekend. Buy things like toiletries that has become quite expensive over the past two years or so. Look for specials on underwear and clothing that you family need. Look at bulk groceries and meat on special, those are the items you could need over the Festive Season.

Another good idea is to collect all the various store catalogues and draw up a shopping list of the things you would need for the Festive Season, compare prices and buy quality, instead of quantity, as the prices will increase afterwards, and you can benefit from the savings on the products.

The Smart approach would be too think ahead of what awaits in the next two to three months. We call it Pre-Christmas, Post-Christmas and the “Back to School” shopping times. You have to plan for the much needed school amenities your children will need, so put aside a calculated amount for that in the new year, for all the school items you could not buy now during the Black Friday weekend.

Tip: Your budget must determine what you can buy this festive season, not what the attractive advertising promotions tell you, how you could save.

 Bad idea – To go into more debt by stretching your credit buying to the maximum, to afford what you want and not really need. The irrational decisions people tend to make on that moment because of their fear of missing out on great deals, are when they jeopardise their current loan and credit payment commitments, just to afford those special offers.

To open new accounts on top of all the other just to buy what you want is the easiest way to get lost in how you spend money you would have to pay back at the end of December already, when you most likely could fall into broke and tough times during the long and upcoming January month.

Needs and Wants

 When you prepare your list of everything that is on special, the needs and wants are vital for your shopping plan. “The needs” are the things you really would benefit from over the festive season. “The wants” are the things you really would like to buy that you do not need at the time, and you can do without. Buying a new Television set is a want and buying bulk lamb that is on special for a good price is a need.

Blind shopping

Black Friday is a week of bargains that lure the unaware consumers to spend over their budget limits and get caught up in new credit agreements. Like loans and credit cards for spending, where shops offer massive discounts on products, furniture and toys etc, all for their profit and to make you believe you need all those special discounts so that you can go overboard.

The consequences are that your’e over strained budget gets overloaded with more debt repayments. Consumers do not know how to calculate the interest, insurance and service fees on these repayments and have no idea that they are going to pay back much more in the end.

 Online shopping has become the latest trend of safe shopping and most outlets and retailers offer free delivery on ordered items bought over a certain limit.

That enforces you to buy more than what you initially needed and before you know it, you have spend your credit limit and you are back in your overdraft of your account. The traders are going all out this year to make online shopping more attractive, better deals and discounts on offer than those in the shop if you use their specialised shopping application on your phone.

We just want you to consider your best options, be it that online shopping, the message of caution still remains the priority, not to get swept away with all irresistible offers they send you on social media. Always check your balance, and restrict your spending to survive the coming months.

Be money wise

Wealth creation is a long term planning with your responsibility to save and set your financial limits to avoid overspending. Asking your bank for more credit to spend now and pay later will increase your interest on your premiums and your expenses next year.

It is wise to put your money to good use during the year to pay off smaller accounts and limit your family expenses, taking into consideration that salary increase in most cases is 0% and in other only 3,5% in our weak economy. Don’t neglect your Medical Aid, School fees, consider fuel increases after the Christmas, all that can add more financial stress on the household expenses if you don’t work with an economical budget to see you through the whole festive season ahead.

If you planning to go on holiday, spend an affordable amount and save on the things you would need, as to buying it at the shops where you’re going. Maintain a responsible wealth plan by spending only what you can afford, cover your accounts, your family expenses and save for your holiday and entertainment.

Our Conclusion

Every year we at Debt Centre experience the desperation of our consumers that became over indebted over Christmas, and could not qualify for another loan or extension at their banks. This blog is to create the awareness that consumers need to save where they can, plan ahead, avoid further debt and enjoy the spoils of a shopping weekend like Black Friday without braking your bank.

Message from the author Ms Annienne Nel

If you have followed our advise on our previous blogs regarding building your wealth savings plan, become debt free and avoid all the pitfalls and scams, you could be in the advantage position today, to buy what you need and enjoy the massive savings of the coming Black Friday weekend. Remember Christmas is coming, be blessed and enjoy your time with your loved ones.