As Black Friday approaches, consumers in South Africa are being cautioned against the perils of impulse buying, which can quickly lead to overspending and significant debt.
The National Financial Ombud (NFO) has issued this stark warning in anticipation of one of the biggest shopping events of the year, encouraging shoppers to remain vigilant and disciplined amidst enticing offers.
Howard Gabriels, Credit Division Lead Ombud at the NFO, emphasises the importance of planning ahead to avoid the financial pitfalls that can arise from carefree spending sprees.
“With enticing discounts and limited-time offers on the horizon, many consumers face the risk of accumulating high-interest debt, thus jeopardising their long-term financial goals and well-being,” Gabriels remarks.
He further urges credit-active South Africans to engage in responsible spending practices to safeguard their financial future.
“The lure of discounted products may create the illusion of savings. Unplanned, credit-based purchases can quickly escalate into unmanageable debt, impacting people’s ability to save for homes, education, retirement, or even essential emergencies,” he said.
To assuage these concerns, the NFO offers vital tips for consumers to keep their finances in check this Black Friday:
Set a Spending Budget: Determine a spending limit based on your current finances and stick to it. Setting a budget helps minimise the temptation to overspend and allows you to focus on priority items.
Avoid High-Interest Credit Options: If you must use credit, steer clear of high-interest credit cards or short-term loans that may spiral into a cycle of debt. Opt for lower-interest options and prepare a repayment plan.
Prioritise Long-Term Financial Goals: Keep your financial objectives, such as saving for a home, retirement, or children’s education, in mind. Evaluate today's purchases against tomorrow's aspirations.
Leave Room for Emergencies: Ensure you have an emergency fund. Spending all your savings on Black Friday could leave you exposed to unexpected expenses, potentially leading to additional debt.
Monitor Your Credit Usage: Overusing credit can lower your credit score. It's crucial to maintain credit balances at a manageable level to preserve your creditworthiness and avoid higher borrowing costs in the future.
Gabriels further reminds consumers that the most impact full financial achievements are rooted in disciplined spending rather than fleeting sales.
The Star