Black Friday is potentially a black hole of debt from which there is no escape, unless you have a Black Friday budget or know that you’re getting a year-end bonus and exactly how much it will be.

South Africans went on a Black Friday binge last year, spending R3 billion on this single shopping day, according to BankservAfrica. That was 15.92% more than the previous year.

In addition, recent research by TransUnion shows that consumers are more likely to take out loans and increase their spending limits during the Black Friday period. Looking at new accounts opened during Black Friday week last year - 19 to 26 November - compared to the same week a month before, TransUnion saw an increase of 37% in new accounts and a 21% spike in total credit limits for new credit cards, clothing and retail revolving accounts.

Most of this growth came from higher-risk loans, says Lee Naik, CEO of TransUnion Africa, with a 49% increase in retail installment accounts, normally used for furniture and electronics; and a 30% increase in retail revolving accounts, normally used for electronics, homeware and general appliances.

A shock finding of the TransUnion study is that six months down the line, just over half of the new retail revolving accounts taken out during Black Friday 2018 were more than one month in arrears.

What consumers fail to realise is that you can’t spend to save. You have to save to spend. Just because something is on special, doesn’t mean you will make a saving by buying it now. It’s only a saving if you fund the purchase from your savings.

And just because something is being sold on Black Friday doesn’t make it a good deal, cautions Yanga Nozibele, investment associate at Cannon Asset Managers.

Mica Townsend, Business Development Manager at 10X Investments, says Black Friday is not designed to save you money, but to get you to spend money that you otherwise wouldn’t.

“People need to see the hype for what it is: an attempt to get you caught up in all the bright colours, the advertisements and the excitement to make you act on impulse and ‘buy! buy! buy!’ without giving you a chance to stop and think,” she cautions.

Naik says Black Friday can be profitable for both smart consumers and retailers, but you can’t go in with the mindset of finding a bargain at any cost. “The problem comes after the madness has worn off.  That flat screen TV or PlayStation that’s on special for half the price might seem like a good bargain at the time, but it could lead to some very nasty debt down the road,” cautions Naik.

Nozibele says in order to make sure you get the best out of Black Friday and not the other way around, you must thoroughly plan for the specials you are going for and determine how much you can actually afford. 

Susan Steward from Budget Insurance warns that a lack of control can easily result in you buying things you don’t need, landing you in debt during the already financially demanding festive season. 

“You need to manage your and your family’s expectations well before Black Friday and be realistic about what deals you can and cannot afford,” Steward says. 

Naik suggests you start with an honest, financial health check where you’re clear on what you have, owe and can afford amid several steps you can take to protect your finances during the Black Friday frenzy. 

Steward adds that preparing weeks ahead of Black Friday and Cyber Monday, the first Monday after Black Friday where you can find more discounted deals online, especially on gadgets, will go a long way in helping you stay within your budget. 

In you planning you can use platforms like pricecheck.co.za or retailers’ online platforms to compare prices so that you don’t go in blind when you start shopping.

Naik says it’s important to stay focused on the day and think twice before you pay. 

“Take one final look at what you’re about to buy and pay for. If you’ve done your research, you should have a good feel for what counts as a well-priced item and what you can get for nearly the same price or don’t really need.”

He also advises you pay cash where possible instead of signing up for a new account or charging your purchase(s) to your credit card.

Rita Cool, certified financial planner at Alexander Forbes, says rather than blowing your hard-earned cash  on Black Friday “specials”, you should seriously consider investing your spare cash or using it to pay off debt instead of creating more.

“If your debt is under control, rather save towards an emergency fund or invest in your future,” she advises.

The experts agree that Black Friday and Cyber Monday can offer you some financial relief through the discounts offered but only if you are financially prepared or participate for the right reasons.

Knowing that the retail day comes around every year gives you ample time to plan for your retail needs and wants in this time. You should also keep in mind that an expensive month is around the corner followed by January with all its back-to-school and work responsibilities. 

Prioritising your needs over your wants and thinking twice before spending can stretch your money further this festive season.