Why Black Friday deals could cost you more than you think

As South Africans prepare for the annual frenzy of Black Friday, a day characterised by promises of 'unmissable' bargains and 'unbeatable' deals, it is easy to get swept up in the excitement. However, the reality is that many shoppers end up spending more than they intended, masking the truth that these supposed savings can significantly erode long-term wealth.

Rory Brachner, founder of Doshguide, a subscription-based service linking individuals with flat-fee Certified Financial Planners™, warns that the psychology behind Black Friday sales can be misleading. “We see 50% off and feel like we’re saving money, but what’s really happening is that we are often spending money we hadn’t planned to spend. The illusion of saving is one of the biggest threats to consistent wealth-building,” Brachner explains.

Black Friday has become one of the largest shopping events in South Africa, with retailers reporting significant spikes in sales. A recent statement from FNB revealed that transactions worth over R5.4 billion were processed through their Speedpoint devices on Black Friday 2024, marking an 11% increase from the previous year. Meanwhile, Nedbank also noted similar trends in customer transactions.

Brachner emphasises that it’s not about avoiding sales altogether; rather, it’s essential to shift from impulsive spending to intentional, value-based purchases. “It’s about taking control of how you spend so that your money supports your goals, not just your impulses. Reframe your thinking of a ‘good deal’ — it’s only truly good if it serves a real purpose in your life,” he advises.

Shoppers often justify their spending during these sales, but this pattern can undermine future financial prospects. “Each impulse buy, even if it seems insignificant, chips away at money that could have been saved or invested. These funds, over time, could have compounded into meaningful financial growth,” Brachner continues, underlining the importance of delayed gratification in wealth-building.

To navigate the upcoming shopping event wisely, Brachner shares five essential tips for smart spending this Black Friday:

• Make a list: Identify what you genuinely need ahead of time and research prices early. This will help you discern a true deal from a marketing gimmick.
• Use cash or debit where possible: Spending on credit can quickly erase discounts once interest is considered. If you can’t pay it off immediately, it’s not a saving.
• Avoid FOMO purchases: Just because “everyone’s buying” doesn’t mean you should too. Remember: deals will return, but debt can linger for longer.
• Apply the 24-hour rule: Before checking out, wait a day. If it still feels worthwhile after a pause, it probably is.
• Redirect your savings: Take the money you might impulsively spend and invest it. Even small amounts can add up over time.

Brachner explains that these strategies are not just about surviving the Black Friday sales, but about ensuring that consumers are truly prepared to make purchases that align with their broader financial objectives. “When you work with a financial planner, these moments can be woven into a broader financial plan, allowing you to spend consciously, free from guilt or negative repercussions,” he concludes.