Sebastien Alexanderson, Head of National Debt Advisors
With Black Friday just around the corner, South Africans are gearing up for a deluge of discounts and deals. But beneath the excitement lies a deeper question: Why do we often buy things we don’t need? Understanding the psychology behind spending can help us navigate this shopping season wisely, especially in today’s challenging economic climate.
Sebastien Alexanderson, Head of National Debt Advisors, shares insights on the psychology behind spending and offers practical advice to help South Africans navigate the sales without compromising their financial health.
“Black Friday is a double-edged sword. While it offers an opportunity to save, it can also push consumers into financial traps if they’re not mindful of their spending behaviours. Awareness is critical to making informed decisions,” said Alexanderson.
He said spending decisions are rarely purely rational; emotions and psychological factors deeply influence them. Joyce Marter, a Licensed Clinical Professional Counsellor, explores this in her article The Psychology of Emotional Spending: What it is, why we do it, and how emotional intelligence can help.
“One significant factor she highlights is Compulsive Buying Disorder (CBD), which affects approximately 5% of the population. Younger individuals and women are particularly at risk. The impacts of CBD are far-reaching, including financial strain through mounting debt, reduced savings, and even bankruptcy,” said Alexanderson.
“Emotionally, compulsive buying often leads to stress, anxiety, and depression, while socially, it can strain relationships and result in hoarding behaviours. Mental health conditions such as ADHD, anxiety, depression, and certain personality disorders further increase susceptibility to impulse buying,” he said.
Additionally, Alexanderson explained, retailers are experts at leveraging psychological triggers to drive sales. From using bold, urgent colours like red in advertisements to creating a sense of scarcity with phrases like “limited stock,” the Black Friday environment is designed to elicit impulsive behaviour. “Retailers understand how to create FOMO (fear of missing out) and urgency, which overrides rational decision-making,” says Alexanderson.
“Understanding these tactics helps consumers regain control over their spending.”
In the South African context, this year’s Black Friday comes amid a cautiously optimistic economic backdrop. The South African Reserve Bank last week announced the reduction the repo rate to 7.75%, lowering the prime lending rate to 11.25%. Inflation dropped to 2.8%—below SARB’s target range—but economic pressures persist, with ongoing reforms in electricity and transport expected to improve growth prospects.
SARB Governor Lesetja Kganyago highlighted the need for structural reforms to strengthen the economy. However, global risks, including high international interest rates and a weaker rand, call for cautious financial decision-making.
A poll run by BusinessTech last week revealed that 51% of South Africans plan to skip holiday travel due to high costs, emphasising the need for prudent spending during the festive season.
To avoid falling into the traps of emotional and impulsive spending, Alexanderson offers these tips:
1. Recognise emotional triggers: Reflect on why you’re making a purchase. Is it a necessity or an emotional response?
2. Set clear goals: Write a shopping list and stick to it. This minimises the risk of unplanned spending.
3. Create a budget: Decide how much you can afford to spend and avoid exceeding that limit.
4. Avoid credit: Use cash or debit cards wherever possible to avoid racking up interest on purchases.
5. Pause and reflect: Step away and think over purchases, especially big-ticket items, before committing.
“Emotional spending doesn’t just impact your wallet—it affects your mental health and relationships too,” Alexanderson notes. “Black Friday is an excellent opportunity to buy smart, but only if you approach it with discipline and awareness.”
ENDS
