Consumers should guard against reckless spending and buying any items that they do not absolutely need. Picture: CHRIS RATCLIFFE, BLOOMBERG, 2012 BLOOMBERG FINANCE LP

JOHANNESBURG - Consumers should guard against reckless spending and buying any items that they do not absolutely need as the country faces major economic and political crossroads, the South African Savings Institute (SASI) warned on Wednesday, ahead of the "Black Friday" and "Cyber Monday" shopping phenomenons.

South Africa has joined other countries in participating in "Black Friday", the informal name for the day after Thanksgiving in the US, the fourth Thursday of November, which is regarded as the beginning of the Christmas shopping season. More recently, the often frenzied shopping spree has been extended to "Cyber Monday".

SASI noted that the mining industry, Standard Bank, public broadcaster SABC and other workforces had been affected by significant job losses in a country already grappling with unemploment of over 27 percent.

"It would be wise under these circumstances to save as much as possible in a volatile environment. Do not spend money you don’t have on things you really don’t need,” SASI chairpeson Prem Govender cautioned.

“If you qualify for an end of year bonus, it would be better to pay off your debts and to invest the remainder than to squander it on TVs, designer outfits or a deposit on a new car.”

The savings institute said its annual festive season savings campaign had kicked off and was focused on making people aware of the interest rate they were getting on savings.

SASI said it had partnered with -- an independent price comparison website that offers a fast way to find the best savings account for the highest interest rates -- to encourage consumers to save money more wisely.

Over 16 million South Africans have cash in savings accounts, but South African Reserve Bank statistics show that about 40 percent of this money sits in low interest accounts or attracts no interest at all.

The savings institute, with the provincial offices of Consumer Protection and the Financial Planning Institute, plans to spend the month-long campaign conducting consumer education workshops in key strategic areas around the country. 

It will also visit various shopping malls as part of this year’s festive season campaign.

- African News Agency (ANA)