Category Archives: Money

Purchases Where You Can Negotiate Pricing To Save Money

Many people are under the misconception that a price set by a seller is the price that must be paid by the buyer. While there are some cases where this may be true (you probably wouldn’t ask your grocery store cashier for a lower price on bananas), there are lots of purchases that you can and should negotiate. Here are some purchases you should pay special attention to:

Furniture

Although furniture purchases are often spread out over time, the contents of one’s home add up to some of the costliest purchases that individuals make. Even big-name retailers are willing to negotiate sales pricing on pieces of furniture. Some good bargaining here could be asking for free delivery, picking clearance items, or even buying more furniture – the store may offer a larger discount if, for example, you purchase a new mattress along with your new living room set.

Property and Rentals

Areas where there is plenty of supply and less demand offer buyers and renters additional negotiation power. Remember in these situations that price alone is not the only thing that you can negotiate. For instance, maybe you’re looking to rent an apartment. Maybe you notice that appliances are old and probably not energy efficient, you could let the landlord know that you’d be willing to pay the going rate if they were to upgrade the appliances. Often times they will! I’ve gotten pretty significant discounts when renting airbnbs just by asking!

Used Technology

Retailers and individual sellers generally don’t like to offer additional discounts on new products, however used items or “open-box” items are a different story. Shopping for phones and laptops at pawn shops, repair shops, or on craigslist give the buyer additional leverage to negotiate a lower sale price. If you notice a seller has many of a certain model available this could be a sign that they’re not selling as many as they’d like- and that they’d let some go for a discount. Additionally, point out any scratches or blemishes that you see and let the seller know that you could live with the defects if the price was lower.

Anything And Everything On Craigslist Or Other Peer-To-Peer Marketplaces

Don’t let the tagline “price is firm” scare you. You should always make an offer lower than the listed price and see how the seller responds. They may accept your offer, meet you in the middle, or reaffirm that that the price is not-negotiable. Decide how much the product is really worth to you and move forward by either making the purchase or moving on and finding something else. It never hurts to ask!

Bonus Tip

An often-overlooked negotiation tactic is method of payment. You should ask the seller what method of payment they would prefer that could get you the most favorable terms. In some cases, this will be the all-powerful C-A-S-H, or in other cases the company may offer incentives to use their in-house financing. The salesperson is more likely to lower the price if you pay in the way that benefits them the most.

Conclusion

One of the reasons often listed by people that choose not to negotiate is that they are afraid the salesperson will be insulted or get angry and refuse to sell to them altogether. Generally speaking, this is not the case. A general rule of thumb that is advised is to always remember that the salesperson really wants to sell you the item in question. There is probably a stop-limit price which they cannot go below, but the list price is almost always well above that limit. Accordingly, you should negotiate final sale price whenever you can to save money!

Saving Early is Better than Saving Often

It has been said that most Americans are just one paycheck away from bankruptcy – Basically, if they miss one month’s salary, they would be unable to recover. The problem is that most people have a mortgage to pay, several credit cards and many small loans. Add in the day to day-to-day expenses of living and you’ll see why there is a problem.

The Light at the End of the Tunnel

It’s not all doom and gloom, however. As long as you understand why the situation can end up getting this bad, you can avoid getting yourself into the same sort of trouble.

In fact, if everyone used this mantra more often, “Save not Spend,” there would be a lot more financially secure people in the world. That’s not to say that you have to become a miser – after all, you work hard for your money, you are entitled to benefit from it – you just don’t want to end up in a few years feeling as though you only work to pay off your debt. By getting ahead of the problem, you’ll be putting yourself in a much better position, as you’ll see in a second.

Compound it All!

To understand why it is so important to start saving money as soon as you are able, it is important to understand the concept of compound interest.

When it comes to simple interest, the interest that you receive is based only on the amount of capital that you originally invest. If that interest is then reinvested with your capital amount, you earn interest on both the capital and the interest added in and the interest is said to be compounded.

Compound interest is easiest to explain in a table – for this exercise, let’s assume that Julie and Sarah are two 25 year olds. Julie contributed $5,000 per year and earned 8% interest per year. She invested for just 10 years, until she was 35 years old. Then, she sat back, relaxed, and let her money do the work for her for the next 30 years while she spent her money on other things.

Sarah waited 10 years to start saving, but to make up for it, invested for the next 30 years, with the same $5,000/year contribution and 8% annual interest. In the end, Sarah contributed a whopping $150,000 while Julie contributed just $50,000. So who had more money at the end of 40 years?

It sounds crazy, but Julie actually outsaved Sarah by a significant margin, despite only investing just a third of what Sarah contributed. The important lesson here? Saving early is even better than saving often! Check out this table to see what happened.

What to Take Away from This

The lesson here is to start saving now – make saving a priority for you. If you do have credit card debt, repay that first as the interest rates charged are a lot higher than the rate that you’d likely receive from investing. Once that is done, your aim should be to get to a point where you are saving around about 10% of your salary. Retirement funding can help you to qualify for tax breaks, allowing you to sock away even more of your money for the future.

Once you get into the habit of saving your money, it will become easier and easier and you won’t miss it. Forget about just having 3 months salary saved, carry on saving for as long as you can so that you can truly start to build wealth, or, at the very least, avoid being forced to work until well after you would like to retire. Do your best to invest as early as you can. You can try and make up for it later by investing more or investing longer, but there’s no replacement for time!

10 Clever Tips to Avoid Buyer’s Remorse

Have you ever bought something only to feel the pangs of regret a few days later? Here are tips that will save you from that dreaded feeling. How many times have you bought something and then regretted it later? I've done it too many times to count!Have you ever bought something only to feel the pangs of regret a few days later? You were experiencing buyer’s remorse, a feeling of regret or guilt after making a purchase. People think that buyer’s remorse only happens with expensive items like a home or car purchase, but any purchase carries the potential for regret. Here are some ways you can prevent it from happening to you.

Don’t buy on impulse. Unplanned purchases have the biggest risk of buyer’s remorse, but you’re less likely to experience these feelings if you take a day or two to think before making a purchase, especially a big purchase.

Weigh the pros and cons of the decision. Thinking through the reasons you should and should not make a purchase can prevent you from regretting the decision later. By the time you finally decide to make the purchase, you’ve already rationalized the downsides and accepted that the benefits outweigh the cost.

Evaluate less expensive alternatives. If you can find a lower-cost option, not only can you avoid regret, you also feel a sense of accomplishment by saving money. You might ultimately decide against the alternatives, but you’ve at least weighed your options and made an informed decision to go with the higher-priced product.

Consider the opportunity cost. Sometimes buyer’s remorse isn’t about the purchase you made, but the purchases you could have made if you hadn’t already spent the money. Before you buy, consider whether there’s something else you’d rather spend your money on.

Put it on a credit card with the most benefits. If you use a credit card for your purchase, pick the one with the best perks. Rewards give you a little something extra for your purchase. Perks like refund guarantee, purchase and price protection, or extended warranty may come in handy if you later regret your purchase.

Don’t buy the first model of a new product. Unless you’re an early adopter who likes to try new products, it’s probably better to wait until the second or third version of the product. That way, the manufacturers have a chance to work out the product kinks and you get a more reliable version of the product.

Read the reviews. It’s easier than ever to read reviews on products. Type the product name + review in a search engine and read through the good and bad reviews to get an idea of what other consumers think about the product.

Check your budget, savings, or credit limit before buying. Make sure you can afford the purchase before you proceed. Don’t empty your savings or emergency fund for a purchase – you’ll regret it if an emergency does crop up.

Buy for the right reasons. Make your purchase only because you want to and can see how it will benefit you, not because there’s a great offer, everyone else is buying, a salesperson pressured you, or you’re afraid of missing out.

Know your return options. You may not be able to avoid buyer’s remorse, but you at least want the option to return the product if you don’t like it – assuming it’s not a consumable product. Give more consideration to the purchases that are more difficult to take back.

If you’re not sure you should make a purchase, walk away, at least for now. Give yourself time to think through the decision and compare products. Wait until you feel good about the purchase before you make the buying commitment.