PRINCIPLE 2: NEVER PAY FULL PRICE FOR ANYTHING
This is the 2nd part of a 7-part series on money, titled
“SEVEN KEY PRINCIPES TO WEALTH
It may seem like a logical statement, but do you know the importance of implementing the attitude of never paying full price?
I never pay full price for anything; unless it’s an emergency, or just a litre of milk. I only buy clothes when they are on sale. My car is purchased at a well negotiated price. My electricity and phone contracts are negotiated. My groceries are bought when on special and I only buy shares in companies, when they are at a heavily discounted price.
If you simply decide that you want something, then pay whatever price is listed at the time, you are throwing away thousands of dollars every year. To some, this may seem like overkill and a time waster, but let me tell you, for the small amount of effort; the benefits can be huge. By applying this strategy just on your weekly shopping, you can literally save hundreds of dollars each year.
For example: The brand of coffee that I buy, generally retails for $10, but every 2-3 weeks, it’s on special, for $6. I go through a jar once a month, so if I buy it only when it’s on special, that’s a saving of $48 each year. The moisturiser I buy, retails for $11, but, again, once every few weeks, it sells for $7. This gives me a saving of $48 each year.
If you apply this theory to most things, you will save more than one thousand dollars every year; with very little effort. The key is to keep any eye on what is on special. Supermarkets spend millions of dollars each year printing catalogues, which advertise their weekly specials. Most people throw them out, but if you take a few minutes each week to read them before going shopping, you will save so much money.
When it comes to non-perishables, always buy them on special. Even if you don’t need them right away. Buy them and store them, for when you run out. If I know that I’m going to run out of coffee by next week, but coffee is on special this week, I buy it.
Everyone knows this theory, but very few do it. If you’re a family of four, the savings will run well into the thousands. This money can then be allocated towards savings or investments; which we will discuss in later key principles, as part of this series.
When I buy clothes, I mostly buy my clothes in the end of year, or end of financial year sales. The exact same clothes are usually 50-70% off. If I want to buy something for the house, such as a new TV, mower, or appliance, I do a little research, note down prices, then wait for them to go on sale. You would be surprised, how often everything goes on sale. All you need is a little patience.
When buying a car, it is the same. I find the car I want, find out the ticket price, then wait for it to be on sale in the end of year sales. This is when car dealers desperately need to move stock, so you can bag a bargain. I always go to several car dealerships; and make it known, that I am doing so, then I let them fight it out, for the best deal. They usually kick and scream and make up stories, of how they are losing money; bullshit. Stick firm and be prepared to walk away, and they will eventually move closer to your asking price.
When it comes to buying property, this is an area, where people often let their hearts rule their head and end up paying way too much. My friend’s father told me, before I purchased my first unit, several years ago. “If you don’t offend them (The seller), with your first offer, then you have not gone low enough.”
All sellers (and car dealers), add on an amount to their price, to allow for negotiation. No matter how much you love the home, unless you have money to throw away, never pay even close to the asking price. If you miss out on that one, another one will come along and it will more than likely, be better than the one you missed out on.
Lastly, when I travel, I never pay anywhere near what most people pay for flights, cruises, hotels or anything. I don’t force the travel agent to eat into their commission, by screwing them down either. I used to be a travel agent, so I know, that their livelihood depends on commission.
Most people think that it is a travel agent myth / lie, when they tell you, that prices never get cheaper. While it was once true that you could get great last-minute deals (ten years ago), that is almost never the case, these days. Trust me, having worked in the travel industry, I have seen so many clients get irate, when they didn’t listen to me, when I said this, then their flights (that they didn’t pay for), got more expensive. This is why I always book my flights ten months out from my travel dates. That is when they are at their cheapest.
Cruises will almost always be at their cheapest, when the prices are first released. The cruise lines releases cabin prices somewhere around eighteen months prior to departure. This is when they are the cheapest. The only exception to this, is if cabin sales are very slow, on a particular voyage, and they want to fill cabins. Even in this case, you’re still looking at twelve months prior to sailing, that this occurs, so book as soon as you can.
Now that we’ve looked at your relationship with money (Key 1) and shown you how to save money each week (Key 2), in my next blog, we look at what should be common sense, but is the financial “Achilles heal” for most people.
KEY PRINCIPLE 3: Spend less than you earn
In the meantime, if you want to go into more details about these key principles, my book “Create The Life You Want” is available in eBook or Paperback formats.
