I want you to consider this week’s show ‘Basic Training‘… boot camp, if you will. The reason for this is because smart consumers, nay elite consumers, can make their money go about 5% – 15% farther than the general population. It doesn’t take an economist or a mathematician to realize how valuable this can be over the long term. Throw in the state of the economy over the past 18 months, and the benefit of stretching your dollars is even more significant!
As you listen the show I walk you through my time tested method of being a conscious consumer and a savvy saver. And, while it may not be as easy as walking into a store and simply making a purchase, I have no doubt that if you employ these strategies it will really start to add up!
STEP 1: Find The Best Deal
I fully believe that finding a great deal requires a specific skill set. Just like professional fisherman have a knack for finding that ‘monster’ of a catch, great consumers can have a knack for finding that ‘monster’ of a bargain. While I can’t teach you to have that penny-pinching second nature, I can provide you with the best tools out there to either (1) save yourself on the sale price or (2) get yourself some FREE money back. Listen out for these awesome sites you can use as a resource:
STEP 2: Don’t Leave Money On The Table
If you’ve listened to some of my more recent shows, you have no doubt heard me talk about rewards credit cards out there that (for now) allow you to earn a significant amount of cash back on everyday purchases such as eating out, grocery stores, and even putting gas in your car. If these are purchases you are going to make anyway, why not get anywhere from 1% – 3% back?
Currently, Microsoft and Google are in a war for market share. When mega-corporations like this battle to be the top dog, do you know who the ultimate benefactor is? If you guessed the consumer, you are absolutely right! Right now, in an attempt to really edge out the competition, Microsoft is essentially ‘paying to play’ by offering great cash back rewards for individuals who purchase products through Bing.com.
Another amazing resource is UPromise.com. UPromise is a service that allows individuals to save for college by automatically making cash back contributions to 529 educational savings accounts. All you have to do is register your credit cards or grocery cards, then, whenever you make an eligible purchase or buy an eligible product, anywhere from 1% – 5% is contributed to your child or grandchild’s college savings account. 100 bucks here and there over 17 or 18 years can really start to make a difference! UPromise is great for online purchases, grocery shopping, and even dining out! You would be surprised how many retailers and restaurants are willing to partner with UPromise. Check out their website for specifics and more information.
STEP 3: The Art Of The Negotiation
Remember that you are the consumer! In other words, you are the ‘demand’ side of the equation and retailers are the ‘supply’ side of the equation. Make them earn your business by offering competitive pricing. If you see a better price in a sales ad or circular, take that ad into you local brick & mortar and ask them to at least match the price. You may be surprised at how willing they are!
Another great way to negotiate is to leverage the deals on the internet at your local retailer. Make sure, however, that you do this during the initial purchase rather than after the fact because many price match policies have a specific exclusion for online sites.
Finally, use the appropriate credit card to protect your purchase and ensure that you get the best deal! Since Discover is offering 5% back on all travel (hotels, gas, and theme parks), you may want to use your discover card to book your next trip rather than using your Visa.
Michael says
July 19, 2009 at 11:16 pmHi Brian,
I just wanted to thank you for such a great episode!
I consider myself an extremely savvy consumer and very well-versed in Internet price comparisons, yet even I learned a few very useful things from this episode.
Keep up the good work!
Michael
Brian Preston says
July 20, 2009 at 7:44 amOne tidbit I forgot to add is that anytime you are shopping online, once you have determined the product you want and the vendor you plan to use, be sure to do a Google search for coupon codes. You will be surprised at how often this simple step will save you on shipping or possibly get you 10% – 15% off!
Randy says
July 20, 2009 at 4:56 pmBrian,
Thanks for the great tips. Can you provide more details about the specific credit cards that give you cash back on various categories. I’m having trouble finding some of the ones you mentioned. I’m really interested in finding ones with 5% cash back on restaurants, groceries and gas.
Thanks!
Brian Preston says
July 22, 2009 at 10:28 amRandy,
The card that once gave cash back on restaurants, groceries, and gas was the Chase Rewards Plus card. Unfortunately, this card is no longer available. The replacement to this card is now the Chase Ultimate Rewards Card. The benefits of this card are: 1% on all purchases, 2% additional for gas, grocery, and fast food purchases. There will also be quarterly additional bonus offers similar to that of the Discover More Card. I have yet to decide how I feel about this new card. I’m obviously disappointed because this is a far cry from my original card. I will keep you up to date as I see new and intriguing offers.
Peter says
July 22, 2009 at 8:40 pmI’m all for making the most of my money, but I have to question 2 of the items you mentioned in the episode.
1 – You mentioned you found the lamps for your wife’s 15+ year old mirror on eBay and saved about $15 on them. That’s great, but at some point you have to decide how much effort it’s worth. You saved $15 on something you apparently only need to buy every 15-20 years. I’d be more inclined to spend the time looking for ways to shave $5 a month off my phone or cable bill. That is going to provide more long-term savings. Saving $15 once every 15 years doesn’t really make a big difference in the long run.
2 – You mention getting brick and mortar retailers to honor Internet pricing. There is a fine line between being a savvy shopper and taking advantage of a merchant. The traditional retailer has additional overhead costs and is providing you the ability to purchase the item right there (rather than waiting to have it shipped). Obviously, that is worth something to you or you would have just bought it online and not bothered going to the store and trying to get them to price match. Making retailers match online prices cuts into their profits and will eventually lead to them raise prices or go out of business. Neither is good for the consumer. You may have noticed that since retailers like Circuit City, Linens and Things and others have folded, their competitors have raised prices and made their service worse. They now how less competition so they don’t need to be as customer-friendly.
Retailers are allowed to make a profit, and squeezing them too much and shopping solely on price creates a price-driven mentality where manufacturers only care about producing a product at the lowest price possible with no regard for quality, durability or service. If you think a retailer is charging too much, you are free to not shop there. Just because someone else is willing to sell it for less doesn’t necessarily mean you’re getting ripped off. If the other guy is offering such a good deal, why not buy if from them? There is obviously a reason you’d rather purchase from this specific retailer and if their prices are a little higher maybe that’s the premium you’re going to have to pay for the convenience, service or whatever else you value about them that makes you want to shop there as opposed to the place with the lower price that you’re not willing to just take your business to for some reason.
How would you like it if your clients kept coming to you and saying “I found a financial planner on the Internet who can create a plan for me for $100 less. I want you to match their price.” I’m sure you would tell them about the value and service you will provide and how that’s worth the extra money. Why aren’t retailers allowed to do the same thing? This is one of those situations where is seems great when you do it and “get a deal” but it would cause real problems if everyone started doing it with everything.
kent johnson says
July 23, 2009 at 1:31 pmHey Gang,
Great episode Brian. Three quick .02 comments…
– Since it dovetails so nicely into this episode, I thought I’d recommend the latest Kiplinger feature article and related podcast entitled “Steal These Deals” on savvy shopping.
– At the risk of being ‘anti-economic recovery’, imho the only thing better than buying something at a deep discount is postponing or avoiding the purchase altogether. The delayed gratification point should not be missed on this topic.
-The paranoid guy in me says… Identity theft is big business these days and can cost you your credit rating plus the time and money to clean up the mess left behind. When signing up for discount programs you are selling the vendor your privacy in exchange for some compensation. The more databases ‘in the ether’ that contain your personal information and habits, the higher the chances this information will be stolen and/or misused. I’m not suggesting we all go off the grid, just be aware of the risk and perhaps stick with a select number of name-brand merchants when in a ‘joining’ mood.
pascale says
August 4, 2009 at 6:14 pmBrian, great show. Great tools. I think for a future show, it would be nice to go over what you feel are the best of the best (credit cards, online banks, etc). We see these ratings all the time from Kiplingers, Money Magazine, etc. It would be great to see your constructive opinion. Thanks for all you do.
Mike/Colorado