By Megan Pacheco
Do you ever make financial decisions in a hurry?
Many of us probably make more financial decisions in a hurry than we’d like to admit.
Whether it’s small items like clothing and food, or bigger items like cars or cell phones, we tend to get in this “have to have it now” mode, and passions take over all logic and sound judgment.
The only cure for “frenzy spending” is to slow down and do your homework in order to get the best possible deal on the item. Overpaying is not smart, and it’s really unnecessary; so here are few ideas on what you can do in order to become a smart consumer.
Most of us use credit in order to purchase a car. As with any large purchase, knowledge is power, so arm yourself with knowledge before you start shopping:
– First, understand what payment amount your current budget can handle without stretching it too thin. Establish an amount and stick to it. Use an online budgeting app to help you establish and track those boundaries!
– Consider various vehicle types and compare consumer reports on each make and model.
– Use websites like kbb.com in order to determine what you should expect to pay when you purchase the vehicle from a private seller or from a dealer. Print those numbers out and have them handy during your negotiations.
– Shop around for best interest rates on a loan. You’ll often get a better rate at your local credit union or even from your local bank than from a dealer, so do not settle for the first interest rate that’s offered to you! As a simple example, if you borrow $10,000 at 10% for 5 years, you’ll end up paying a total of $12,748.20. If you increase the interest rate to 15% you’ll end up paying a total of $14,274!
– Be aware of the “extras” the dealership will try to sell you. Those extras will be sold to you as “must haves” and could cost you quite a bit. Be comfortable with saying NO.
– Finally, be ready to negotiate. Know what others are selling this vehicle for and ask for price match or even a slight discount in order for a dealer to secure YOUR business! After all, it’s not the dealer that does you a favor by selling you a car. You’re doing them a favor by giving them your business.
Shopping for Appliances
Things break; it’s a given. If we planned well enough, we should have an emergency fund set aside to cover a broken dishwasher or a broken dryer. But what can we do if we have no reserves set aside?
– Tap into your network of close friends and family members and ask if someone has a slightly used appliance for sale. Buying a used or refurbished appliance, especially one that’s been well taken care of, is not a bad idea, especially if you’re strapped for cash.
– Check your local stores for floor models or discontinued models. You can often get those at a pretty good discount.
– If you have good credit, you may consider opening a store account in order to take advantage of the 0% interest on your purchase. Just make sure you charge nothing else on this store card until you pay your appliance off.
– If you plan to use your traditional credit card, first check if it offers an extended warranty on such purchases. Stores will often try to sell you extended warranties, but why pay twice if your credit card already offers you that coverage!
– Did you know that large home improvement stores will often compete for your business by matching prices and giving you an additional discount? So don’t be shy about asking. It’s your money!
– Lastly, read consumer reports about the brands you’re considering. Paying a top dollar for the latest color or for a certain brand may not be worth it!
My husband and I recently upgraded our phones through our cell phone carrier. We lost money on the deal. You know why? Because we were so excited about getting our new phones that we took the in-store trade in instead of selling our old cell phones privately! Yup, BIG mistake!
– Before you decide on the upgrade, check a few sites like: gazelle.com, NewtonsHead.com or nextworth.com to see what you can sell your current phone for. Compare that price with the in-store credit and take the option that offers you the most money!
– Don’t assume that doing your upgrade in-store will give you the best deal. Compare your upgrade options with places like Radioshack in order to make sure you’re paying the least!
I hope you can see that hurrying is a bad, bad idea when it comes to making smart purchases. Pause and do your homework in order to keep more money in your wallet!