This month's challenge comes from Gwendolyn Pearce, who would rather be doing almost anything else than buying a car.
Each month, we've been giving you financial challenges. Big or small, that's up to you. But we believe that exercising these different financial skills will help to open up new possibilities of earning and saving. This June, we're challenging readers to negotiate something.
“You like it?” the man asks.
“Yes, it's very pretty.”
“I'll give you a good price…”
And this is how the haggling dance begins. For me, it's something that I'm (relatively) comfortable with — as long as I'm out of town. The anonymity of being a tourist makes it far easier to play this game where I only have a small window of time and a single bill in my pocket. But what about haggling back on my home turf?
If there's one thing that the Great Recession has really highlighted, it's that everyone is looking to save money. If it was ever considered desirable to be one of those people who ignore prices and pretend that money is no object, it's certainly not fashionable now: it's just foolish. No one begrudges you for wanting to save money.
Even though we all have a common goal of saving money, if you live in the U.S., negotiating over prices in stores is not standard practice (though raise your hand if you've asked for a discounted floor model!). I don't know of anyone who has offered the grocery store manager a lower price on their pork roast and walked away three pounds of pork richer. We do, however, regularly negotiate over some utilities, such as cable and phone, car prices and job salaries.
What other opportunities do we have to negotiate? Honestly, just typing that sentence makes me squirm. As much as I want to save money and my brain understands that this is a good thing to do, I just hate to negotiate. Why? What am I so worried about? I'm worried that…
- I'll look cheap. Not financially smart, budget-savvy or frugal, just cheap. In my mind, “cheap” means that you don't have realistic expectations of what the other party must give up in order to achieve your goal. For me, cheap is as bad a word as greedy.
- I'll fail miserably. I'll be the person in the movie who ends up paying more than the sticker price due to a slick-talking, hard-nosed negotiator.
- I won't get what I want. I really, really, really want that car/job/dining-room table. What if I want too much and they pack up their toys and leave?
- I'll get flustered. Red-faced, panicky and stuttering is not a persuasive tack.
So what are you going to do about it?
After reading many of the negotiating tips listed here and in GRS articles, I took another look at my behavior when I successfully haggle:
1) I'm a tourist. I'm never going to see these people again. I don't care what they think of me.
2) I'm fine walking away. I've already decided the value of the thing/service and how much I'm willing to pay.
3) I'm cool and confident. When the first two points are in place, I'm much more relaxed and detached. It seems that would provide me more power during the transaction.
How can I take these behaviors and apply them when they matter most There's no quick fix; obviously, I need more practice.
I'm starting small, but in June, I plan to negotiate the price of all my farmers' market purchases. And since mobile payments are becoming more and more common at these events, I'll also ask if there's a discount for cash. Since the stakes are so low, I'm not heavily invested in the outcome. This will help me stay relaxed while making my play.
Also, I've planned for a financial health day this month. And while I'm home alone, I'll call and renegotiate my home and auto insurance. It's over the phone, so it removes the pressure of keeping my body language cool and calm. And since I'm just some voice on the phone, the person on the other end can roll their eyes all they'd like; I won't mind a bit. While I'm not certain it will actually amount to anything, if it does, I win. If it doesn't, then I'm not out any money, but I've gained some experience, so I win again.
Where are some areas in your life that you could benefit from negotiating?
How will you practice negotiating something this month? Even the smallest exercises can help you prepare for a negotiation that could have a big impact on your finances. Share your negotiation stories with us this month.
Author: Ellen Cannon
Ellen Cannon was the editorial director of the financial services sites at QuinStreet from 2010-2015. She has covered personal finance for magazines and websites for more than 20 years, including five years as managing editor of Bankrate.com. She lives in South Florida with her kitty and sunshine.