Maybe you have done everything right so far regarding the previous financial principles. You can see freedom from debt, you are managing your money well and investing it wisely.
How confident are you that you are getting the most value for your money or effort?
Are you earning as much as you should or could? Did you get the best price for your most recent purchase?
The 6th Principle of Financial Management is recognition that virtually everything is negotiable. Sadly for many they just don’t bother to ask! Why not? John F. Kennedy was once quoted saying: “Let us never negotiate out of fear, but let us never fear to negotiate.”
My life experience leads me to believe that fear is one of the driving factors why people do not try to negotiate. When I worked in the retail environment it was interesting to see that just a small percentage of my customer base would ever raise the question about flexibility in pricing.
How do you overcome fear of negotiating? Arm yourself with an education. Understand the business you are dealing with and learn as much as possible about the product, service or job you are negotiating for.
Regardless of the situation you must understand who has the upper hand or power in the negotiation. This is generally dictated by who needs the deal to go through the most. Unless you give up the power, in most purchasing situations you will have the upper hand. In most job interviews it may be the employer.
When purchasing products here is an insiders tip: 10% of something is better than no percent of nothing.
The statement above was one I heard from sales managers many times in my retail career. Granted, that was nearly 20 years ago but the same philosophy still permeates many companies today. In the current economic climate there is strong evidence that this attitude is more prevalent than ever before. While any business is trying to maximize profitability, profits are only possible if sales are being generated.
Over the years I have become less surprised how often just asking will get you a better deal:
- Clothes – Most sales staff are commission associates and have the authority to discount)
- Groceries – Often the cashier will have spare coupons lying around. On one occasion I had a clerk use her rewards card on her keychain to provide me with a better price
- Real Estate – Everything from the price paid to the documents fees are negotiable. Negotiate every step.
- Real Estate Taxes – If applicable, most states have a process available to have your home value reviewed.
- Banking Fees – Look at recurring monthly fees and even the bad-boy fees like overdrafts (these may not work more than once or twice!)
- Cell Phones – From activation fees to excess use.
Whether it is buying a car, or getting a new cell phone the internet can be a great source of insight on how to negotiate for a better deal. Whatever it is, prepare yourself by simply performing an internet search for: Negotiating ____Fill In The Blank____.
You never get anything unless you ask and by asking you will save tens of thousands over your lifetime.