Have you already squeezed every last penny out of your budget? Maybe not. Thanks to free market capitalism, we can choose from a wide variety of products at a wide variety of prices pretty much any time we want to buy something.
Unlike investing, saving money on purchases doesn't require any specialized training and is an easy way for anyone to stretch their budget a little farther.
No matter what your income level, you can give yourself more breathing room by becoming a savvy shopper. Here are five tips to help you get started.
Tip 1: Make the Store Your Last Choice
Most people's default response is to go to a store anytime they need something, but that's not the only way to obtain a needed item. Ask yourself these questions:
Can I get it for free?
If you don't need something right away, and you usually don't, it's worth searching on community ad sites like Craigslist or Kijiji, signing up with some local Freecycle groups, and asking around to see if anyone you know is getting rid of whatever you want.
Can I borrow it?
This tactic can be a great money-saver for any item that you use infrequently or will only need to use once. For example, if you only need to use a drill once a year when you change apartments and have to reinstall your curtain rods, you can get by with borrowing a drill from someone else. Many home improvement stores even have tools you can rent. Likewise, instead of spending money on the newest bestseller novel that you will probably only read once, head down to your local library and see if you can borrow the book. (New to budgeting? Check out Six Months To A Better Budget, Get Your Budget In Fighting Shape and The Beauty Of Budgeting.)
Tip 2: Negotiate When Possible
Some prices are set in stone, and it's a waste of time trying to negotiate with someone who won't budge. However, when you think there's some wiggle room, consider these strategies:
Can I negotiate a lower price?
While you probably can't negotiate the price on many items, like new DVDs or a package of gum, there are plenty of situations where you can negotiate, even in a retail store. For example, if an item is cosmetically damaged, a store may be willing to offer a small discount because that blemished items tend to be more difficult to sell. If a salesperson wants you to buy a bunch of extras with a new computer or cell phone plan, ask for a discount - the salesperson they may be allowed to offer discounts in order to close the deal on big-ticket purchases.
Of course, if you're buying an item from a private party, you can always negotiate. Also, you probably already know not to automatically pay the sticker price on a car or house, because negotiation is standard practice on these major purchases and the sticker price is generally higher than the real amount the seller will accept.
Can I barter?
Barter can be difficult because many people are not accustomed to doing it and it's hard to find someone who wants the service or goods you have to offer in exchange for the what another person is selling. If you have some valuable products or services to offer, however, and you're purchasing from a private party, it's worth asking. Even if the other party isn't willing to barter for the entire item, he or she may be willing to at least reduce the price in exchange for an hour of your expertise.
Tip 3: Time Your Purchase
If you wait to purchase something until you really need it, you're likely to pay the sticker price, but with a little advanced planning, you can save big bucks.
Will this item go on sale?
If you want an electronic good, you will probably have to wait patiently after it is introduced - a sale will emerge once a newer model comes out or the regular price will drop as supply increases and demand drops. As new items become more popular, even if they don't officially go on sale, you may be able to get a good deal on eBay. Certain everyday items, like groceries, toiletries and cosmetics, will always go on sale sooner or later, providing an opportunity for you to stock up when your favorite brands are priced at a discount. For anyone who doesn't closely follow the latest fashion trends, clothes are best purchased during end-of-season sales, even if it means you don't get much use out of them until the following year. (To learn more, read Patience Pays For Consumers.)
Might there be a coupon for this item somewhere?
Combine sales with coupons, and you'll save even more. For the internet-savvy, eBay can be a great source of coupons, such as 10 buy-one-get-one-free coupons (abbreviated B1G1 in eBay lingo) of your favorite deodorant. The coupons might cost you $2.50 total including postage, but if you use all 10 of them, your net savings on a $3 stick of deodorant will be at least $27.50 plus tax. If you have time to look through a few pages of content, then sites that offer free printable coupons, like Coupons.com could be a good option for you too.
When shopping online, search for the store's name plus "coupon code" before making a purchase. Many sites will advertise coupon codes to help give consumers a break. Sometimes you'll enter coupon codes to no avail, but sometimes you'll get lucky and get some savings like $5 off shipping fees or 20% off your entire purchase. It's always worth taking a few minutes to look.
Can I get a better price somewhere else?
It's usually a bad idea to buy an item at the first place you see it because it's very likely it is cheaper somewhere else. For expensive purchases where you have a lot to gain by comparing prices, and for situations, like online shopping, where it's extremely easy to compare prices, the savings you'll achieve are worth the extra time and effort.
However, if you don't stand to save much or are likely to waste a lot of time, gas and money by shopping around, don't bother. If you're pressed for time, you can avoid shopping around altogether by making a habit of doing all of your shopping at stores that regularly offer bargain prices, and you'll be confident that you're already getting a good deal.
Tip 4: Substitute
If the item you want to buy doesn't quite fit into your budget, think about similar but less expensive alternatives.
Is there something that doesn't cost as much, but does the job I need it to?
Figuring out the real reason behind a pending purchase can help you brainstorm ways to achieve the same result more affordably. For example, if you're worried about being bored during a long flight, you may want to buy a $125 spare battery for your laptop so you can get some work done.
In this case, your main concern isn't really getting more work done, but rather finding a way to occupy your time. Instead of buying that extra battery, you could use your laptop on the most energy-efficient setting until the battery runs out, and then spend the rest of the flight reading a library book.
Do I really want this?
Wish lists can go a long way toward preventing impulse buying. By keeping a never-ending wish list, a person is less likely to buy items that have not been contemplated for at least a month, which provides sufficient time to decide whether the item is a necessity or just a want.
If the mere prospect of saving money isn't enough incentive, consider the opportunity cost of buying an item. Maybe that new suit or purse isn't worth it when you could use the money toward going on a vacation.
Tip 5: Expand Your Shopping Universe
If you normally head straight to your favorite website, specialty store, or the mall when you need to buy something, consider these other shopping options that can save you a great deal of money:
Is someone personally selling what I need?
Garage sales, moving sales and estate sales tend to offer all types of merchandise at much lower than retail prices. You are most likely to benefit from this type of shopping experience for items that are not necessarily needed right away. For example, goods like canning jars, dishes or a jewelry organizer. This can also apply to more practical goods as well. However, don't expect to find absolutely everything at these sales, but do check them out from time to time to add value to your shopping budget.
