There is only one advantage to being an adult, and that’s shopping. Yeah, you may have to work till your eyeballs bleed to pay bills. But on the plus side, you don’t need to beg and plead with your parents for your new toy. It’s your money, and you can buy whatever the hell you want. But before you squander that hard earned cash, take some steps to make it a prudent purchase:
1. Check If Your Company Can Help
Okay, stop rolling your eyes and for one second would you? Too many people assume their company privileges end at toilet breaks and a water cooler.
Some retailers and wholesalers strike special deals with companies, as a way of building their customer base. Cherish Low, who works in a shipping-container firm, got a bargain on her laptop. She says:
“Luckily I asked my manager to inquire for me. As it turns out, one vendor gave discounts to our employees. I saved around $110, and I got an upgrade to Microsoft Office for free.”
Procurement officer Josephus Yap had a similar experience, when his company gave him an interest free renovation loan:
“At first I didn’t know we had these kinds of benefits. It really goes to show: If you don’t ask you don’t get. One of my colleagues was quite annoyed, because he went and paid his contractor before learning about it.”
2. Wait for Fairs and Expos
If you’re into electronics, you’ll know about trade fairs like Comex. Such events are the ideal time to buy, since the participating companies will launch special promotions.
For other products, we have events like the Robinsons Expo Sale, or the IFFS (International Furniture Fair Singapore). And when it comes to high-price furniture, it’s best to wait for a trade show than to buy in-store. A sales director, from one of the stores in Park Mall (Singapore’s furniture hub) told me this on condition of anonymity:
“We do not really give price discounts to passing trade. This is due to our buyers’ DMP (decision making process). If they don’t need a bed, they won’t buy one even with a discount. And if they need the bed, they will probably buy it even if we never mention any discount.
So we don’t offer direct price discounts very often. But at fairs and shows it’s different; we know everyone there is actively searching for alternatives, and that’s when we rely on pricing to draw them.”
3. Use Interest Free Credit Cards
If you’re buying a TV or two year gym package, you’r probably using a credit card. If so, try to find one with interest-free features. This can come in two forms:
The first is a credit card with an interest-free period. A lot of cards charge 0% interest for the first six months. If you’re within this promotional period, and can pay the whole bill before the promotion ends, go for it. A credit card eases the cash flow problems of big ticket items.
The other option is a credit card that allows interest-free instalments. For example, a card might allow you to pay for a $3,600 sofa in six interest-free instalments ($300 a month for six months). That’s cheaper than leaving a balance on the card, which grows by around 2% a month.
4. Commit to the Purchase
Marketing Manager Lawrence McKinnon tells me:
“We’ve done some surveys, not actual behavioural studies, but I think you’ll be familiar with what I’m explaining…
…you buy a cheaper alternative to the desired product, which is still kind of expensive anyway. Maybe you get a $700 tablet instead of an $800 one. Later you’ll be saying ‘Oh, what is wrong with me, I still spent a lot of money, but I’m still unhappy’.
And here’s the kicker: Most of these people later go on to buy that big ticket item anyway, maybe a week or a month down the road. Talk about wasting money.”
Accept that you’re buying something expensive. Shaving a few dollars off won’t remove the burden on your wallet. If you compare alternatives, base your comparisons on features and qualities. Not on the fact that one’s a few bucks cheaper.
Speaking of alternatives, remember to…
5. Be Frugal, Not Cheap
There’s a difference okay? Buying socks in bundles is frugal. Re-using your brother’s old socks and risking permanent toe-jam is cheap.
Frugal saves money, cheap costs money. Take a used car for example: If you get a decent used car, it saves you money. If you get a rust bucket that invites mockery from Trishaw drivers, you’ll probably be paying double the maintenance.
Apply the same principles when comparing alternatives: It’s better to pay $8,000 for a good sofa, than to pay anything at all for a crap one. And like I mentioned in point 4: A difference of a few bucks isn’t going to ease the burden.
Beware of alternatives that are cheaper due to lack of resale value, or reduced durability. Going back to our anonymous furniture expert:
“If you want cheaper furniture, buy really cheap. Don’t buy something that’s $5,000 instead of $5,500, because that $500 can mean a big quality difference.
For $500 less, maybe you’re getting laminates instead of real wood. It will last maybe five years, then it’s warped or stained. You have to get another one. Might as well you get the good one right away, which will last a long time and has resale value.”
Apply the same principle to any big ticket item. Compare the alternatives; but compare quality first and price second.
Got any tips for buying big ticket items? Comment and let us know!
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Tags: Credit Cards