In order to aid your navigation of the website I created a one stop shop for my best posts on Haggling!

The Rules of Haggling

Haggling Builds Self Confidence

Ten Pointers to Successful Haggling

Also be sure to check out some of my other Personal Finance Favorites!

The 7 Effective Habits of Highly Frugal People

Ten Tips for Saving Money on Gas

What Makes a Millionaire

Thanks for stopping by! I hope you enjoy!

-Daniel P. Bowen

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Why develop rules for something that is essentially every man for himself? Because with the economy where it is, the consumer has great power, and as we all know, with great power comes great responsibility. So if you want to be a responsible haggler, try out the rules below.

• No Lying.  Remember that salespeople CAN get in trouble by lowering a price for you, so your lie could potentially get a person fired. Plus it’s just bad karma.
• Don’t haggle unless you are prepared to buy. If you spend time haggling with a salesperson, you had better be prepared to buy when you get your price. If he agrees to your price and you don’t buy, you are flat out wasting his time when he could be selling to other people at higher margins. Plus your chances of being able to work with him again drops and he is less likely to budge on price with other people because it didn’t get him a sale.
• Walk if you don’t get your price. If you are trying to haggle and it doesn’t work you should thank the person for the time, accept it and leave. Haggling doesn’t always work, but if it doesn’t work and you purchase anyway, you are accepting defeat.
• Be courteous. Remember, no one owes you anything other than to let you buy the product at it’s marked price. Buying in a retail store is not like buying a car, where you constantly feel like they are trying to gouge you. Being civil and fair is the key, so don’t be pushy and always be grateful, even if it is thanking the person for their time when you leave.
• Be a good customer. If someone gives you a good deal, let them know that their faith in you was not misplaced. Go back to that person the next time you shop, but still expect another deal. Also, don’t haggle with the person every time, you don’t want the guy that really hooked you up to dread seeing your face again because you are going to try and milk another deal. Relationships are always key in haggling.
• Remember that you don’t always need to haggle to get a good deal. There are many ways, aside from haggling to get a great deal. Check out Secrets of a Bargain Hunter to find out how!

These rules may not only be key in helping you get your price, but they also ensure that the salesperson doesn’t have a bad experience with someone trying to haggle.

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In other cultures around the world, you are considered stupid or odd if you don’t talk money. In most parts of the world if you buy something without haggling the salesman will probably make fun of you for being a sucker as soon as you walk away. In America haggling is only considered acceptable in 3 scenarios. The first scenario is if you are buying something from a street vendor (like in New York), the second when you are buying something off of craigslist, and finally, haggling is OK when you are buying a big ticket item like a car or a house.

For some reason society has deemed it alright to negotiate and talk money in these scenarios, but if haggling is acceptable in these scenarios, why isn’t it acceptable in your daily spending? If just by asking for a discount you could get one would you go against this social norm?

I frequently go against this norm, it doesn’t always work, but when it does it feels great. Think about it from the salesman’s perspective, if 5% or 10% off will close the deal and allow them get on to helping the next customer why not? And if 10% off saves you $5 will it be worth the awkward moment? The worst thing that could happen is that they will say no.

Talking money does not only mean haggling, it means sharing your salary, something strictly forbidden in America.

In other cultures sharing your salary is not about bragging, it’s just normal everyday conversation. Xin Lu over at Wise Bread wrote a great post about how her Chinese culture influences her money habits. In the post she talks about how her father once helped a friend get a 20% raise, something that would not have been possible had they not been talking about salaries.

If by sharing your salary a friend could tell you that you are undervalued and try to help you get a higher salary is it OK? If you got a 20% raise I’m pretty sure you’d think so.

Recently I started a new job, and by talking about the offered salary and benefits of the job with someone else, that person helped me to effectively negotiate the offer . Does it feel odd for me to know that someone else knows my salary? Yes a little, but the person who helped was glad to do it and I am extremely grateful to him for it. Sure, at the end of the day I was the one doing the negotiations, and yes, it was a bit awkward, but it was well worth it.

The point here is that Money shouldn’t be taboo. Not everyone is rich, and there is nothing wrong with that, but our culture has ingrained in us that money separates us and defines us. Nothing could be more wrong. Money is something that needs to be talked about by more people, finances cause people more stress than anything, and they are the number one cause for divorce; but if we would all be more open about money we might be able to help each other and it could all change.

Do you talk openly about money? Why or why not?

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The following is a guest post by my wife, Mary.  My comments are in bold.

Health Insurance is a privilege, something that shouldn’t be taken for granted, but also something that is earned by many as a benefit of being employed by a company that shells out thousands of dollars per employee to subsidize the insurance and ensure that their employees are taken care of. Despite whatever plan an individual chooses the basic concept remains the same; pay co-pay up front to obtain services from your doctor of choice (either in-network or out-of-network).

I consider myself to be a healthy person who exercises, maintains a good weight, eats well balanced meals, and listens to my body. But along with these habits comes another money saving and sometimes even life-saving choice to have annual physicals with my primary care doctor. In physicals the doctor runs blood work, checks for cancer and overall health. Being in my twenties, my health is something I want to stay on top of in order to treat any possibly issues now before they could become a huge roadblock. Aside from that any early sign of cancer could save my life, let alone $$. Unfortunately, this is something that many Americans opt out of to cut costs but something relatively inexpensive considering the potential health complications that could spiral out of control if not caught sooner rather than later. Preventative Healthcare is not something that should be taken lightly, even if you think you are healthy.

At my most recent physical this past December I paid my $25 co-pay and left as usual. Surprisingly this past week I received a bill from my doctor’s office for 2 lab tests totaling to $160. I was about to call their office with my Flex spending card in hand when I thought that maybe I should speak to my insurance company about why they didn’t cover these 2 tests. They didn’t seem out of the ordinary to me and I was “in-network.”

After spending a total of 30 minutes between talking with my doctor’s billing office and then my insurance company, the insurance company finally admitted their “mistake” and I was able to save myself $160. I was furious that my insurance company was “cherry picking” my health bills. When challenged the operator from the insurance company actually agreed that if I had not called to dispute the charges I would end up flipping their bill because of a “mistake.” So although having health insurance is a privilege, just realize your health care provider might try to cut corners any way they can and it is up to you to clean up their mess.

Mary’s story exemplifies being “On The Ball,” one of The 7 Effective Habits of Highly Frugal People . By knowing what our insurance covers, she successfully challenged a charge and ended up saving us $160!

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Maintenance.  In a world where quality has declined, and new products are cheap, frugal people go out of their way to take care of every purchase as if it’s an investment.  And they know that spending money on maintenance is less expensive than spending money on repairs.

• They maintain their bodies.  Did you know that fit people get sick less than non-fit people?  Which means by taking care of your body you can save a great deal of money in doctors bills!  They also find frugal ways to work out: Run, Walk, Stadium Steps, the list goes on.
• They follow a maintenance schedule for their car and house.
• They check to see if something can be fixed before they buy new. You’ll be surprised to realize that more often than not things can be fixed.  The soles in my nice dress shoes were completely worn out, but I took them to a local cobbler, and for $15 they are as good as new!  

Make instead of buy.  Frugal people understand markup and know that they can easily make many things instead of buying them to save a great deal of money.

• Mary and I make most of our meals instead of eating out.  Just by taking our lunches to work we figure that we save at least $250/month.
• Instead of spending $80 on a particular medicine ball for our workouts, I made one using an old basketball, sand, and a tire patch, now I have the same thing for about $70 less.  It’s not as pretty, but it’s just as functional.
• Here’s a list of 100 Things You Can Make Yourself, some of them are very random, but it’s interesting to learn what you can make with household products.

Set a budget. Frugal people track their money and set priorities, because being Frugal isn’t about not spending money (that’s called being cheap), it’s about prioritizing where you spend it and where you save it to have balance between to two.  They think long term and know why they are prioritizing and saving.  They will occasionally splurge with their discretionary spending, but it’s something that they plan on doing.  They also tend to budget on meaningful things like a nice family vacation, instead of spending money on stuff.  By setting a budget frugal people are always aware of their financial standing.

• Check out 13 Tools for Building a Better Budget to get a good grasp for budgeting.
• Also, check out Mint.com, it’s an online budgeting tool aimed at Gen-Y that will send you text messages or e-mails when you go over budget on something, when your bills are due, or when you get charged a bank fee!  We’ve been using it for about a year, it’s a great tool.

Research. Frugal people know that they can’t avoid spending money, so when they do buy something, they research it first.  Frugal people spend money on quality that will last, they don’t go right for the cheapest thing.  So spend time researching, and looking for the best deal.  As a general rule of thumb my Finance Professor taught me, spend an hour of research for every thousand dollars that you spend.  I think this advice is pretty fitting, essentially, the more you spend, the more you should research (but remember to value your time!).  Here are some great research aids for you:

• Fatwallet, the forums on this site are a great resource for finding deals.  It may take you some time to learn the lingo (PM= Price Match, YMMV= Your Mileage May Very, B&M= Brick and Mortar store, FS= Free Shipping…), but you’ll be sure to find great deals in their Hot Deals section.  Also check out the Finance Section for great financial tips, and the Deal Discussion section for great tips on buying cars and houses.
• Edmunds is a key resource for all your car buying needs.
• Bankrate is a site dedicated to finding the best rates on Mortgages, Auto Loans, Home Equity Loans, Savings Accounts…

Coupons. Frugal people know that 35 cents here and 50 cents there really starts to add up.  They also know how to combine coupons with credit card rewards and/or haggling to save even more!

• Buy the Entertainment Book, spending about $30 on this book (if it’s available in your area) can save you hundreds throughout the year.  It has coupons for everything from groceries, to movie tickets, to dinner.  In fact, when we go out, we check to see if we have a coupon from the Entertainment Book first!
• Subscribe to the Sunday paper, it’s full of great coupons!  We pay $7.50 per month to get the Sunday paper, and easily save at least $5.00 per week in coupons!
• Learn how to combine coupons with rewards programs, like learning how to make CVS work for you!

On the Ball. Frugal people are on the ball by being organized and informed.  They don’t just use the paper for coupons, they actually read it too!  How does staying informed help you be frugal?  It makes you aware of where rates are at so that you might be able to get a higher return on your money, or a lower rate on a loan.  It allows you to follow legislation that might have a direct effect on you. Staying organized is also a key aspect, if you aren’t organized, you aren’t ready to act to make sure you lock in that low rate on your mortgage refininance, or you can’t find the coupon you need to make use of the CVS cash back. Only informed people can make informed decisions, and only organized people can act quickly enough to make the move.

Understand Needs vs. Wants. Frugal people understand what is a need and what is a want, and they ask themselves if something is a need or a want before making a purchase.  Do you want something really badly?  Prioritize and save for it, you might be surprised to see that the desire to purchase will pass.

• I am writing this from a 6.5 year old Powerbook.  Do I want a new mac?  Absolutely, but I maintain my computer and it still functions perfectly for what I need it for.
• I drive a 10 year old Acura with 150,000 miles, and yes, I want a new car, but I absolutely cannot rationalize it.  It’s paid for, it runs great, I can work on it myself (unlike many new cars with which the manufacturers have made it nearly impossible to work on yourself).
• I want to finish outfitting our garage as a gym, no we don’t need it, but Mary and I see an ROI in our health (body maintenance) so we are slowly gathering things from Craigslist, and finding good deals at specialty shops. We understand that this is a want, but it is a priority for us, so we are pursuing it.

I hope that you will be able to form some of these habits and become more successfully frugal!

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• The more you buy, the more of a discount you can get.  Mary and I went shopping for a new TV for her parents at Best Buy, and I allowed them to sell us more stuff because they could discount other items more.  All in all, her parents bought a 46″ LCD, a 26″ LCD, a PS3 (Blue Ray player), a sound bar (If you can’t have wired surround sound, this is the next best thing), and an HDMI cable (DO NOT BUY MONSTER CABLES.  They are a rip off, I don’t care what the salesman tells you.  If you need cables, go to www.monoprice.com or look up blue jean cables).  All in all we saved about $1000 because I was able to haggle and bundle with extras.

• Talk to the manager. Some stores are giving employees the power to knock off 10% or so, especially in the current economy, but it’s still better to haggle with a manager.

• Ask what you might think are stupid questions.  Even if there are no sale signs posted, ask if there is a sale going on, when a sale will be going on, or if there is a sale price they can give you.  It allows a good entry into haggling.  They may tell you that the item will go on sale next week so it might be best to wait, but that gives you leverage to ask them to discount it now.  It also breaches the subject of a discount nonchalantly.  If they discount it or give you a “sale” price, ask them if they can do better!  I asked the manager at Best Buy 3 different times if he could do better, and on the 3rd time he finally said no, he couldn’t, the computer wouldn’t let him discount it any more.

• Look for floor models or imperfections.  Mary and I were at Crate and Barrel looking for things for our new house and we found a lamp we liked that was a floor model and had a scuff.  I asked the questions in the previous step, and she said she could give us 20% off for a ‘damaged’ item.  The item is by no means damaged, and we knew we could get the scuff out, so we said great!

• Ask if there are any discounts or coupons that you could use.  Many stores have mailers that contain coupons, and most have them behind the counter to scan to help entice you into buying.  If you don’t ask you won’t know.

• Let them know that you usually shop there. Customer loyalty is a huge plus!  The woman I haggled with for my running shoes was obviously more willing to talk discounts after I mentioned that my current shoes were purchased from one of their other stores.  She then pulled out a mailer coupon to give me a discount!

• Be likable.  Last summer when Mary and I were working on our current place of residence I needed paint and paint supplies so I went to Sherwin Williams.  The salesman was younger and I was cracking jokes.  When I got up to the counter, I half-jokingly said “are there any: I just graduated from college, moved cross country, don’t have a job, and am about to get married discounts?”  He laughed, and said absolutely.  He gave me 30% off!  Also, don’t be pushy.

• Walk Away.  If you aren’t getting the deal you want, don’t be afraid to walk away.  This advice is particularly good to use on hungry car salesman, but car buying is a whole other beast.

• Offer Cash.  Cash is a huge bargaining tool.  It shows that you are serious and ready to buy, it also means a great deal to smaller shops.  Small shops will be more inclined to discount your product(s) more if they know you will pay cash.  There is nothing worse than discounting a product and then seeing another 2-3% of the purchase price go to credit card processing fees.  Don’t worry about your precious credit card points when you haggle, just worry about price.

• Research.  If you aren’t sure about a product get the salesman’s card go do your research and come back.  Also, see a related post: Secrets of a Bargain Hunter.

These tools will most likely allow you to get some good discounts.  Use these pointers wisely, and always be prepared to buy when you get a discount, if you get your price and decide not to buy, it could discourage the salesperson from coming down in price for the rest of us!

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When I was younger I had very low self esteem, there was no reason for me to be shy and scared to talk to girls, but I was.  I was scared of them saying no, or even worse, laughing at me.  I’m not a bad looking guy, but this fear was very real.  My older brothers would try to help me with this by bribing me to go up to girls and ask them out, but I only successfully did this once…and by successfully I mean I actually asked the girl out; she said no.

The only reason I met my wife is because she had a mutual friend set us up on a blind date after seeing me in a picture.  I would have never “sacked up” and asked her out on my own, but considering I was put in a situation where it would have been very awkward, and quite frankly rude, for me not to, I asked for her number and waited the obligatory 3 days to call her.  Ladies- for an insight into a guys mind during this “waiting period” watch the movie Swingers.

When I first started to haggle I would get the same knots in my stomach as I would when I would be scared to ask a girl out or tell her that I liked her.  I was scared, scared that the salesman or manager might think less of me, scared they would say know, scared they would be offended.  Why was I scared?  I really don’t know, I never had a situation that scarred me, but I think it all stems from my historically low self esteem (now practically gone thanks to my wife!).

Today when I was haggling for a new pair of over-priced running shoes, I happen to be haggling with a cute woman, and it all clicked!  The nervous feeling I would get when wanting to ask a girl out is the same nervous feeling I get when haggling…except haggling is way easier.  Haggling is a confidence builder!

I rarely get turned down when I haggle, and when I do it’s never a big deal, I leave with my pride, and confidence still in tact that I tried, so I have no regrets.  This has built my confidence up greatly.  That is confidence that I could easily turn around into “technique” and confidence for picking up women (not that I ever would, I am very happily married).  I will have to find someone to try this technique on, but I’m positive it will work.  Haggling is the best confidence builder I’ve had…besides getting married.

I implore you all to at least try haggling, whether you get a discount or not it ends up being a rush so it feels good afterwards, but when it does work and you save some money, it builds your confidence, and you get that rush.  Also, as an added bonus, if the salesperson is a member of the opposite sex you can subtly flirt and complement the person to help you haggle!  Pretty soon, haggling will be no big deal, and you can turn that confidence and flirting into picking up members of the opposite sex!

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