No discussion about saving and budgeting would be complete without addressing negotiation. You will never save money quicker than when you are negotiating with someone. Usually, all you have to do is ask for a discount and you may get it.
So how can you use negotiating to save you money, and how should you go about negotiating with people?
First off, remember: everything is negotiable. And even if it is not, it never hurts to ask because the worst they can say is “no.”
Tips/Techniques
- Small Talk – One of the most important things you can do at the beginning of (or even before you start) a negotiation is get to know the other person. Even one minute of small talk about their favorite team, where they grew up, what their interests are, etc. will serve you well. This is because people want to help out others that they like. Showing an interest in someone lets them know you care about them and that you’re likeable. Plus, you might find something out about them that you both have in common. This is important because people are also more likely to help others that are similar to them. Studies have shown that engaging in small talk results in more successful negotiations. Small talk = big gains.
- Be Friendly – When you think of negotiating with someone or making a better deal, you may think that you’re on the opposite side as they are. But this “opposite side” mentality will only hurt you. You will get better results if people like you, so be friendly.
- Silence – People generally are uncomfortable in a conversation in which there is total silence. So, ask for whatever discount you want then keep your trap shut! If you don’t say anything, odds are that the other person will end up giving you some sort of discount. If they offer you a discount don’t immediately reply; stay silent—they may break the silence with an even bigger discount!
- What is Motivating Them? – In order to be a successful negotiator, you must find out what the other person’s interests are. What is important to them? How will the result affect them? If you don’t know what they want, you won’t be able to get what is best for both of you. Here is a quick story that should show you that you must ask questions when you’re negotiating:
- Ask for the Moon – It may sound unreasonable to ask for a huge discount if you only want the price knocked down a little bit. But it is really the smartest thing you can do. Here’s why:
- You might actually end up getting it!
- It leaves room to negotiate from the outrageous position to what you really want.
Information is King
Information is the most important thing in a negotiation. The person who has the most complete information has the edge. That is why, as you see from number 4 above, you must ask questions to find out what the other person’s interests are. You must ask “why” questions.
Asking questions gets you information. If you are just buying a product, however, the most important information you might need is how that product is being offered at competitors’ stores. How is it priced online? Are others offering rebates? Free delivery? Extended warranties? Free repairs? If you comparison shop all these things before you decide to make your final purchase, you should easily be able to negotiate your final sale to get the best deal you can.
And remember, you will never save money quicker than when you are negotiating with someone.
TAKEAWAY #4: Everything is negotiable.
TAKEAWAY #5: Find out what is important to the other person—ask “why” questions.
This excerpt is taken from “Young Adult’s Guide to Investing: A Practical Guide to Finance for Helping Young Peo Le Plan, Save, and Get Ahead” by Rob Pivnick. To read other articles of this book, click here. To buy this book, click here.
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