Dave Ramsey’s Financial Peace University: Week 8 - That’s Not Good Enough!



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Last week - Clause and Effect

Last week was week 7 in Dave Ramsey’s “Financial Peace University“. Week 7 was all about insurance.  It talked about what kinds there are, what kinds you should have, and what kinds to avoid.  Some key takeaways:

  1. Make insurance coverage a priority to avoid a financial disaster.
  2. Learn the types of insurance you really need and get them NOW!

Week 7 really stressed to me just how much I need to be looking into our insurance coverages (or lack thereof) and make sure that my wife is provided for in case of a disabling event, death or other horrible situations.  Things happen, so you should be prepared!

This week - That’s Not Good Enough!

This week was all about negotiating, and finding good deals when you’re buying things. Some things we learned this week:
  1. Don’t be afraid to negotiate. Be willing to walk away.
  2. Always use the power of cash.
  3. Remember the places where you can find great deals.

Bargain Techniques

During the class today we were given a bunch of techniques that we can use when trying to negotiate with someone trying to sell you something.  They may or may  not work every time, but you’d be surprised at how often they DO work.

  1. That is not good enough:  When you are told that this is best and final deal, let them know that the deal isn’t good enough, and you’re not going to do the deal unless it gets better. Usually they CAN give you a better deal
  2. “If I” - Take-away Technique: A technique where you add something to the deal, and then take it away only to drop the price.  For example, if you’re trying to buy the house, say you’ll buy it if they throw in their boat as well. If they won’t - tell them you’ll buy for 20 grand less.
  3. Flash the cash - Yes, cash talks: Bring cash along with you to the deal, but only as much as you’re willing to pay.  Tell them that you have cash, and you’re paying in cash, and this is how much you’re willing to pay.  Often they’ll drop the price and sell the item to you for much less.  Dave Ramsey gave the example of getting a $1300 washing machine for less than $900 because he paid in cash.
  4. Shut up - use the power of silence: Be silent when the salesman is talking to you.  If you don’t talk, sometimes they’ll feel uncomfortable, and feel like they’re losing you as a sale.  Sometimes they’ll start offering discounts, bonuses, etc just because you aren’t saying anything.
  5. Be willing to walk away: If you can’t get the deal you want, be willing to walk away, and not get the item you are looking at.  If you get so emotionally invested in it, you may have problems walking away.

Websites to find a deal

Dave Ramsey’s Website offers some places you can use online in order to find a good deal, and get peer reviews of products you’re considering buying:

  1. www.froogle.com - Google’s search engine for hot deals!
  2. www.pricegrabber.com - Comparison shopping from all over the web!
  3. www.epinions.com - Great real-world product reviews and opinions.
  4. www.ebay.com - You can find just what you need—in someone else’s attic!

To this list I’d add a few of my own sites:

  1. www.fatwallet.com - Great place to find coupon codes when buying things online
  2. www.priceprotectr.com - Website that will email you when the price you bought something for drops - so you can get a price guarantee refund.
  3. www.craigslist.com - Great place to find free or cheap furniture, electronics, etc.

Places where you can find good deals

Ramsey talks about how there are a myriad of places that you can find a deal, if you’re only willing to do a little leg work.  Some of the places he mentions:

  1. Estate sales
  2. Individuals
  3. Public auctions
  4. Couponing
  5. Garage/yard sales
  6. Flea markets
  7. Repo lots
  8. Foreclosures
  9. Pawn shops
  10. Classified ads
  11. Consignment shops

Doesn’t hurt to ask

One point that is stressed in this lesson is that people are often afraid to do the most basic thing, and just ask for a discount!  If you don’t ask, they WILL charge you full price!

Ramsey gave a few examples of people who have saved, just by asking.  Here is one of them:

“I walked into the local jewelry with cash in my pocket and purchased my wife an anniversary ring. The price tag said $2,600, but I offered $1,600. They wanted to add tax, but I said no…$1,600 out the door and they took it! I love this debt free stuff!”

Other tips to keep in mind

  1. Keep your eye on the calendar. If you buy your winter clothes in the summer and your summer clothes in the winter, you can literally save hundreds. Even if you buy a car or house during the off seasons, you can save big. That whole supply-and-demand thing really is true!
  2. Get outdated techno. Be willing to buy last year’s models of TVs, DVDs, computers and digital cameras and you can save tons. Chances are the bells and whistles added to the latest versions aren’t worth the hundreds that you’ll save!
  3. Comparison shop. You may always shop at one particular store, but venture out to find big bargains at stores you may have never visited before. Discount stores and second-hand shops are fantastic places to find deals and save big-time! You can even hop online to find sites that compare products and stores to help you find the best value.
  4. Make a deal. Don’t be afraid to negotiate for a lower price. If you’re shopping with cash, your chances of making a sweet deal are a lot better.
  5. Get to know eBay. Buying stuff at online auction sites is another way to get nice, slightly used items. Just make sure you buy from reputable sellers with a high positive feedback ranking.

Next Week

Next week is a lesson entitled “Of Mice and Mutual Funds” which talks about mutual funds, where to invest, and why most people have problems in the area of investments.  Stay tuned, next week is a good one!

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Comments

5 Responses to “Dave Ramsey’s Financial Peace University: Week 8 - That’s Not Good Enough!”

  1. celticbuffy on July 15th, 2008 10:42 am

    I just finished reading this chapter. It’s really hard for me to ask to negotiate on a price, even at garage sales. Something I definitely need to work on.

    celticbuffys last blog post..Procrastination

    [Reply]
  2. Peter on July 15th, 2008 2:46 pm

    @ celticbuffy - Yeah, i’m not always very good at it negotiating either. It’s something I’ve yet to try too much because I haven’t really bought anything worth haggling about recently.

    [Reply]
  3. GFish on July 16th, 2008 1:20 pm

    Haggling is very uncomfortable. And I think the ability to walk away is the key.

    I’ve haggled on cars & furntiture before, because that seems acceptable and expected. But can you go into Babies R Us and haggle over a car seat? Or to a sporting goods store for a pair of shoes?

    I tried haggling with a guy at Radio Shack over an older generation iPod nano once and he wouldn’t come down on price. Even though I could buy it on radioshack.com for the price I was willing to pay him. I ended up buying a refurb off apple.com for even cheaper and it has worked perfectly.

    [Reply]
  4. Peter on July 16th, 2008 3:21 pm

    Yeah, I think some stores you may not be able to negotiate or haggle, and Ramsey said as much. By the same token, even at those types of stores you can often find a bargain by buying an open box item, last year’s model, etc. Finding a bargain might take some work, but in many cases it will be worth it.

    [Reply]

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