Wednesday, February 04, 2009

Reduce Spending without Sacrificing Lifestyle #2 - Buy Below Regular Price

We've started tightening our belts in the My Wealth Builder household. Our target is to reduce our annual expenditures by 5% without any reduction in our current lifestyle. Our first step was to eliminate waste , i.e. money that's spent on goods and services but not effectively used. Our second step is to buy below the regular price. Here are some specific approaches:
  • Buy on sale. Merchandise seems to regularly go on sale nowadays. If it isn't on sale, inquire as to when it will be on sale. Most retail establishments seem to have a schedule of sales related to holidays, end of season, customer appreciation or just the beginning of a new week.

  • Use coupons. Many manufacturers and retailers regularly issue coupons for products. For example, Costco periodically sends out a coupon book for many of the items we purchase. Using the coupon usually saves us 10-20%.

  • Ask for discount. When making a large purchase, I will often ask for a discount for paying with cash. Usually, a retailer will reduce the price by 2-3%, which is the cost they pay when a customer uses a credit card.

  • Buy used. While we buy most things new, there are a few items that we consider buying used. For example, we've found that buying used children's clothing (0-5 years) is typically a good deal. Used children clothes are often in very good shape, and in some cases, have never been worn. Another product that I will consider buying used is a car. I've purchased used cars twice and was able to own a significantly nicer car than if I had purchased new.

    At this time, I will not buy used electronics.
  • While we will still pay full price for many things, buying at a lower price on a number of items we purchase regularly will help reduce our annual expenses without sacrificing our lifestyle.

    For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

    This is not financial advice. Please consult a professional advisor.

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