It’s a rite of passage for every teen and young adult… the start of making their own buying decisions and purchases. This rite often is met with tricks and traps as it seems the real world doesn’t want to make it easy for our younger generation. What’s it called? Learning the hard way? Yep, I’ve done that!
So I’ve pondered ways to help my teens navigate through the manipulative real world of “Buy Now, Pay Later”, “We’ll Beat Any Competitors Price” and “Zero Interest Until 2014”. We all have numerous experiences can we share with our teens on the art of negotiation and importance of reading the fine print, (which goes along with the mind bending exercise in trying to understand it.)
That fine art of negotiation works best when confidence fuels it, (and confidence is fueled by knowledge). Negotiating will be important not only in purchases but also in the career world as they seek to move up the ladder.
Below are 10 valuable tips compiled from Entrepreneur, Psychology Today and Consumer Reports.
1. Be Informed. Want to buy a new car, TV or rent an apartment? Do your homework first and research on the internet. The virtual world is bursting with information that’ll allow you to compare prices and important product details. Often there are online calculators that will factor in the price and most fees for you. These calculators are not entirely accurate but will give you a foundation to start from.
2. Create A Budget. The amount you spend can be determined by either what you are “able” to afford or what you “should” spend based on market prices. Both should be considered when establishing a budget. But be prepared, in most cases there are additional hidden fees known as taxes, interest, processing charges, insurance, maintenance packages, etc.) To account for the hidden fees, seek a product that is 85-90% of your total budget to allow for the average fees of 10-15%, (however it varies for every industry).
3. Shop Around. Find local (or online) businesses that are willing to beat any competitors advertised price. For smaller purchases, you can simply scan the bar code with your smart phone to compare prices. For larger purchases, it’s time to step away from your computer and iPod because the best places to find businesses offering price-beating programs are in your local newspaper or on the radio.
4. Make A List. After doing your research, write down what you need and what features are important to you. Your list will keep you focused so the “shiny objects” don’t lure you into buying something you don’t need or can’t afford.
5. Watch, Read & Listen. Find out what others are saying about the product or business. Testimonials can be found throughout the internet on Yelp.com, all search engines (Google, Bing & Yahoo) and in social media you can search via SocialMention.com. Another great source is Consumer Reports, a magazine and an app on your smart phone that is considered the supreme source of product research and reviews.
6. Put Your Game Face On. Your research and list will give you the confidence you need to get in the game. There are many types of sales people out there. The helpful, informative type and the commission-minded type. Keep your enthusiasm to yourself, evaluate your sales person to see if they have your true interests in mind, (and don’t be afraid to request a different person if they are not helpful). Stick to your research, list and budget but consider any new information you may gleam from an informative type sales person.
7. You’re In Charge. Always keep in mind that you are the customer. Never allow manipulative tactics to pressure you into purchasing on the spot. In the midst of negotiating a price or payment plan, or evaluating which product is best for you, take notes and prepare do more research.
8. Don’t Buy Now. Try not to rush into anything. Take the time to evaluate your experience, any new information and compare it with your research and list. This will prove valuable.
9. Cash vs. Credit. If you have been diligent in saving your money, you are miles ahead of others. The money you save in paying for your purchases vs. using credit can equate to a 15-40% savings. Of course, there are times we must use credit. If the company offers a “no interest” time period, this is timeframe in which you must to pay as much as you’re able to avoid high interest which will save you a lot of money.
10. Enjoy. Life is sweet! You’ve made a smart purchase on your own. Whether for need or pure entertainment, you can be assured you’ve paid the best price for a great product without over extending yourself.
I strongly encourage that you share these 10 valuable tips and your own experiences with teens and young adults as an important step towards a solid financial future. As stated in Tip #9, encourage them to save some of the money. They can start by opening a U22 account. It’s perfectly designed for 12-22 year olds.
Today we discuss purchasing, next month we’ll discuss negotiating in the career world.
