How to Negotiate (& Save More Money)

How to negotiate a deal

As we already know, creating long-term wealth is about increasing our inflow and decreasing our outflow, and being smart about how we manage those two financial pipes going in and out of our bank accounts. Either way, the more we bring in or the more we save means that we create more wealth for ourselves. The main question when it comes to cutting costs and saving money is this: How do we do it? Thankfully, there are lots of wealth-building strategies that involve how to save money, how to cut costs, and how to negotiate better deals. But first, you have to know how to negotiate. 

We sometimes think that cost-cutting is all about two ends of the spectrum. On one hand, you have people who try to save fifty cents here, a quarter there, a buck now and again, and over time, those savings add up (think the coupon-clipping generation). And on the other end of the cost spectrum, you have people who try to save money only on the big-ticket purchases—the cars, the homes, the things that are accepted as items that have prices you can negotiate. 

While both of those extremes are places you can save money and create more wealth for yourself, the truth is that you can do it everywhere in just about anything (or any service) that you need to purchase. 

Most importantly, what saving money and learning how to negotiate is all about is creating a mindset that gives you the license to think about places to save money in all kinds of situations. I don’t want you to be obsessed to the point where you’re trying to save a penny here and there (because it may not be worth your time), but I do want you to recalibrate how you think. 

I recently bought my wife a piece of jewelry from a dealer in a different part of the country. She ended up not liking it, so it was fine for us to return it because I had arranged a window of time where we could return it. 

Where did I save money? Instead of paying $200 to have that jewelry insured by the seller for the cross-country trek, I learned that it would be covered by my homeowner’s insurance. 

What does that get me? Much more than $200 in savings. It’s the savings, which is actually $300 in earned income if you take out the taxes on what it takes to earn $200. But now I get to put that $300 of earned income in a place that will make money. After a few years, that $200 I would have spent on insurance is worth double that, even creeping into four digits. This all happened because I did a little checking around—and had the mindset of not wanting to pay for something I didn’t need or want. 

That’s what we’re after – creating wealth by creating a new mindset when it comes to costs. Are you ready to learn how to negotiate some deals?

How to Negotiate Using a Smartphone

Today, the scales have tipped more in favor of the consumer. It used to be, if I may generalize a bit, that sales personnel had all the power. They had the product, they had the price, they had the smarts and shrewdness to make a sale, and they could also bank on the fact that you’d be more likely to buy with them than to get in your car, drive across town, and comparison shop. 

The Internet changed all that, as it gave consumers the power to do some research immediately and on the spot. 

Having the Internet in the palm of your hand tips the scales in your favor.

Nowadays, with a smartphone, you can comparison shop, research products, and find out invoice prices on cars—all within seconds. Knowing eliminates nonsense, not to mention saves you dollars and cents.

Step one of any process in making a purchase needs to involve research. 

Once you know what you want, you need to find out how much it costs, what others are charging for it, whether there are any limitations or pitfalls to the product, and even what fellow consumers may say about the product. You gather all of this so you can not only ask relevant and thoughtful questions but also have the ammunition to negotiate a lower price. 

While you can certainly do all of this research from home, I do recommend that one purchase you make is that of a smartphone if you don’t have one. That way, you can simply do in-the-moment research—showing a clerk or manager that competitor A has the same item for a 10 percent lower price. Many stores now have matching programs that allow them to sell you the product at a competitor’s price, but they’re not going to do it if you don’t ask — and you won’t ask if you don’t know.

Remember, your most important asset is time, so saving time and money is your goal.

So, let’s say that you want/need/drool over a new flat-screen TV. You look around, decide what you want, and then go to big-box store A to take a look. Store A has what you want, but it’s $100 more than the price you found at big-box store B. Yes, you could get in your car, drive across town, and go through everything again, but why not just ask for a better price? Saves you money and time.

Research—and knowledge—allows you to do that.

To that end, I encourage all of my clients to think about ways they can get their time back (which is so important when it comes to improving their quality of life). So, for example, many supermarkets now offer delivery-to-your-door shopping. 

You punch in your list, and they gather the goods and drop them off. Saves you an hour or so every week. If you can make more money than the cost of the shopping service, doesn’t that make sense?

On the surface, it may seem like you’re spending more money to use the service, but the truth is that you have a net gain if you’re able to allocate that hour to something that increases your overall wealth (or happiness, for that matter).

Especially when you extrapolate that hour every week to fifty-some a year or five hundred over a decade, that’s a serious difference in the amount of money you’ve earned. I see it time and time again. So many people waste time talking about creating wealth rather than taking steps to actually do it (whether it’s through research or talking to a spouse about priorities). 

To be effective, you have to take action—and not just wish for better savings or more wealth. It’s about carving out time to address your issues—and your desires—head-on. By saving an hour here and there, you are capturing more quality-of-life time earlier in life (which is really the goal of this entire book).

In all areas of spending money, you can use knowledge to find ways to cut costs, whether it’s getting manufacturer coupons sent to your e-mail address or notifications about specials that restaurants are running. If you can make it standard operating procedure to do your research upfront, you’ll save big over the long term. 

Depending on your income and financial status, $10 here or $50 there may not feel like it’s worth it to do the research for purchases. But what happens if you do that most of the time? The dollars add up quickly, you get the same product but at a very different price, and that money stays in your pocket—not a corporation’s—and compounds in your personal investment portfolios just like my dad taught me. Make every spare dollar sing!

My main point here is that too often I see people using smartphones for things that are very worthwhile—texting, using social networks, taking photos, even taking calls.

However, we don’t use them enough to do the kind of research that can give us information to help us save money in all kinds of purchasing situations. It’s not that we don’t know the power that the phone has; it’s that we don’t utilize that power enough.

Why Buying Used Items Helps You Save Money

Part of the trick with writing about finances is that it’s a little bit like writing about health; everybody’s situations are a little bit different, just as everybody’s bodies are a little bit different. 

That said, we all still have similar goals—make more money, save more money—no matter what financial bracket we’re in. And that means, just like in health, there are fundamental maxims that the majority of people should embrace. The “eat your veggies” equivalent in the finance world may just be this: Embrace the phrase “certified pre-owned.”

For too long, there’s been a stigma about so-called “used” goods. Why would we want to buy anybody else’s stuff? Something that somebody else put through the wringer, messed up, soiled, spoiled, and so on? And I get it. There’s a certain cache to buying new. After all, there’s no such olfactory phenomenon called “the used car smell”. What does cache really get you, in terms of wealth? Not a whole lot, actually, especially on goods that lose value the minute you purchase them, like cars and a lot of electronic equipment. 

One of the smartest things you can do to save money and increase wealth is to buy “factory-certified pre-owned.” You also want to look at similar words used for different products, like “refurbished,” which is often used for electronics. 

What does that mean? Yes, it’s used, but it’s been restored to be as similar to new as possible. But the factory also backs the product and comes with a warranty so if it does fail you, you’re not the one on the hook for getting it fixed. The manufacturer is on the hook to take care of the costs (with some wear-and-tear exceptions), and that saves you lots of money if something goes wrong. You get something that’s almost as good as new for a fraction of the cost.

Therefore, it only makes sense to buy certified pre-owned cars, and for a little extra money, you can usually extend the warranty that it comes with. That alone can save you thousands in the purchase of a new vehicle. 

The same goes for computers. My wife, for example, was recently in the market for a new computer. She uses it to send e-mails to family members and keep up with the news. She could’ve bought a new one with lots of power and memory, but why would she need that to do basic functions? Instead, she could buy a certified pre-owned computer, which works just fine and does what she needs. She saved hundreds of dollars on that purchase without—here’s the key phrase—giving anything up. She didn’t lose function. She saved, but still gained.

You can do the same for tablets, cameras, phones, and lots of things. The main thing to keep in mind is that you want to ensure that it has the manufacturer’s backing, so if something does go wrong, you’re not the one who’s responsible for it. Also, you can rent expensive tools for special uses or events, like high-end cameras or gowns for that special occasion, and then return them for a fraction of the cost of purchasing them. When you travel, you can rent someone’s home through Airbnb or VRBO both cut out the middleman’s profit and have a more enjoyable residential getaway vacation for a small fraction of the cost. Keep in mind the caveat I mentioned: some people do need the latest and greatest in some areas. Obviously, if you’re doing some kind of digital production work, you may need the newest and fastest computer equipment to serve your purposes. 

But my point is that unless there’s a tangible (and cost-related) reason why you need new, why not entertain the alternative? For example, consider an automobile purchase; purchasing a mint condition car from your manufacturer of choice can yield your family a savings of 30 to 50 percent off of the original sticker price by choosing a 2- to 3-year-old certified pre-owned car.

Look Not Just at Today’s Price, But Tomorrow’s Cost

You’ve heard the phrase, “You’ve got to spend money to make money” because it’s a truism for all kinds of businesses, from lemonade stands to high-tech start-ups. But you can also twist that phrase a little bit for another financial truism: “You may have to spend money to save money.”

Let me tell you what I mean by telling you a little bit more about one client.

Recently, an important client who has had some health issues asked me if he thought it would be worth spending money on a special service offered by the best hospital in the area. That service would give him immediate access to doctors, quick scheduling if issues came up, and more—basically a ticket that gets him to the front of the line. But it costs about $10,000 a year for that service. That’s a lot of money. We weighed the options, and he decided to go for it.

What he found was that the service was worth it. He has staff meet him at the hospital to take him where he needs to go (he has some trouble walking). He gets personalized attention at the hospital and from top physician specialists that he needs to see. He gets the cell phone numbers of many of his caregivers as well, and they’re happy to talk to him whenever he needs them. My client has said that it’s the best money he’s ever spent. Did it cost him a lot? Yes, of course. But what he gained has more than paid for the service—not just in terms of money savings, but also in terms of increased time and decreased stress, which, as you know by now, is all part of the wealth equation.

Another good example is in the area of travel insurance. Perhaps you don’t need it every time you travel, but spending a few hundred dollars to ensure that you can get your money back in the case of an emergency could be well worth the money spent. You may not end up using it (and let’s hope you wouldn’t), but what if you had spent thousands in non-refundable money and a medical emergency prevented you from going? That few hundred dollars of insurance to get your money back would be well worth it.

Now, I won’t use that for small trips that I can reschedule and just pay a small fee to change the airline ticket, but it’s absolutely something I would do for bigger trips with greater expenses involved. Sometimes you have to spend money to save some. Sometimes you have to evaluate possible consequences and cost-benefit ratios of particular situations. I’ll do the same thing if I’m thinking about making a purchase that I don’t know enough about and can’t do the research myself; I may pay an expert a small fee to look at my potential purchase. And that person can conclude whether it’s a good deal or not.

Example: I brought in an independent person to evaluate a real estate deal for my office because it involved commercial real estate and lots of variables that others are more qualified to evaluate. 

In this situation, the expert could tell me why this particular deal wasn’t a good one. I spent money on the service, but I ended up saving it in the long run because it prevented me from making a bad deal that would cost me dearly in the long term. 

And that leads to a bigger point: While we all have the power to do research (and we should do it as much as possible), sometimes it’s actually smarter to bring in a third party who has years of experience in a particular field because no matter how much research you do, you will not be able to catch up to the experience and wisdom that comes from a qualified expert.

The Secrets to Being a World-Class Negotiator

If you believe movies, TV shows, or any popular portrayal of negotiation, you probably think it’s all about winning and losing, sharks and minnows, poker faces, and big gambles that get the deal done. While there may be some of that going on in today’s world, the reality is that every person has the power to negotiate. That is, everyone has the power—and can have the ability—to get better deals for themselves.

I love teaching other people how to negotiate because it’s one of my favorite things to do—knowing that I’m helping my clients get the best deal possible, saving them money, and increasing their wealth. (Let that also be a side note. If you have a personal wealth advisor, that person can do a lot of negotiating for you, especially on large purchases and substantial investments.)

Before I go through my tenets and advice about how to negotiate, there are a few disclaimers. 

One, not everything is negotiable. If something is not a commodity (that is, a specialty item and not everyone offers it for sale), there’s often a fixed price and not a whole lot of wiggle room. Also, on low-priced items, like soap, nobody’s negotiating to get a bar of soap a few cents cheaper than the sticker price; and no retailers are entertaining such offers.

Two, you have to do your research. Perhaps the greatest example of that comes to car shopping—simply looking up the invoice price at Kelley Blue Book or CarSense arms you with information you can use in negotiation. A negotiator without knowledge isn’t a negotiator; it’s simply someone pleading for a lower price, and that someone usually isn’t very successful.

Here’s the key to effective negotiation, as I see it: Don’t treat it like a cut-throat game of winners and losers. Too often, when I see people negotiate, it seems that the process is more about who wins and who loses—in that if you don’t leave with the other party completely pummeled, then it wasn’t a success. 

Negotiation is not a game; it’s not about trying to best the other person. To be most effective, you have to treat it like this: You’re after the best possible price for yourself, but you’re not trying to gut the store/clerk/salesperson with a harpoon. My goal in any negotiation isn’t to chisel down a salesperson until that person makes nothing on the deal. That’s not fair, or right. My goal is to get a very good value at a very fair price—one that makes me (or my clients) happy. In fact, I even tell people I’m negotiating with this upfront: “I want to be able to smile at the end of this discussion, and I want you to be able to smile as well.”


Inevitably, at the end of the deal, I’m told that I’m a good negotiator by the seller, which I like because it’s an indication that we both came out with something. That’s good for me in terms of saving money and adding value, but it also helps me with long-term relationships, meaning that if I treat the person on the other side of the table fairly, it may lead to other opportunities for our clients down the line. 

  • Learn how to negotiate with your brain, not your heart. 

This is probably the hardest thing for so many of us to get our heads around when it comes to negotiating. You find a piece of jewelry you love, you want that piece of jewelry, you’ve never seen anything like it anywhere before, you must have that jewelry. That may be exactly how you feel, but you shouldn’t let the salesforce know that. Once you let your emotions show, they’ve got you. They’re trained to capitalize on that. Knowing that you want that and only that and will accept nothing else means that they don’t have to give you any wiggle room whatsoever when you’re trying to figure out how to negotiate after the fact. I’m not saying this is easy to do, but I can tell you a couple of ways to try to strip the emotion out of it. 

One, have a third party do the dealing for you (whether it’s a spouse, friend, or advisor). Automatically, the emotion will be taken away and your side won’t appear too eager. Two, go back to what I said earlier: Do your homework. Find other items. Go to other car dealerships. Do your Internet searches. Options give you leverage. 

Now, if we’re dealing with something extraordinary—be it an antique or some collectible that’s so rare it’s hard to find alternatives—then yes, maybe you won’t have much leverage. But that’s okay. If that item gives you that emotional satisfaction, then that’s not where you’re going to battle. You’ll do battle over the other items in your life.

Negotiation isn’t only about saving; it’s about gaining. 

Perhaps the number one secret to effective negotiation is this: Don’t think that a conversation has to only be about slashing the retail price. 

While that can certainly be part of it, one of your goals in negotiating should be to see what you can get thrown into the deal—that is, extras that typically cost money, however, salespeople are willing to throw them in for free because they’re most concerned about getting you to sign on the bigger item. That’s where they and the companies make their big money. Getting some freebies can not only save you money but also improve your quality of life. This can be for big things or even smaller ones. 

Buying a TV? Ask for them to throw in a wall mount or a discount on installation fees. 

Buying a computer? Ask to see what else they can throw in—an external hard drive, a webcam, a custom keyboard, headphones, or any additional items to sweeten the deal for you! I’ll give you another example. (Remember, I do a lot of negotiating on behalf of my clients, but you can do the same and employ the same principles.) 

Whenever I negotiate a car, I always tell the dealer that we’re not going to sign unless it’s written in the contract that the buyer always gets a loaner car and shuttle service or pick-up and delivery for all service visits whenever they are needed for the life of the car. Is that a huge amount of savings at the moment? No, not on the price of the car. But it does save time, stress, and hassle throughout the life of a car for the family.

Once, when I negotiated for a client’s move into a retirement community, I was able to secure for her a new $9,000 golf cart for the rest of her life, and that included regular maintenance and a parking spot in her garage for her cart. Best of all: if it breaks down, she gets it serviced or a new one—for the rest of her life. If that’s not a value-added extra, I’m not sure what is. (She’s in her seventies, so she could live for many, many years.) That’s an incredible service and cost savings for my client, and not that much of an expense for the retirement community, which will be getting her business for conceivably decades. 

See, we both won!

Know the facts about that particular business—and the competitors. This goes back to the basic premise of doing your research. One of the absolute keys to negotiation is being able to identify the supply and demand in any situation because you get a sense of really who has the most power in a negotiation. For example, if a retirement community has a 98 percent occupancy rate, I know they’re not desperate to sell apartments or townhouses. But what if that occupancy rate is 70 or 80 percent? They have much more incentive to fill the slot and make a deal (throwing in extras, agreeing to no price increases for a certain amount of time, etc.).

Related, it helps to know the same facts and figures about competitors. The bottom line is that people negotiate because they know you can go right down the street and buy elsewhere. When they know that—and you’re willing to do that—you have much better odds of getting a deal for yourself.

When learning how to negotiate, you have to be ready to walk this way. And by “this way,” I mean “out the door.” If you’re not willing to leave and go somewhere else, no negotiation’s going to happen.

I remember the story of a friend who got his first job. He was told the salary, and he said – mistakenly, if I may add – “Is that negotiable?” The response from the employer: “Only if you want it to go down.” 

That wasn’t a good tactic for a number of reasons. 

For one, he asked a yes-or-no question that the employer quickly shot down. Two, he wanted that job, so he wasn’t willing to walk away and wait for something else. That’s the truth whether we’re talking electronics, cars, salaries, anything. If you know your options and are willing to explore those options, you have a better chance of both saving money and getting some great extras thrown in. 

So if you’re shopping for some homemade item that has a unique quality to that seller, you should expect to pay the full cost. But in all other cases, other sellers would be happy to sell the product or service to you, which means that just about all sellers should be willing to negotiate. 

The fact is that ever since we started outsourcing the manufacturing of our products to other countries, prices have gone down, and that gives consumers more and more leverage in the negotiating process. Because the cost is down, there’s much more so-called “profit” to work with when negotiating a price.

The Negotiator’s “What-If” Handbook

If the salesperson says, “Sorry, we don’t negotiate here,” you say, “What’s the absolute lowest price you can go?” 

It’s true that some stores don’t negotiate, but there are methods that salespeople can use to help you out, like giving you a sales price or other benefits or services. 

If the salesperson says, “That’s the best I can do,” you say, “When’s your next sale?” 

For example, I will only buy good-quality suits but won’t pay everyday prices, so I buy them only when they go on sale at my preferred department store. So part of this process is about impulse control—you don’t need X, Y, or Z right this instant (unless, of course, you do). But if you can train yourself to wait for that item, you’ll get it at a much better price (even 40–50 percent off at some department stores) at semi-annual sale time. 

You may even learn that you don’t need that item at all. Ideally, you should develop a relationship with a qualified and interested salesperson who can call you in advance of the upcoming sales at your store of choice.

Final Thoughts

If cutting costs and saving money is a priority for you, it’s crucial to learn how to negotiate. Use everything you have to your advantage, from smartphone technology to the ability to shop around online for the best sales and deals. Think about what you need – and what you want – but make a plan to get whatever that item is for the best possible price. Don’t just accept the first offer that comes along. When figuring out the nuances of how to negotiate, it’s important to have patience and be able to ride out the market sometimes to get the best price. 

To save money, sometimes you do have to spend money – but you can always deploy a few carefully curated strategies to help you spend that money confidently. If you know that you can stretch your budget and make your money go further, you’ll be able to accomplish more with it and do more for yourself with it, too. 

Everyone can be a deal-maker. These strategies aren’t just for finance experts and businesspeople. However, the mindset that these people have is what you need to adapt to see success in your negotiations, whether it’s for a small sale or something bigger. Always be thinking about ways to make your money go further by giving it a purpose. If you spend consciously and with purpose, you’ll be surprised at what you can accomplish financially.

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