Money, Investing and More on Consumerism Commentary: A Personal Finance Blog (5)

Always Try Bargaining: Here’s How it Worked for Me

by Flexo on October 12, 2009

in Consumer

Tom Dziubek, the producer of the Consumerism Commentary Podcast, and I have been having some difficulties with the Acer Aspire desktop I purchased earlier this year. I believe the problem can be fixed, but it will take some time. The problems have unfortunately affected our recording and interview schedule, so when an interview on Friday was cut short due to yet another glitch and more interviews were scheduled for today that were already postponed due to technical difficulties, I wanted to resolve the problem this weekend.

At this moment, it is somewhat difficult to get a powerful desktop computer on short notice. Retail stores are gearing up for the release of Windows 7 and manufacturers aren’t providing the stores with much. The belief here is that consumers would rather wait for Windows 7 to be installed at the factory rather than buy a computer whose operating system will be out of date within weeks, even if it includes a free upgrade.

I spotted one major regional chain electronics store that not only had something better than eMachines, it had the exact desktop model that I probably would have purchased online, with a few modifications, if I had more time. Most of the computer’s specifications were excellent, but the only drawbacks were a 5400 rpm hard drive — too slow for audio recording — and an integrated graphics chip. The graphics chip was probably fine for what we needed but I prefer discrete graphics.

The salesperson and I spoke for a long time, and I eventually got a discount on the purchase — a larger discount than I asked for. Here is how I won this battle of money.

1. I was very knowledgeable about what I wanted. I have been researching the best desktops currently on the model for the past few weeks, ever since the first sign of problems with the Acer Aspire, even though I believed and still believe the problem can be fixed. I knew exactly what I wanted and the price range I wanted to pay for the features I wanted.

The salesperson knew I was knowledgeable because I discussed the system in detail with him and explained my other options. I could tell he wasn’t as technically inclined as I am so I didn’t try to show off; I kept the conversation on his level but I was able to express that I had done my research.

2. I pointed out the flaws. It is true this machine had the two drawbacks I mentioned above. I made sure the salesperson was aware of my observation that these factors were detrimental to my choice and might hold me back from buying.

3. I asked for a discount. On the basis of the machine not matching my expectations exactly, and knowing that a 10% discount is common in retail electronics, I asked for 15% off. The salesperson explained that they cannot offer discounts on computer systems, but they could offer me a rebate if I purchased a printer or possibly some other accessories. I considered this; I didn’t need a printer, but if I could get a good discount on a replacement hard drive or graphics card, I might take that option.

The particular store I visited does not sell these types of computer components, so I wasn’t going to find something I needed. The salesperson did work very hard as we thought about different options that might satisfy me.

4. I was patient. When we couldn’t find a good route for a discount other than, in my mind, the computer itself, the salesperson went back to his manager. Still, the word was that they could not and would not offer a discount off the price of the desktop. We looked online, the salesperson on the store computer and me on my BlackBerry, to try to find other stores offering the system for less.

The store’s system of price matching is designed to wear the customer down. The salesperson has sixteen competitors’ websites bookmarked in Internet Explorer, and the process calls for searching for the product on each website in order to find a store with the product in stock and for sale at a lower price.

As I mentioned above, this is a very bad time for buying a computer with stores keeping not much in stock, so I knew this search would be fruitless.

On my BlackBerry, I did find a better price on NewEgg.com, but as expected, the store would not match an online-only price. The price at NewEgg was $30 better than the price in the store, which would have been a discount of less than 5%.

5. I made my final offer. After about thirty minutes in the store, we still weren’t going anywhere. The sales manager wasn’t ready to budge, and I wasn’t going to pay full price yet, even though I knew I needed a new computer by the end of the weekend. I didn’t let the salesperson know that I needed the computer immediately. In his mind, I could just buy the computer online. I told the salesperson that unless they can give me $30 off, that is exactly what I would do.

6. And then I walked out the door. But I didn’t get very far. As I was walking towards the door, I could see the salesperson and the manager in a frantic discussion, and as I stepped outside, I was called back into the store. There were going to make a deal on the desktop.

Patience still played a key role. I waited for what was probably another twenty minutes as the salesperson was in the back of the store, bringing the computer out. There were obviously some more problems because he came out twice without a computer and spoke to the sales manager.

Eventually the salesperson brought out the computer. The box had been opened, but the machine had never been used. It was not a display model or a customer return; the box had been opened because another customer’s keyboard was defective. They took the working keyboard from this computer and gave it to that customer, so mine was without a keyboard. They gave me the working keyboard from the display model and knocked $80 off the price.

That was more than my final offer, so I accepted. My discount in total was more than 10%. I spent more time in the store than I had originally planned but I got what I wanted for a price that was better than I thought I could have received. Even considering the replacement hard drive and the graphics card I purchased later, I talked my way into a great deal.

In the end, I got what I wanted, and so did the salesperson. Everyone wins.

I am not a very persuasive or aggressive person, so it’s a bit against my nature to work so hard just to save $85.59 including tax. I definitely think it was worthwhile. I always suggest at least trying to bargain, even when faced with resistance.

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Podcast 25: Sandra Hanna, Smart Cookies and Neal Frankle, Wealth Pilgrim

by Flexo on October 11, 2009

in Podcast

Today’s podcast features Sandra Hanna, the “savvy spender” among the Smart Cookies. Smart Cookies is a television program on the W Network. Sandra is one of five hosts on the show. Each with their own specialty offers financial makeovers. The Smart Cookies have also written a book, The Smart Cookies’ Guide to Making More Dough and Getting Out of Debt.

In the second half of the podcast, Tom Dziubek speaks with Neal Frankle, the founder of Wealth Resources Group and Wealth Pilgrim. Neal offers his thoughts to Consumerism Commentary listeners about finding the right financial adviser and investing today for the future.

To listen, use the player above (Adobe Flash required), download the podcast here, subscribe to the podcast RSS feed, or use the iTunes link. Note: open links in a new window (Ctrl-click or Command-click) to avoid interrupting the podcast.

[00:00] Introduction from Flexo
[00:40] Interview with Sandra Hanna
– [00:54] About the Smart Cookies
– [02:46] How Sandra became known as the “Savvy Spender”
– [03:32] Sandra’s fear of managing money
– [04:34] How Sandra got out of debt
– [06:05] Why Sandra prefers American Express
– [10:25] Advice for young women on their own for the first time
– [12:55] Tips for people forced to make long commutes regularly
[15:00] Interview with Neal Frankle
– [15:18] How Neal decided to become a financial planner
– [17:36] How people can identify the right financial planner for them
– [18:50] How people should start their search for a financial planner
– [22:22] Why smart people lose money in their financial investments
– [25:20] Tips for new investors to put them in the best position down the road
– [27:00] The Wealth Pilgrim website
– [28:36] Neal’s current projects
[31:26] End

We always welcome feedback from listeners. If you have any comments for this episode or for any other, or if you have suggestions for future episodes, please leave us comments here or email us at podcast at this domain name.

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TV Ad Volume May Finally Be Moderated

by Smithee on October 9, 2009

in Consumer

This is something I’ve wanted to see happen for my entire life. I never thought it would, and I’m only mildly political so I never pushed for it, but we may see a new law that says a TV commercial can’t be “louder than the program it accompanies”, nor can it be “excessively noisy or strident”.

At our house, we don’t get to see a lot of commercials, but our TV-service-provided DVR isn’t as elegant as a TiVo, and the 30-second skip button leaves a gap between skips, and some of those gaps are obnoxiously loud. Usually it’s people wanting to melt down my “extra” gold or sell me some unpainted furniture from a warehouse, but it could be anything. It makes me instantly angry, every time.

But just yesterday,

The House Subcommittee on Communications, Technology and the Internet on Thursday approved a bill that would prohibit television commercials from being excessively loud. The FCC would be required to come up with recommended volume levels for commercials.

Broadcasters, TV stations and cable and satellite providers would then have one year to purchase the necessary equipment to temper noisy ads.

I wasn’t expecting new equipment to be necessary, since when we watch things on Hulu, the ads are never louder than the show I’m watching. When we watch videos on the Xbox, a TV show’s volume isn’t any louder than it would be if I were playing a game, and the same goes with a DVD. Even when watching any of the dozen channels on Boxee, I never have to scramble to adjust the volume. But I guess that “old school” TV providers (I have the extremely recent Verizon FiOS) are a mish-mash of suppliers and delivery devices, and there’s still a hole that needs to be plugged.

House panel seeks to hush noisy ads, Kim Hart, The Hill, Oct. 8, 2009

Hit the mute! Why TV commercials are so loud, and how that may change, Jeff Bercovici, Daily Finance, Oct. 8, 2009

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Friday Discussion: The Need for and Cost of Health Care Reform

by Flexo on October 9, 2009

in Health

I visit a doctor once a year at the most, and I hardly require prescription medicine. The cost of my health insurance premium is about $800 this year for my HMO plan. My employer pays a larger percentage of the total premium, but the prices increase each year by a percentage much higher than inflation. A similar HMO plan, if I were to quit my job and buy individual health insurance in New Jersey, I would pay more than $800 a month, though there are less expensive options.

I’m lucky I don’t have any dependents.

The more individuals in the world with access to good and affordable heath care, the healthier the world will be in general, so I am in favor in reform that brings better care to more people. While reduced costs for me would be nice, that would be just an ancillary — and selfish — benefit. Will any of the various sets of proposed legislation succeed? I don’t know anyone who can answer that question with any sort of definitive answer. Health care is a monster, a complicated system with many moving parts that won’t be fixed right away.

The Congressional Budget Office released their cost estimates for the version of the legislation that is up for a vote within the Senate Finance Committee, and the numbers look better than expected: The bill would could $829 billion over ten years and actually reduce the budget deficit by $81 billion over the same time period. This bill doesn’t include a government-run plan, but it also leaves more people uninsured than some would like.

This legislation has a long way to go. The version of health care reform offered by the Senate Finance Committee needs to be combined with the version being considered by the Senate Health Committee. The Senate then needs to vote on and pass a bill. The House of Representatives also needs to vote on and pass its version of the health reform bill (H.R. 3200). Eventually the bills that pass both the House and the Senate need to be combined, voted on, passed and presented to the President.

None of this will happen without more changes and compromises, and even then it may not gain the votes needed to succeed.

Please share your thoughts and join the discussion. What issues should health reform address? What are your experiences with health care?

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Overkill At the United States Mint With New Coin Designs

by Flexo on October 8, 2009

in Consumer

In 1909, the U.S. Mint decided to honor assassinated President Abraham Lincoln by putting his likeness on the obverse of the lowest denominated coin in regular circulation, the cent. This new design, introduced for the centennial anniversary of Lincoln’s birth, replaced the “Indian head” cent. The model for this design was most likely not a native American; most sources point to Sarah Longacre, the daughter of the cent’s engraver, wearing an Indian-style head dress.

This was the first time a coin in this country would depict a political leader. Those who created the first coinage in the country several centuries prior desired to distance this country from the monarchies of the Old World, where it was common for state leaders to decree their countries’ coinage should depict their images. American coins, for the most part, would depict a representation of “liberty” until the introduction of the Lincoln cent.

Public reaction

The design change in that year drew mixed emotions among the public. Some welcomed the change. As A.A. Leve wrote on August 15, 1909, in his letter to the editor of the New York Times in 1909, “… [T]he long line of illustrious Americans on our coins will have more education and patriotic influence on the citizens of our country than all the biographies and histories ever combined.” At least in the coin collecting community, you often hear of long-time collectors using their coins to teach their children and grandchildren about American history, so Leve may have been correct.

But there was also dissent. C.F.H. also wrote to the New York Times in August of 1909:

… [T]he chief aim governing a plan to honor such a being as Abraham Lincoln should be to comply with what his wished might be were he given full opportunity to express them. For, in failing to take account of so important a factor, such an honor as that involved in the new product of the mints of this freedom is left incomplete.

To think that Lincoln would find progress expressed in the recent insult to our National symbol of liberty, the “Indian head” on the cent, which, though it might be improved upon, should always remain, is inconceivable.

Throughout the twentieth century, the U.S. Mint was judicious in changing designs on coins. But over the past decade, they, and Congress who has been authorizing these changes, have been on a tear. Although the government’s stated purpose was to incite interest in coins again, it is clear that the U.S. Mint would much rather function like the Franklin Mint, releasing new products as often as possible so they can collect money from coin collectors.

The beginning of redesign overkill

First we had the State Quarters program, which began in 1999. Five new designs would adorn the reverse of the quarter dollar each year for ten years. The artistic and metaphorical engravings of prior centuries were replaced with run-of-the-mill images of whatever each state could come up with to commemorate itself. In 2000, the dollar coin came back in full force with the Sacagawea dollar.

The next coin to be awarded a new design was the nickel in 2004. This year saw two different designs for the reverse. In 2005, two more new reverse designs were used, as well as a new portrait of Thomas Jefferson on the obverse. The following year, the Mint found yet another portrait of Jefferson for the obverse and returned to the pre-2004 reverse.

In 2007, the Mint began a new dollar coin design in addition to the Sacagawea coin. To satisfy Presidents other than those already depicted on coinage, every American President would get a chance to appear on the dollar coin. Four new designs have been released every year since 2007, each with a portrait of a President, released in the order they took office.

The Mint couldn’t go another year without announcing something new, so in 2008 they decided to follow the State Quarters series with additional designs, including representations of D.C., Puerto Rico, American Samoa, Guam, the U.S. Virgin Islands, and Northern Mariana Islands.

Are we done yet? No. This year is the centennial anniversary of Lincoln’s first appearance on the cent. If you’ve looked carefully at your change this year, you may have noticed new penny designs.

A better idea

It’s time to stop commemorating people on our coins. Let’s go back to artistic designs depicting the idea of liberty, like this beautiful engraving of “walking liberty” by Adolph A. Weinman or another liberty engraving by Augustus Saint-Gaudens. Choose one design for each coin and stick with it for a long time, at least one generation and perhaps more than two. Give the public some time to get used to each design.

Continuous design changes don’t make coin collecting interesting for the long term. And for those interested in investing, I doubt that collecting any new coins will ever be financially worthwhile due to the vast quantities that are minted each year. All that is left for collectors besides the coin’s face value is the art. It might as well be good art rather than homages to elected leaders.

The Lincoln Cent (Letter to the Editor), A.A. Leve, The New York Times, August 15, 1909.
The Lincoln Cent (Letter to the Editor), C.F.H., The New York Times, August 6, 1909.

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Learning and Saving

by Jeff on October 8, 2009

in Family and Life

There are a lot of things in the world I know nothing about. Not knowing about something can be very expensive. Allow me to illustrate…

The brake light came on in our car a couple of weeks ago, and we started looking around at different places we could have them checked. We were a bit confused, because just a month earlier, when the car had been in for a yearly inspection, the tech told us that the brakes “passed with flying colors”. The funny thing is, two months earlier a different tech at the same shop had told us to change them soon, since we only had about 10% left on the pad.

Needless to say, I was perplexed. It just so happens that the brakes on our car are one of the things I knew nothing about.

After calling around and comparing prices, we found out that we were looking at about $150 more than we were expecting. I was hesitantly thinking about taking it to one shop when I decided to call my father-in-law. He’s very handy and knows quite a bit about cars. He offered to take a look at the car when we were up at his house over the weekend.

He pulled off the tires, and was able not only to teach me how to tell if the brakes were wearing out, but how to change and care for them. I also learned about rotating tires and how to tell if the shop really rotated them like they told us they did (and they didn’t!)

This simple trip saved us about $200 this weekend, and will save us much more in the future. I feel comfortable changing the brakes on the car, and I also know quite a bit more about how it works and how to maintain it.

There are some of you who are reading this right now who could probably change the brakes on your car in your sleep. But what happens when your computer needs to be repaired, or your daughter needs braces, or you need to find a yoga class on Monday nights?

Far too often we trust what we’re told by companies and what we see in advertisements and think it’s our only option. Just like I learned to be proactive about my finances, I learned that I can do more than just blindly take the car to the shop down the road and get ripped off. It’s a simple and obvious lesson, but one that I think more people could learn from.

We each have a built-in network of advisors – family, friends, co-workers – who are experts in areas we are not. Their insights and advice can not only help us learn, but save money as well. Learning to turn to these people is something that isn’t always natural, but can be very beneficial. These people are often more than willing to share their advice and knowledge, and will do so because they want to help you.

What are some of the ways you use the people around you to learn and save money?

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