Power Over Purchase - Part 1

Alright, so let’s get down to the nitty gritty. This is a FUN class. This is the most entertaining lesson, and it is the one that, if you get it, it will change the way you look at things. If you get this lesson, then it will almost guarantee your financial peace. Because while the emergency fund and getting out of debt are some amazingly important steps, that paradime sift we talked about in March comes from what I’m going to teach you tonight. What I’m going to teach you just might rock your world, it might just make you look at money a little differently. It might just put you on the right path towards changing your family tree. So, make sure you get this class tonight!

We are going to be discussing how to buy big bargains and how to have power over our purchases.

Caveat Emptor or Let the Buyer Beware

By now y’all know that I’m a facts kind of gal. I like statistics and so here are some that I found interesting. We already learned that we live in the most heavily marketed culture in the history of the world.

In 1971, the average consumer had 500 advertisements presented to him each day.

Today, we have over 4000 advertisements presented to us each day. That is an 800% increase! Holy cow! We have more people selling us more stuff, in more ways than ever before. It’s no wonder that the phrase caveat emptor or buyer beware is certainly more applicable today than ever.

Companies make their money based on selling us stuff, and they are good at it. They have training rooms full of people, teaching them how to perfect the art of selling their goods and services. This isn’t a game people, and if you think it is, then you’re going to be broke for the rest of your lives.

We have to Just Say No. Yes, that’s a 1980’s flashback, but seriously….it applies. Just say NO.

And because of their marketing on TV, Radio, the internet….it is much more difficult than ever to say no. Did you know that about half of the news is sent out by the public relations department of a company? It is packaged to look like news, but if you pay close attention, all the little kids in the puff piece are wearing osh-kosh clothing, or they’re standing in front of a Dairy Queen while talking about how hot the weather is and how a nice cold ice cream cone goes a long way. On a slow news day, you’ll see these things. We are hit from every angle, and the best trick of the trade is repetition.

I can hear you all now, “Oh, but I’m a wise consumer, that repetition stuff wouldn’t work on me.”

Okay, let’s play a game. You fill in the blanks….just shout out your answers….but you WISE consumers probably won’t know any of these, will you?

1. Bye, bye Miss American ____, drove my ____ to the levy, but the levy was _____.

(((shame on you!)

2. Have it your _____.

3. Melts in your mouth, not in your ______.

Yeah, you’re right….repetition doesn’t work, does it?? It has a HUGE effect on your buying!

Some other things that affect your buying are:

Brand Recognition Name brand versus Generic. Seriously, do you think Kroger and Walmart have their own factories that make all their generic products? No, they don’t. The same people that make the store brand products make the name brand products – they just have different packaging. Those CVS brand paper towels look suspiciously like the Bounty ones. Hummm….

Shelf Positioning. The most expensive name brand stuff will be eye level. The store brand stuff will either be up on the top shelf or on the bottom shelf. Why? Because people who are in a hurry will grab the first thing they see, and if it’s at eye level, guess which one gets picked up? The expensive one.

Packaging & Color. People get paid very well to study the reaction of people to series of colors. That’s why some products have insane packaging…because it catches someone’s eye better than the competition.

Product Placement. This is a BIG deal. They have professional product placers that come in and position things just right so as to optimize their sales. Take those ice barrels at the gas station for example. They are always at the most convenient spot. Two inches to the right, they’re a nuisance because they block to much of the aisle. Two inches to the left, and they don’t sell as many because they’re not obvious. Do you think they keep fresh ice in there at all times for your benefit? No….they do that because when it’s hot outside, there’s nothing that looks more refreshing than pulling that nice, cold bottle of soda out of that ice barrel, watching the ice slide down the bottle, and you know that that is going to be one fine bottle of sprite you’ve got there. They know that you’ll pay more money for that bottle of soda than you would for an entire 12 pack of cans at the grocery store down the street…why? Because it’s placed and presented so that you want it.
Seriously people, this is not a game. It’s what they do on everything – big and small purchases.

Significant Purchases

Let’s talk about significant purchases. Generally speaking, a significant purchase is anything over $200. In our house, it’s anything over $100…in yours it might be anything over $500. Whatever your idea of a significant purchase is, there are some things you need to know.

First, your body actually goes through physiological changes when you make a large purchase (or are about to make a large purchase).

Your eyes dilate slightly, endorphines are released, sweat forms in your palms and upper lip, adrenaline is released, and your heart rate shifts slightly.

You get so excited that you buy that thing. You get it home and then you get hit with it. Buyer’s Remorse. You know, that feeling that you get after making a big purchase without really thinking it through? Where you say to yourself, “what did I do?” and you usually feel sick and scared. Yeah, I bet we’ve all had a case or two of that in our lives.

Did you know that realtors have actually learned to tell people to expect the feeling of buyer’s remorse? Yep, when they started warning people, they found that fewer people would back out of the contracts because they woke up the next morning, felt the buyer’s remorse, and said, “wow honey, we’re normal” and just moved on with the bad purchase.

Well I am going to give you some ways that you can avoid that buyer’s remorse feeling, and that you can have power over purchases.


Power Over Purchase

You have to learn to say, "No!" This is important. We’ve all seen the kids in the supermarket that are flailing on the ground pitching an ever-loving fit because they want those Lucky Charms and they want them now. Well, I hate to tell ya this, but we’ve all got those little kids inside of us. We women, at the furniture store unleash that kid “I know we have china we never use, but I want that china cabinet NOW!” and the men, at the electronics store unleash their kid, “But it is a 52 inch HDTV with surround sound and I know we have a 50 inch but I want 2 more inches. I want it NOW!” We need to learn how to tell those kids inside ourselves to shut-up. Adults delay pleasure, children do what feels good.

As an adult, there are 5 things you do before purchasing: The unwritten #6 is to pay in cash because all of your purchases should be done in cash. If you do these things you will either be very glad you purchased it, or very glad that you didn’t.

1. Wait Overnight. But what if it’s gone the next day? There are 10 more TVs shrink wrapped in plastic on a palate in the back. If it’s gone, then maybe you weren’t supposed to have it.

2. Consider Your Buying Motives. Exactly why do you want it? Do you want it because it’s new and shiny? Do you want it because you need it, or because the neighbors have one and you want one too? (Oh, there’s that grocery store fit kid coming out again)

3. Never buy anything you don't understand. Especially insurance and investments. “Oh, I’d never do that” Oh really….and how long did you have your VCR before it stopped flashing 12:00????

4. Consider the Opportunity Cost. Factor in what opportunity you will lose the chance to do by making that purchase.

5. Seek the council of your spouse. You do NOT make a large purchase without first seeking the council of your spouse – seek their wisdom. Don’t you hate it guys when your wives get “a feeling” Proverbs 31:10-11. If you take the council of a virtuous wife, you will have no lack of gain. Women, you have to virtuous – not a barking Chihuahua. Larry Burkett says, "Ladies this does not give you permission to become the holy spirit." Guys, what’s good for one is good for the other.

Now that you’re on the same page and you’re ready to make the big purchase (because you did all 5…well really 6 things), then you need to learn that you should only buy big big bargains.

You do NOT have to pay full price for anything ever again. Seriously, just go under the assumption that everything is negotiable. In America we get in our fleeced car, fill it up with gas card gas, drive to the mall and put something on our 28% credit card because it had the word “Sale” over it. In other countries, there is a process to buying things. How many of you have been to other countries? Negotiating is a way of life. And I’m amazed at how many people get offended when I tell them about the great deals I’ve gotten.

You do not have to harm someone in order to get a good deal. For some reason, we have it so engrained in our heads that if we get a good deal, then we are hurting someone else in the process. That is entirely not true.

You can come to a win/win situation. I’m not saying you need to go in and be relentless, but you can reach a win/win situation that both parties can be happy with. At the mall we’ll automatically just pay whatever the price is for something that we want, but if we go to a yard sale, man….you’ll get vicious. I’ve had many a yard sale and some of those ladies will try to talk me down on a $10 for $.50. They’re vicious, but I bet they pay full price for everything at the store. And you know what….when they’re vicious like that, they don’t get the deal. So I’m hoping to show you how to get the deal so that everyone wins.