It is Health Insurance Week but rather than Blog about Health Insurance. I wanted to Blog about routine . It's probably not open enrollment for you now , but when it was how many of you just choose the same health plan. Is it really the best for you?
I do not mean lowest cost. I mean best for you. Your health is important and making a good decision is paramount for long term good health.
What about your benefits? If you have good benefits, especially preventive care why aren't you using them? Take advantage of them so you can live long and prosper.
If it's health, homeowners or car insurance, your cell bill, or any other repetitive charge gym membership etc, its good to review at least once a year to see if its still the best for you. Rates vary the best car insurance for you in orange county may not be the best in Long Beach ( LA county).
Buying products or services involves making choices . This is true whether
we are buying a new car or
hamburger
buns. And, making wise buying decisions can mean the difference between reaching
our financial goals and always being short of cash.
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| woman impulse buying |
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Therefore it is surprising how much of our purchasing is
driven by
1.
Routine, or habit
2.
Impulse
3.
Good, Better Best Mentality
Regardless of price or product complexity, good purchasing decision skills
will pay off. Depending on when we buy, where we buy, and how we buy,
hamburger buns can cost $0.99 or $4.29. A car that costs $20,000 at one
dealership might be available someplace else for hundreds or thousands less.
Obviously the stakes are lower when we are only making a small purchase,
but the process
of smart buying and decision-making is the same.
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| battling computers |
Every product or service we buy is designed to solve a problem:
hamburger buns allow you to eat with your
hands, cars provide transportation. But the way we define the problem can have
a huge impact on how we solve it.
If we define the problem as "I
need a new car" then our only solution is to buy a new car. But if we define
the problem as "I need reliable transportation" then this opens the
door to alternatives, like using public transportation, carpooling, buying a
used car, or riding your bike or walking. Especially with a major purchase take
a few minutes to really understand why we are making the purchase.
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| marriage proposal |
If you just love your hamburger on a Kaiser Roll buy it.
For us we found that we normally only used
a few rolls in the package and ended up not using the rest. It had
always been habit to buy the package of 8 .
So we
looked at alternatives,
Just buy a
few
rolls.
Wrap the burger in a lettuce leaf
( actually this is delicious with a
Portobello instead of a burger) or skip the bun.
The point here is that if bun buying is on
auto pilot, just like stopping at Starbucks every morning, then maybe we should
consider breaking the habit.
I’ll just talk about my grocery shopping process.
1.
Costco just doesn’t work for us due to sizes,
I tend to buy groceries at Trader
joes , Walmart, Smart and Final, Stater Brothers and Sprouts and La Carretta (similar to Gonzales/Northgate). In Tustin Trader Joes, Smart and Final and Sprouts are alomst next to each other so this can be one trip.
2.
I have learned prices enough to know which products makes sense at which store. Based on what we like. Example Meat, Cilantro, and some other products are much cheaper adn better at La Caretta.
3.
I’ve come to realize that sales Stater’s and Sprouts ads follow a pattern so I know when
to buy extra’s. At Wal Mart I’ll stock
up on non perishables as I visit them
the least and combine with sundry shopping.
4.
Now this doesn’t
mean we don’t splurge. I will pay extra for fruits and vegetables at a farmers market if really fresh.
5.
And yes I go with a list and find that minimizing waste saves much money.
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| supermarket shopping |
We are not bottom dollar but if I compare to just buying everything at
Albertson's ( the closest market) the savings
are quite significant, and because I consolidate shopping and other trips the time is
not that much longer.
Major Purchase buying is all about
making good decisions. And in order to make good decisions, we need to know our
options. So after we define the problem, the next step in buying is making a
list of all possible choices -- everything you can think of. Remember, we're
not evaluating yet, we're just making a list of everything we can think of to
consider. The key is to have as many alternatives as possible. More complex and
important purchases--like buying a car or a home--require more alternatives.
It's important to be able to tell the difference between needs and wants. We
may want a new car, even though taking the bus will get us where you need to
go. Or we may want a new television, even though our
old one still works. These factors are
important in helping us Achieve Our Goals.
Sometimes we just need
to satisfy a want … but better with a small
purchase than a large one.
We get into trouble when we confuse what we "want" with what we "need." As soon as you decide you "need" something,
then other alternatives for solving your problem are taken off the table. Your
mind is made up and the decision-making process is over.
This is
why a car so often is an impulse buy. WE DON’T TAKE THE STEPS NECESSARY TO GET
A GREAT DEAL because we ”need” to but it now.
Since so often we are going to fill wants we might as well save
money on the purchase, but adding a short delay to do the right research .
Our last car purchase is a good
example.
My wife wanted a new car a VW GTI
(not turbo or diesel ) with navigation and review camera.
given that her old car was a 2001 model and
now used by our daughter, hard to argue too much .
We probably don’t “need” a 2
nd
car
(but
at least it’s not
some other
brands)
however its smaller and safe and
fun for her to drive.
Therefore my job
was to keep the cost down rather than change
her decision, the if and what we were going to
buy.
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| professors comment wakes class |
1-
Research showed me than only the upgraded versions came
with navigation.
Adding it in the
aftermarket saved money on the navigation and kept us from purchasing unwanted
other features.
2-
Buying at the end of the model year helped get the
lowest price. Since we will keep the car
a long time when we bought it didn’t make
a difference.
3-
I checked a number of car buying sites. True car had the lowest price
“guidance”. I printed this out and took
it with me. I now knew the
most I would pay for the car.
4-
I had my financing
lined up first ( through schools first) . Again I now knew the most I would
pay for the loan. If the dealer can beat
it great!
5-
We went to the auto
show and drove a GTI. By doing
so we got another $500 off the car due to an auto show promotion.
Did we buy the car for the absolutely lowest price?
No,,
but we got what we wanted for a reasonably low price.
By waiting and research however I know we
saved a lot over just walking into the dealer unprepared.
Good Better Best
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| cheese wiz gas station |
Why do gas stations sell 87
89 and
91?
For the most part its not because
there is a real need for
89.
It’s because when we are given a purchase
choice between good better and best often will chose “better” and spend a lot
more for features we don’t need.
Automobile trim levels and televisions are great examples.
A lot a money is spent on upgrades and the
one feature you want is set so you have to buy 5 you don’t.
Its up to you to decide if 95% of what you
want at a good price is fine or do you need 98 to 100% for a lot more money.
Until next week.
