Purchasing Routine make informed decisions

 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.

woman impulse buying

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.

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.

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.  

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.

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

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.