Personal Finance Advice

My family and I have lived in the same house for close to a decade. When we moved here, there were six palm trees on our rather small lot, and I could trim all of them on my own. A few years ago, several of the trees had grown to a height that was just too high for me, so I had to hire a tree service to trim the trees from their extension ladders. As of this past year, two of the trees had grown so tall that they could only be trimmed by someone using a cherry picker like the type that utility workers use. If I were to trim the trees twice per year, it would cost me about $1800 per year to trim my trees!

Needless to say, despite the protests of my homeowners’ association, we are allowing the trees to enjoy a more natural, untrimmed, look for the time being. Of course, I can only blame myself. I was a first time home buyer when we purchased our home, and neither my wife nor I had ever lived in a tropical climate before. I did not know what to expect from my palm trees and I foolishly did not think to ask.

Have you ever considered how many purchases you make every year for which you do not really have sufficient information on which to base your purchasing decision? If you purchase a new TV, do you really know that you are getting the best value for your money? When you buy a car, are you sure you are getting what you think you are getting? If you are shopping for an appliance or a pet, do you know what questions you should be asking before you get to your actual purchasing decision?

I recognize that there is a steep learning curve associated with spending one’s money wisely, but here are five ways to answer your questions, and even to identify the right questions to ask, before you are actually face to face with a sales person.

Ask your family and friends about their purchasing decisions: Whatever you may be purchasing, ask your family and friends about their experience in buying the same thing. Thinking about buying a new appliance? Send an e-mail off to everyone you know and find out if anyone has any experiences that they might want to share. Considering changing brands of shampoo? Call your hairdresser and find out what he or she thinks. Looking at a new set of golf clubs? Call the golfers that you know and seek recommendations. You have a huge consumer network at your finger tips if you just reach out to the people who you know best and who know you best.

Research your purchases on-line: There are a multitude of on-line resources available for shoppers. If you are considering a purchase, visit e-commerce sites like Amazon.com and read customer-generated reviews of the product before you make your purchasing decision. I also very much like epinions as a source for generally unbiased consumer reviews on a host of buying decisions. Of course, Consumer Reports is also a great research tool — both on-line and in print.

Talk to all of the people who will be using the item that want to purchase: Before you make a purchasing decision, consider who will be using the item that you are purchasing. Make sure that each user wants the item for the same reason. If you bring an item home and it lacks functions that are necessary for the happiness of one or more users, you will have wasted a lot of time and possibly a lot of money.

Comparison shop at more than one store: Talk to sales people at more than one store. Do they tell you the same things about the same products or do some sales people like one product more than another competitive product. If you hear a lot of different stories and opinions about a product, it is probably for the best if you do not purchase it.

Don’t make major purchases from sales people who you do not trust: Even if you are sure you want to buy a product, make sure you only make major purchases from a sales person you trust. If you do not trust the sales person, it will inhibit your ability to ask questions and you will not be fully confident in the answers that you receive to your questions. Trust is key. If you do trust your sales person, ask him or her to produce documentation on the expected life of your planned purchase and on expected maintenance costs, if any. Also, ask for the sales person’s candid thoughts on what you should be purchasing and why.

Have you made any purchases that resulted in unexpected costs for you months or years later? How do you collect data about major purchases before you pull out your credit card to close the transaction? How do you determine whether you can trust your sales person?