How to Save Money by Negotiating

I felt cheated.

I was at my barber’s shop the other day. He was about to finish my haircut when another customer walked in. The man asked my barber how much he charges. My barber says N2,000. Of course, that was how much I have been paying–never thought I could save money with some negotiation.

However, the man mumbles that he can’t pay more than N1,000 and then immediately decides to take his leave. To my utter shock, my barber stops him and asks him to come back. I felt cheated. I have been paying too much for my hair with all my knowledge of negotiation that I have failed to apply. This also meant that I had not been able to save money.

Whenever we hear the word negotiation, we immediately start thinking of those movies where some mean-looking lawyers are negotiating an aggressive takeover of a company. We think of hostage release negotiations where lives are at stake. With these images, we conclude that negotiation is only for very large deals and not for us.

However, negotiation is an everyday affair. You do it every day unconsciously. You negotiate with your barber, your mechanic, your spouse and even your employer. You negotiate when the supermarket attendant offers you a NGN 50 sweet because she doesn’t have change for you.

But have you been losing a lot because you don’t think about this process?

What is Negotiation?

In simple terms, negotiation is the process of coming to an agreement with an individual on how to best solve a problem. Creating concessions both parties could make in the event of a conflict of interest.
As such, negotiation isn’t about winning all the deals. It is about finding a common ground that will make both you and your partner think you’ve made a good deal.

Why do people not negotiate?

We are often held back by emotions. We do not want to look too cheap. We do not want to hurt the feeling of others. We fear negotiating will make us come across as petty, inconsiderate or lacking empathy. A vast number of people get drained emotionally when they negotiate. So they’d rather walk away.

If your goal to save money is really an important one for you, you need to master the basic art of negotiation.

What is the secret to negotiation?

The secret to negotiation is preparation. You should know what you want and what the other party might like.
Knowing what you want will prevent you from taking just any offer thrown at you. What if you do not like what you’re offered? That is why you should have an idea of what the other party might like. Because chances are if your partner gets what they like, they might give you what you want.

For example, someone offers to sell a piece of cloth to me for N10,000.

What do I want?

Realistically, I cannot pay more than N6,500.

What would the seller like?

The seller wants N10,000 but also wants to sell as many pieces of this cloth as possible. So she will like to be introduced to the people on my network. She might also like it if I buy more than one.

My counteroffer:

Give me the cloth at N6, 500 and I will get you 10 of my friends to buy from you.
If I succeed, I would be saving N3,500 just by offering an alternative value that I have (My friends).
The more of “what the other party might like” scenario you can create, the better you will get at negotiating and the more you can save money and get what you want.

Looking for other ways to manage your savings?

Cowrywise is a savings and investment platform that helps you automate your periodic savings. You specify a date and Cowrywise will automatically save an amount from your bank account into your Cowrywise account.

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