How to Negotiate in Everyday Life So You Can Save More and Retire Richer

In a previous article, I gave a simple example of how learning how to negotiate could help you to save an additional $44,500 for retirement. In fact, I argued that learning to negotiate is one of the fastest and most effective ways to boost your retirement account.

What I didn’t have time to do was explain how to actually negotiate. So, in this article, I want to share some of the negotiation techniques that I have learned over the years.

You won’t find any academic studies or theory here… just from the streets techniques that I learned in my 40+ years in the business world, working with some of the top negotiators on the planet.

More importantly, these are the techniques that I personally used to pay down over $100,000 in debt and build a comfortable retirement that I would have never dreamt of just 10 years ago.

Just Do it!

Nike was right. Success in life (and in negotiating) starts with action. If you want to be a writer, stop talking about your book idea and start writing. If you want to learn how to negotiate, start negotiating. It sounds simple… and it is.

The problem is that most of us don’t know where to start. Or, we are so afraid of rejection (yes, failing to persuade someone feels like a rejection) that we just shut up and take what the world offers us.

So, if you are looking for a simple way to start negotiating… here’s a simple tip. Every time you purchase something over $200 in value, ask one of the following…

“[Frowning] That’s a bit more expensive than I would have expected. What kind of a deal can you give me on this?”


“[Looking Thoughtful] You know, I’d love to take this home with me… but, I just don’t think I can justify the price to my [wife/partner/goldfish]. Is there is anything you can do to help me get the price down a bit?”

Sometimes, you’ll get lucky and the sales rep will just knock 10% off of the price. Other times, they may give you an inside tip that a big sale is coming up. Or, they may tell you that you can get 5% off by signing up for their newsletter (you can always unsubscribe). But, regardless, you’ll never know until you try.

Not in the market for any big-ticket items but still want to work on your negotiating skills? No problem! Just head down to the local flea market or look for garage sales in your area. Don’t leave until you have negotiated on at least 10 items. Repeat this once a month for a year and you’ll soon feel like a master negotiator.

Master Your “I Want it Now!” Mentality

One of the biggest advantages that many older adults have when it comes to negotiating is… time! So, it always surprises me how many of us still feel like we need things *right now!*

There are several reasons that learning to walk away from transactions will make you a better negotiator.

First, salespeople hear people say that they will have to walk away all the time… most people don’t. So, it’s not enough to tell someone that you’re going to leave a deal on the table… you need to be prepared to actually do it.

Second, learning to walk away forces you to look at your alternatives. And, as we will discuss in the next section, you should never enter a negotiation without knowing what your backup options are – or, as they say in negotiation speak, your “BATNA (Best Alternative to a Negotiated Agreement.)

Here’s a simple exercise that you can use to combat your “I want it now” mentality. Pick one big ticket item (over $200 works for most people) that you want to negotiate on. Then, go out and negotiate for the same item at 3 different stores. Keep track of who gives you the best price, but, don’t actually buy the item.

Do this once a month. It’s a fun game that’s free to play!

Have a Backup Plan

This is the only academic term that I will use in this entire article, but, it is such an important one that I just couldn’t resist including it. The term that I want to introduce here is “BATNA” or Best Alternative to a Negotiated Agreement. In other words, it represents your backup plan or “what you will do if the negotiation fails.”

Before you go into any negotiation – from asking for a decrease on your credit card interest rate to arguing for a reduction on your cable bill – you should know your BATNA.

For example, let’s say that you are in the market for a new car. The monthly lease payment that you have been offered is $400, but, you feel like you can’t afford more than $350. In this case, you might right your BATNA(s) as:

  • Find another dealer who can offer a lower interest rate
  • Wait for a seasonal sale on this model
  • Buy a used car of the same type, but, from an earlier year
  • Use public transportation
  • Ride your bike to work
  • Buy a different car

Sometimes you can use these points directly in a negotiation. For example, “Look, I really do like this car, but, here’s the thing… I was just talking to XYZ motors across the street and the new Mustang is $2,000 cheaper. Plus, with the 1% interest deal they have going on right now, I could walk away with one for $330 a month. I’d love to work with you to find a solution here. Do you have any ideas on how we can make this work?”

But, beyond the direct benefit of having alternatives to fall back on, there is a psychological power that comes from knowing that you have options.

Just knowing that you have a backup plan will help you to fight the tendency to just accept someone’s offer for fear of missing out on the emotional benefit of a potential purchase.

Learn to Love Silence

Sometimes the most powerful thing you can say in a negotiation is *nothing at all*!

I’m not sure why we hate silence. Maybe it has something to do with our innate desire to please others. Or, perhaps it’s our lack of patience that makes us want to jump in and fill any gap in the conversation. But, for whatever reason, silence is a powerful negotiating tool.

I’m not kidding when I say that I have seen people get 20% discounts just by not instantly responding to a salesperson’s first offer. It goes something like this…

Customer: So, how much does that TV cost?

Sales Person: This one? It’s $999.

Customer: [Silence, looking unimpressed]

Sales Person: [After about 5 seconds] Well, actually, I could probably get my boss to let me go down to $899 for this one.

Another related technique is just to repeat the price that you are given and then shut the heck up. It goes something like this…

Customer: So, how much does that TV cost?

Sales Person: This one? It’s $999.

Customer: [Raising eyebrows] $999?

Sales Person: [After about 5 seconds] Well, actually, I could probably get my boss to let me go down to $899 for this one.

It doesn’t really matter how you introduce the silence into the conversation. The main point is to not be afraid of letting the conversation go quiet.

You may be surprised by how easy your negotiations become when your partner is doing all the work!

Be Bold – Dig for Gold and Shoot for the Moon

One final piece of advice that I want to leave you with is to be bold with your offers. Whether you are a buyer or a seller, it often makes sense to give an offer that you know will be rejected.

This technique worked especially well for me when I was in the market for a used car. I simply watched the online listings of 10 cars that I was interested in. Somewhat inevitably, 3 of these cars were still on the market, 2 months after I first saw them.

Once I checked the Blue Book value, I reached out to see if any of the owners would be willing to accept a price well below the market value of their vehicle. And, of course, I made my offers contingent on a full inspection and clean title check.

This technique allowed me to get a used Land Rover for $5,000 below the initial listed price, which was already a tad below market.

After running the car through the necessary checks, I paid cash and everyone was happy. I went on to drive the car for 3 years before selling it for almost the same amount that I purchased it for!

Another time to use the “shoot for the moon” technique is when someone refuses to be the first person to name a price. This is a somewhat unpleasant game that some people try to play and I go around it completely by naming a price that I know to be too high.

Most of the time, this forces the other party to make their own, more reasonable, offer.

Don’t Waste Your Savings

One risk that comes with negotiating is that we will end up spending our winnings.

Especially when big-ticket items are involved, I try hard to transfer any savings from the transaction to my investment account right away. This prevents me from sticking my hand in the cookie jar and ending up no better off than I was before the negotiation.

For an example of just how far a little negotiating can go, please check out my article, “Save $44,500 More For Retirement By Developing This One Simple Habit”

At the end of the day, you don’t need to be a master negotiator to save some extra money for retirement. Even if you just get in the habit of asking for discounts on all big-ticket items, you will save $100s if not $1,000s a year.

Now, get out there and make some money!

Do you regularly negotiate prices on your big purchases? Do you feel like you are a successful negotiator in your everyday life? What negotiating tips would you like to share?