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All in the Timing: Save Money by Buying when Demand Is Low

By , August 8th, 2007 | No Comments

Sometimes saving money is all about the timing. I’m not talking about saving your eBay bids for the last second of the auction, though that strategy may be helpful in getting lower prices for the things you buy. I mean timing your purchases for when the demand for the things you buy – yours and others’ demand – is the lowest.

It sounds strange for me to say you can save money by buying when your own demand is the lowest, but what I mean by that is simply that you should stock up when things are on sale. Don’t buy things you’ll never use just because the price is right, but if you know you will buy something in the future and you see a great deal on it now, buy it before you need it.

For example, my husband needed some long-sleeved work shirts last fall. I went to a local discount store and bought him several for $15-$25 a piece. In the spring, I saw shirts in his favorite style for $8 each and bought three. He protested, “But I don’t need any shirts! You just bought some!” He was right, of course, but I know that his shirts wear out quickly, and he’s worn the same style since we started dating sixteen years ago, so I saved about $35 in future expenses by buying them before the demand was there.

This buying-before-you-need-it strategy forces you manage your money well so that you have extra money to spend after your current necessities are paid for. If you buy on credit and pay interest on the purchase, most or all of your savings will disappear. Stocking up also works only until you run out of storage space, so be sure to buy only things you know you will use. If you buy anything that expires, goes out of style quickly, or gets outgrown, buy only as much as you can consume (or get your money’s worth from) before your purchases are no longer useful.

When buying something before you need it, make sure the prices are significantly lower, or you might be losing money. If, for example, I had taken the $24 I spent on my husband’s shirts and invested it for two years before I needed to buy him new ones, I could have made $5 on the money (assuming a 10% annual rate of return). Had the discount been less than that, I would have lost money by buying now instead of when he needed shirts. On the other hand, inflation could make the purchase worthwhile at even less of a discount.

Buying when overall demand is low often saves you even more money. Consider when you can get the best price for the things you are planning to buy – what time of day or time of year is best?

Time grocery store visits for the evening to get specials on meat and bakery items. (Fewer people want day-old bread and meat.) Buy clothes and cars at the end of the season or manufacture year, when retailers are making room on their floors for the next season’s/year’s merchandise.

Time your electronics purchases for a year or two after their release. Demand is often highest for these new products – especially those surrounded by a lot of hype – when they first hit the shelves, but if you’re willing to use slightly older styles, you can save a lot by waiting to purchase. I prefer to wait, anyway, so that manufacturers can work out all the kinks on new technology.

Demand for the hot toys of the year plummets right after Christmas. Last November, Elmo TMX dolls were selling on eBay for $75 or more. Now they are in stock on store shelves for $39.99. I would bet that quite a few of those bought last November are already buried on the bottom of toy chests across America, forgotten by the kids who delighted in them on Christmas morning. Next year, these toys will probably begin appearing at yard sales for $5.00 or less.

You could argue that the look on your child’s face on Christmas morning would be worth paying extra. Maybe so, but I would rather surprise my children with less in-demand (and lower priced) but equally enjoyable toys at Christmas and save the difference to spend on something else later. Maybe I can take them to an amusement park, after Labor Day when the demand is lower. We’d pay the same price, but we could get on more rides because the crowds will be smaller. Maybe the souvenir shop would have end-of-season sales on things we could buy to put away for Christmas, so we’ll have a memory of our warm-weather outing and avoid spending a lot on the toys that are in high demand next year.

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