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Rule #1: Never Pay Retail Print E-mail
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The first rule of being cheap that I want you to commit to is NEVER PAY RETAIL.  If you stick to this rule, your life is going to get a lot easier and stay that way.  With very few exceptions, almost everything that you purchase can be had at a discount.  Always expect a deal.  Always.  Once you do this, you will find yourself getting deals on almost everything.  It’s an acquired skill and might be hard at the beginning if you’re not an experienced ‘Dealster.’  But over time it will get easier and becomes second nature.

Let me give you an absurd example that will mitigate any notion that sometimes you "just have to pay retail."  My wife and I were having our second child and we decided that we really needed to take a vacation before the baby came.  For whatever reason, my wife’s friend mentioned that she really ought to go to Bora Bora.  For those of you who have no idea of where Bora Bora is, it’s a beautiful island in the South Pacific near Tahiti.  It’s also known as one of the most expensive vacations you can take and rooms in a 5 star hotel (which is the dominant hotel class on the island) go for $500 to $1,500 a night!  Throw in airfare and food and you are looking at $7,000 + for a one week vacation.

Now most people would say that there’s just no way you are going to get a deal on a 5 star overwater bungalow in Bora Bora.  Well, I was determined that I just wouldn’t pay retail. When I started researching for ways to cut down the cost, I initially got some pretty depressing results.  Overwater bungalows in 5 star hotels started at $750 a night and even the few 3 star hotels were charging $500. Painful!  Package deals were running at $4,000… per person.  But I wasn’t about to give up and after a little bit of work, I found a 5 star hotel offering two free nights when you booked five.

I did a little bit of probing and discovered that there was a reason behind their generosity – they were doing some construction.  But the construction was only on the beach bungalows which were ONLY about $450 a night.  With the 2 free nights, we were talking $321 a night, which still gave me sticker shock but was pretty reasonable when compared to the alternatives.  The kicker was, one of the major travel websites was allowing me to book the beach bungalow at the lower price, but of course, none were actually available - because I knew they were being renovated.  I booked it anyhow and ended up with an automatic upgrade to an overwater bungalow which wasn’t being discounted –a $750 room for $321 a night and worth every penny.  All in, we probably spent $4,500 on that trip, but we could have just as easily paid over $9,000.



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annamarie  - What is your time worth? |2010-02-16 05:16:51
I agree that it is good to look for deals and love the story about Bora Bora. However, if you use the ruler of "Your Money or Your Life" and figure what your time is worth - I would like to know if the savings achieved are worth the time researching. Just a thought. :)
Omiewon  - Good Point |2010-02-16 08:40:43
Annamarie,
I have often thought about whether the savings I get are worth the time. In the case of something like Bora Bora, it's pretty easy, $3,000+ for maybe 15 hours of work, about $200 an hour (after taxes or about $300 an hour pre-tax). At the time, my time was worth a ton for both work and family.

I agree sometimes though saving $15 on airfare spending an extra two hours is really not worth it. What I have noticed is that the more of this you do, the more efficient you get, so there is some upfront investment.
 
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