We were delighted to welcome Cameron Huddleston on to the show today. Cameron is the online editor for the personal finance publication Kiplinger.com, and she offered us some valuable insight on retail and the most financially viable times to pick up big-ticket purchases.
Cameron began by explaining that there are two fundamental ways to maximize your savings. You can either earn a lot more, so that your spending is really chump change compared to what you earn (that’s the top 0.1%), or—like the most of us—you can stretch your earnings by maximizing your savings, especially on big-ticket expenses. And that’s where retail strategy really becomes important for 99% of the population.
Product purchasing is very much dependent on the seasons and varies significantly from one product to another. So, although there are bargains out there all year round, there are definitely better times of the year to shop for particular items.
This means, though, that you can plan ahead if you want to score the best deals. While this doesn’t necessarily help with emergency items, in many cases, you can delay purchases for a few months, plan your spending, and rest happy in the knowledge you got a reasonably good deal at the right time.
And the savings can mount up. It’s perfectly possible to save 30%, 50%, or even 75% off large items, meaning that you have hundreds or even thousands of extra dollars to spend each year.
Locking In Savings
Cameron is an expert on this topic and walks us through when the best sales happen on various big-ticket items—products such as cars, furniture, mattresses, appliances, computers, cruises, airline tickets, and more. She also talked us through the tradeoffs that you must be willing to make (don’t worry…they’re not that hard!) to lock-in great savings.
Cameron explained that even something such as booking airline flights or cruises can be hugely seasonally dependent; in fact, she recommends planning major trips nine months ahead of the actual journey. While there are last minute deals available, you should also bear in mind that these often involve the bottom of the barrel seats, cabins, rooms, and other aspects of travel that other customers didn’t want and providers can’t sell! So that’s not necessarily the way to go if you want to enjoy the trip of a lifetime.
Disclosure: The opinions expressed are those of the interviewee and not necessarily United Capital. Interviewee is not a representative of United Capital. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions. Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances. The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by United Capital.
Steve Pomeranz: Smart shoppers know that every item has its season. Buy certain goods at the right time of the year and you can enjoy substantial savings, especially when it comes to pricey investments ranging from bedroom sets to big screen TVs, to new cars, to computers. To figure this out I’ve asked Kiplinger’s Online Editor Cameron Huddleston to join me and speak about her list of the best times to buy some big-ticket items. Hi, Cameron, welcome.
Cameron Huddleston: Hi, thank you for having me.
Steve Pomeranz: Let’s divide this into categories, right now what are the best items to buy to get the best deals?
Cameron Huddleston: May is a great month to get deals on things you need for your home, and we’re talking large appliances and mattresses. Memorial Day weekend sales, in particular, is an excellent time to find discounts on these items. Refrigerators, especially, will be marked down because the new ones are often released.
Steve Pomeranz: Mm-hm, mm-hm.
Cameron Huddleston: So the retailers want to get their current inventory off the floors, so they’re going to mark down the older models and then, during those Memorial Day sales, you will even see discounts on the new models that have just come into the stores.
Steve Pomeranz: Okay, so that’s very smart. So, yeah, the idea basically is look, in order to gain wealth, you either raise the bridge which is earn more income or you lower the water which is spend less. And this is in that second category, so if you’re going out to buy some large appliances…actually, you know what?… I have to buy a large appliance [LAUGH], so I’m going to remember this discussion. Now is the time, May is the time to do that, right?
Cameron Huddleston: May is the time to do that because not only will those refrigerators be discounted, but you’ll find some deals again, over Memorial Day weekend on a lot of the other large appliances, the dishwashers, the washer dryer sets, the stove,
Steve Pomeranz: Right, okay good. Now, what about computers? When is the best time to buy a computer?
Cameron Huddleston: There are actually three times during the year when you can find good deals on computers. We’re just in one of those times in April. Typically, new models are released. So the older models are discounted. But if you wait until August, September, sometimes even late July, there will be a lot of back to school sales. And both new and older models will be discounted. And we’re talking discounts, they’re usually 30% or more during those back-to-school sales.
Steve Pomeranz: That’s a big deal. So if you’re thinking about buying a computer right now, and you say perhaps July, you’re going to start seeing some discounts, maybe it’s a good idea to wait a few months.
Cameron Huddleston: Right, certainly wait a few months.
Steve Pomeranz: Okay, all right, let’s see, what about summer stuff like grills or patio furniture. When’s the best time to buy those?
Cameron Huddleston: We are certainly going to see a lot of promotions for these, and you might even see some sales advertised over the Memorial Day weekend, perhaps the fourth of July. And the discounts will be okay, but to get a really good deal on those items, wait until the end of the season, September, Labor Day sales. That’s when the discounts are going to get really deep. We’re talking 50%, 70%. Now the discounts are going to get deeper as you get into fall, but of course, your selection is going to get smaller.
Steve Pomeranz: Yeah, well, it’s the old saying, buy straw hats in winter. Have you ever heard that?
Cameron Huddleston: [LAUGH] Yes, when no one else wants them.
Steve Pomeranz: When nobody else wants them, and I don’t know who wears a straw hat anymore. Obviously, this is from a century ago. But it’s this idea that, if you’re going to buy winter clothes and, let’s say, fashion is not that key here, because you’ll obviously end up with last season’s stuff. Buy those things when summer is approaching and the winter season is over. So it’s kind of the same thing with patio furniture and grills, right?
Cameron Huddleston: Right, and it is for so many seasonal items too. You’re going to find the best prices at the end of the season.
Steve Pomeranz: So, we’ve talked about what to do in May. We’ve talked about computers; that July, August, and September is a good time to go in if you’re going to be buying patio furniture and, obviously, you don’t need it for the summer. But you can wait and it is best to wait, if you’re looking to save money. What about airline tickets, is that a seasonal thing?
Cameron Huddleston: It can be if you are traveling to popular destinations. Of course, if you want to go to the beach in the summer, you know a lot of people want to go to the beach in the summer or during the spring break. So as far in advance you can book those tickets, the better deal you would get. If you wait until the last minute, you’re not going to find deals.
And in fact, if you wait in the last minute to buy [LAUGH] your tickets anywhere, you are very unlikely to find a deal. Cheapair.com did a study and looked at millions of fares on flights and found that there’s really a prime booking window between 114 days and 27 days before departure when fares for domestic flights are the best. If you wait to buy your ticket 14 days in advance, fares are going to jump an average of about $174. But $111 and, then, $174 if you wait till seven days before departure. So you’ve got to pay a lot more if you wait until closer to your departure date.
Steve Pomeranz: I can understand a range from 27 days to 114 days. But in the material here, it also states that the time to get the lowest price on a ticket for a domestic flight is 47 days in advance. That just seems really weird to me.
Cameron Huddleston: [LAUGH] And again this is an average.
Steve Pomeranz: It’s an average, that’s why.
Cameron Huddleston: It’s an average. And what’s that they found highlighting that it is for domestic flights. But it really raises the point that you do need to call in advance. Now granted, if you book your ticket too far in advance, you can end up paying more. The exception would be if you’re flying overseas to Europe. And really, you need to book almost as soon as those tickets go on sale, which is typically 11 months in advance of a departure.
Steve Pomeranz: Wow. So actually, if you are going overseas, the earlier you book, the better?
Cameron Huddleston: Yes.
Steve Pomeranz: And that’s a given, okay. Well, that’s important because we have not booked our flights to Italy yet so [LAUGH]. We’re thinking about going in the fall, so I think we’re a little late.
Cameron Huddleston: Well, you know what, fall is a really good time because it’s more of a shorter season there.
Steve Pomeranz: Okay.
Cameron Huddleston: So you’ll still probably able to find some good fares. And some good deals on accommodations.
Steve Pomeranz: But you talk about booking for airlines and trying to get a seat, and timing is so important. A lot of people in my area go on cruises. I come from South Florida. What is the optimal time for booking a cruise?
Cameron Huddleston: This takes a lot of advanced planning. You need to book nine months to a year in advance if you want to get the best price on a desirable cabin.
Steve Pomeranz: Mm-hm.
Cameron Huddleston: If you really are just concerned about price, then there are last minute deals, but you’re going to end up with, perhaps, the cabin that no one else wanted. So if you find you just want to get on a cruise, and you want to pay as little as possible, you can find some last minute deals. Otherwise, you really need to plan well in advance.
Steve Pomeranz: That’s what you hear a lot about down here. People are saying you know, you book at the last minute, but what is never mentioned is whether they get the kind of cabin that they want to get. That’s the second part of the equation that doesn’t seem to be mentioned too much. So price wise, there’s always this idea that there’s unsold cabins. They’re going to discount them most dramatically right before the cruise takes off, so you can get a great price. But again, you’re just really getting what’s left, right?
Cameron Huddleston: You are. You’re getting the leftovers. That’s why they are unsold.
Steve Pomeranz: Yeah.
Cameron Huddleston: No one else wants them.
Steve Pomeranz: Exactly. So nine months to a year in advance to get the best price and the desirable cabin.
Cameron Huddleston: Yes.
Steve Pomeranz: Okay. I’m speaking with Kiplinger’s Online Editor Cameron Huddleston. And she’s joining me to talk about all things buying and when to buy and what the best season is. Cameron, what is the best time or is there a best time to buy a car.
Cameron Huddleston: Ideally, you want to wait until the fall. That’s often when newer models are released, and so the dealers are offering a lot of incentives at that time to get their older models off the lot.
Steve Pomeranz: Yeah.
Cameron Huddleston: They’re going to offer price cuts. They’re going to offer rebates. They’re going to offer zero percent or low interest financing, so it’s really a good time to get a deal. But you might not be able to wait until the fall. So what you at least need to try to do is wait until the end of the month because the dealerships, they do have sales quotas to meet. And so they’re more willing to negotiate on price if you wait until the last day of the month. Ideally, if it falls on a weekday.
The weekend, there’s going to be more traffic. So you might not have quite as much leverage but certainly waiting until the end of the month to go in and get ready to make a deal.
Steve Pomeranz: Well, so that’s some fantastic advice. So, let’s think about this for a second. So buying in the fall when they’re turning over the new line, that’s good because they want to clear inventory. I think we kind of all know that. But this idea of buying at the end of the month, but necessarily try to do it on a weekday because it’s slower then.
Cameron Huddleston: Yes.
Steve Pomeranz: And you may have more chance to really wear down the salesmen and make sure he wants to sell cars because he’s got to meet certain volume goals. The weekend may be less attractive because you’re in more competition with more people strolling the floor.
Cameron Huddleston: Exactly, and if you’ve ever heard that you should wait until the end of the day to get a deal, that’s a myth because a dealer’s going to stay late if he has to make that sale.
Steve Pomeranz: [LAUGH] So that doesn’t really matter.
Cameron Huddleston: No, it does not matter.
Steve Pomeranz: Oh, okay, great. My guest, Kiplinger’s Online Editor, Cameron Huddleston, and we were talking about the best times, the best seasons, and just the best ways to buy all the items that we need. Thank you so much for joining us, Cameron.
Cameron Huddleston: Thank you, so much, for having me.