BUYING POWER.

Plugging into savvy consumer shopping habits can add up to substantial savings over the long run

IT'S BEEN MORE THAN 20 YEARS SINCE DEBBIE SLATER was caught in the clutches of the welfare system, but the OB-GYN nurse practitioner will forever cling to the memories of those challenging times.

"I was in nursing school and my husband left me flat. He didn't pay any child support, took all of the furniture and that was [that]," she recalls.

Money was extremely tight, so Slater clipped coupons and practiced strict budgeting. "I couldn't afford to go beyond my budget because the monthly payments that I received from public assistance were my only income," Slater says, "So I allotted a certain amount for all of my expenses every month and put the money in separate envelopes. Soon I realized that I could stay within my monthly budget and still get some of the things I wanted by buying in bulk and putting lots of items on layaway. Now, there is a lot more money to budget, and more envelopes, but I still practice the same strategies to this day."

To call Slater an accomplished professional would be an understatement. In addition to her medical work, the world-traveled 46-year-old reigns as the queen of several entrepreneurial ventures From the Website www.clipperkeeper .com, she sells equipment cases for barbers. She also sells lingerie and makes and sells party favors. Slater's strict penny-pinching strategies and supreme bargain-hunting skills have also enabled her to sock away enough money to acquire four houses, several furs, a car and a hefty investment portfolio. "It's all because I've learned the value of delayed gratification and smart shopping," she boasts. "There is no way I could have these things without being a savvy consumer."

How do spending habits affect your ability to become wealthy? In this article, we'll show you how to assess the way you purchase before you buy, while you shop and after you make your purchases. Our goal is to help you become a high-powered consumer as we focus on principle No. 3 of BLACK ENTERPRISE's Declaration of Financial Empowerment (DOFE): To be a disciplined and knowledgeable consumer, Here are some guidelines:

BEFORE YOU BUY

* Establish the difference between your needs and wants. "A need is never realized while standing in a store," insists Mary Hunt, author of Mary Hunt's Debt-Proof Living: The Complete Guide to Living Financially Free (Broadman & Holman Publishers. $14.99), Hunt, a reformed spender, says you should "plan your purchases rather than shop. Instead of wandering into a mall or store to see what they have, only purchase the items you need from your prepared list." For the most part, any item that will directly impact your basic survival (health, food and shelter) is probably something you need and should take priority over anything you want. But even these items aren't absolutes. Determine whether you can maintain quality by choosing a less-expensive brand. Or, decide if you can wait until the item is on sale or fits in your budget.

The same test should be applied to items on your "want" list. The widespread use of cell phones is a perfect example, says Nancy Youman, co-author of The Consumer Bible: 1001 Ways to Shop Smart (Workman Publishing Inc., $15.95). "People automatically buy huge amounts of cell phone time. But if you're not going to use that time, get a plan that offers fewer free minutes at a cheaper price."

* Closely examine your motives for making a purchase. "We [African Americans] often buy things to make us appear popular when we really should select products that are more affordable. Our need to maintain a particular public image has damaged us economically," states Linda Weatherspoon Haithcox, national manager of economic development at the NAACP's headquarters in Baltimore. You should never purchase a product to bolster poor self-esteem or because you want to compete with someone else. Your purchases should be based on your own preferences and what makes sense within your particular lifestyle and income.

* Investigate alternative products and services as well as manufacturers, "Make a list of the things you plan to use the item for and let that guide you in your choice of which model will suit you. Then plan to spend only as much money as you need to get the utility that you're looking for," suggests Youman. She recommends consumers refer to resource books, professional organizations, friends, family, consumer magazines and the Internet for price and product comparisons as well as a list of manufacturers. Also see if the stores you plan to do business with have any complaints lodged against them at the Better Business Bureau or a local consumer agency. Cheapskate Monthly (800-550-3502, $18 annually), for example, is a newsletter published by Hunt and a great resource for tips on getting out of debt and improving spending and saving habits. It also has a listing of shopping alternatives.

* Familiarize yourself with quality products. "I go to very upscale stores to look but I never buy, especially on the first visit," notes Slater. "I then go to Burlington Coat Factory or some of the other, less-expensive outlets to see if I can save money on the items I want. Most times, I find it cheaper." It's important to expose yourself to quality items, even if higher-end products or services aren't in your budget. If you're shopping for a suit, for example, peruse top fashion magazines and visit department stores that have a reputation for offering high-quality goods. Then ask the salesperson to help you select a variety of fine suits and try them on. Closely examine the fit, buttons, finish, labels and price tags of the ones you like. That way you'll be able to identify a good substitute or you'll know when you're really getting a good deal on a particular label.

Now that you know the type of product you're looking for and have narrowed down your selection of retailers, here's some advice for making your purchase:

WHILE YOU SHOP

* Take your children along. "After a child gets [to be] a certain age, we relinquish our commitment to shop with our children," cautions Haithcox. That means we're sending our kids out into the world without teaching them how to properly evaluate their purchases. Once you become a more savvy consumer, pass this information along to your children. According to Haithcox, "We should encourage our kids to make purchases based on their needs, which products offer the best quality within the constraints of their budget, as well as which companies invest in their communities."

* Use your research to assess your purchases. "Remember the results of your independent research. You should know which brands offer high quality and at what price," advises Youman. "It's important to have a lot of information. For example, if you're purchasing a car, you should know how much the car should be selling for in the marketplace (see "Don't Get Taken For a Ride," Verve, June 1999). The same thing is true for a house. If you know what other houses in the neighborhood recently sold for, then you know if the seller is being reasonable."

* Shop off-season and get price quotes from at least three different retailers. "Shopping around [and purchasing at the right time] can save you huge amounts of money," says Youman. For example, you'll save on things like window air conditioners, fans, lawn furniture, grills, lawn mowers, pool equipment and camping gear in late August or early September. Winter necessities, including Christmas decorations, can typically be had for 40% to 60% off from January through March. And when you're shopping for bargains, focus on the final price, not the percent it's discounted. Says Slater, "A lot of times stores raise theft prices and then offer big discounts. But if you track the prices of the items you want to buy, you'll know when they're trying to pull the wool over your eyes."

* Avoid impulse purchases. The International Mass Retail Association reports that half of all sales are impulse purchases, but you should only purchase items that you've planned to buy. If you come across an item that you want, put it on next week's list. Also, get a good night's sleep before you make a decision about a big-ticket item, advises Hunt. She says, "You'll probably change your mind in 24 hours. That's why salesmen want you to act sooner rather than later."

* Don't believe the hype. Go to an independent source to assess any information you've received from a company's representative or advertisement. Remember, sale offerings are a marketing tactic to get you into the store. The store hopes that you'll purchase additional items. Don't let a good deal draw you into making an unplanned purchase--particularly if it has a hefty price. And if you find that a product you planned to purchase was misrepresented in an advertisement, or the retailer advertised a lower-priced item only to convince customers to buy a higher-priced one when they arrive (a scam called bait-and-switch), report the offender to your local Better Business Bureau.

* Examine brand loyalty carefully. "African Americans are very brand loyal--almost to a fault," comments Haithcox. What have the manufacturers of the products you financially support done for you lately? Check resources such as the Internet and the NAACP's Consumer Choice Guides (see "Flex Your Financial Muscles," July 1999) to find out. Adds Slater, "I'm not in agreement with being brand loyal. We're making companies rich that don't have any allegiance to the African American community--especially in the area of clothing."

* Make sure you read and understand any contract you're required to sign. According to Youman, your contract should include any verbal promises made by the seller, substitutions and any amendments that were agreed upon. You should also ensure you understand the seller's refund or return policy and get the specifics in writing. Avoid store payment plans that charge interest or finance charges for purchases on layaway. And "if you have questions that aren't answered, don't hesitate to look elsewhere," advises Sheila Adkins, public affairs manager for the Council of Better Business Bureaus Inc. in Arlington, Virginia.

* Don't buy extended warranties. "Most people never use the extended warranty, so it's money that you're paying out for nothing," insists Youman. This is especially true for long-lived, easily maintained appliances like dishwashers and refrigerators. If you're still thinking about buying an extended warranty as added protection against costly repairs, assess the expense based on the "10 Percent Rule" outlined in Beat the System! edited by Jeff Brendenberg (Rodale Press, $27.95). It stipulates that an extended warranty should never cost more than 10% of the product's purchase price.

* Be honest about your credit card use. "A lot of times we use plastic because we're not sure we have the cash to pay for the item, and that's not a good strategy. A $300 suit is seen as $15 a month. That's why running up debt with a credit card is simple to do but difficult to get out of," Hunt explains. "The closer we can get to cash, the closer we'll be to becoming savvy consumers." On the other hand, if you pay your balances on time and in full every month, aren't paying an annual fee and you're able stay within the confines of your budget, using your credit card actually gives you access to an interest-free loan and other benefits. "There is a certain protection that comes with shopping with a credit card. If the item turns out to be faulty, broken or inoperable, you can dispute the charge with your credit card company and possibly get if off your account. That's much more protection than a cash sale." How have you used your credit card in the past? Your response should dictate how often you use your credit card in the future.

* Speak up about the price. According to Youman, "Pricing is probably a little more flexible than people realize, and you lose nothing by [trying to negotiate]." According to Beat the System!, most negotiable items fall into one of three categories: major appliances, vehicles and consumer electronics equipment. You can also bargain on the extras--such as delivery and installation charges--to reduce a final price. For the most part, there is less pricing flexibility in department stores, discount stores and catalog showrooms. But the more expensive and widely available a product is, the more room you have to negotiate. You should feel good if you need the manager's approval for a deal you've struck. It's probably a good one.

* Distinguish bargains from bogus offerings. Beware of lotteries, multilevel marketing and pyramid schemes, companies that require money before you receive the product or service (particularly employment or modeling agencies), credit repair ploys (see "Cleaning Up Your Credit," July 1998) and easy-does-it loan or credit card offers. According to the Better Business Bureau's Adkins, "If it sounds too good to be true, it may be a scam."

AFTER YOUR BUY

"If the retailer or manufacturer hasn't taken any more money from you than you intended to give them, then you're a winner," Hunt declares. And if you're happy with your purchase, you're in great shape. So, share your good news with the manufacturer, retailer and your friends and family. Just be sure to save any manuals, sales receipts and written warranties that accompany your product or service.

But what if your shopping experience was less than ideal? Here are some solutions:

* Communicate any problems to the seller or manufacturer. Check the warranty to see who you should contact if you have questions. If your paperwork doesn't specify, call the toll-free number listed on the product or start with the retailer. Youman advises that you "express your concerns in a calm, friendly tone and tell them what you would like them to do to resolve the matter." If your phone calls don't get results, follow up with a brief typewritten letter. It should include the date and place of purchase, the name of the retailer, product information (serial or model number, warranty terms), a description of the problem, how you've tried to resolve the issue, who you've spoken to in the past and how you want the company to respond. (Do you want a retire & repair or exchange?) Don't forget to include copies of all relevant documents, such as the warranty, receipts and contract. Also, consider sending your letter certified so you know who signed for it.

* Record your efforts to resolve the problem. Write down the dates and times of your phone calls, as well as the name of the contact person. Keep copies of any letters that you write to the company and save the letters it sends to you.

* File a formal complaint. If you feel you've given the company ample time to respond and you still aren't satisfied with the results, file a complaint with the Better Business Bureau (www.bbb.org) or regulatory agency. You can also consult the National Consumers League (www.nclnet.org) or your local consumer agency for guidance.

To avoid this sometimes lengthy process, Slater says it's best to buy from "retailers that don't have any qualms about taking their merchandise back. Plus, if you do your homework at the onset, you'll have a lot [fewer] returns." For Slater, being happy with her purchases and reaping the enormous benefits of her savvy shopping habits don't compare to the joy she feels when she notices her married son practicing these same strategies. "For Keith's birthday, I gave him some money in a card," she remembers. "Shortly after he opened the gift, he dashed out the front door. He didn't know it, but I heard him whisper to his wife: 'This is great. Now I can get my coat off of layaway.'"

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