It seems like everything we do is set up on a payment schedule. We make monthly payments for rent, mortgages, credit cards, school loans, and car payments. We even make payments for our music — Pandora One, anyone?
It’s a convenient way of life, especially since few people have the means to pay for all the things they need at once.
It’s all good, until it’s all due. Daycare fees are due. Rent is due. Credit card payments are pushing the calendar, too. How are you going to make all your payments and still buy groceries? Don’t forget that Annie needs new shoes this month — how will you possibly pay for them?
Something has to give somewhere. But where?
You’re overstretched and can’t see the light. Before you consider something as drastic as bankruptcy, or giving up and falling behind, try negotiating with your lenders for lower payments. Negotiations are an art. When done correctly, they can score you extra cash at the end of the month, so that you don’t fall short ever again.
Ways to master the art of negotiation
• Be a good tenant/client/ customer.
If you’re often late on payments, it’s unlikely that your landlord or phone service is going to show leniency. On the other hand, if you’ve proven yourself trustworthy and honest with your on-time payments, you may find them more likely to empathize and agree to your request for a reprieve.
•Know what their competition is up to.
Entering a negotiation knowing rates, fees, and lower payments from other services can give you a leg up when dealing with your lender. An informed buyer always has a higher chance of success than an uninformed one. If you know what you’re talking about, they’ll be more likely to negotiate with you.
• Time your requests.
If you’re considering negotiating a contracted service like your lease, it’s best to negotiate when the demand is low. For real estate, that happens in February. If your lease is approaching renewal, use empty waiting lists to leverage a better monthly payment from your landlord. If your phone contract is almost up, now is the time to haggle for a better price — since the company knows you could potentially walk away without a fee.
• Be polite.
Instead of entering the conversation in a domineering manner, ask the company what you should do, while reminding them that you can get better prices elsewhere. If you’re dealing with your phone service, politely say something like, “I’ve just found out I can get a better contract over at Sprint. But, I really enjoy the service here. What should I do?” Warning: don’t go into this bluffing — you may get called out.
•Be the best type of customer: a referrer.
By sending new business to your landlord or other provider, you increase your value to them. They’ll want to keep someone who’s a positive (and free) promotional service for their business. Use that information in your negotiation. If you’ve sent your landlord three new tenants that have proven as easy to deal with as you (they’ve kept their apartments clean and don’t cause disturbances), politely remind your landlord of the revenue you’ve helped bring to his building.
• Know your credit score.
For many lenders, your credit score weighs heavily on your ability to pay and to pay on time. If you have good credit, use it as leverage in your request for a lower monthly payment. Landlords want tenants with excellent track records on their residence list. This also comes in handy if you’re negotiating with your credit card companies. Good credit means less interest. Find out what you should be paying for interest and ask for slightly less, which will lower your monthly payment.
When you start your polite conversation with your lender, begin by looking them in the eye and giving them a firm handshake. If you’re negotiating over the phone, let them hear your confidence. Even if you’re prepared in all other facets, your efforts will be undercut by a wishy-washy voice and timid eyes. Practice what you want to say and how you want to say it. Also practice power poses, such as standing with your hands on your hips. These stances have been proven to enhance success rates when trying to win at negotiations.