High-stakes haggling: How to demand a better deal on your bills

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It would be fair to say that most Australian households are familiar with the popular hardware store's mantra, "if you find a lower price on the same stocked item, we'll beat it by 10%". But how many times have you taken up the offer?

Consumer group Choice says the practice of negotiating when buying goods and services isn't as common in Australia as in many European and Asian countries.

While price matching is often available across whitegoods, alcohol and electronics, we tend to shy away from haggling more broadly, even on more expensive purchases. For example, more than half the participants in a 2021 Finder survey said they preferred not to negotiate on price when buying a car.

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Choice puts this hesitancy partly down to supply - we sit at the end of a long global supply chain and can't always walk away if local competition can't deliver the goods. But there's also the mental block.

Demanding a better deal can feel like you're devaluing what someone is offering - and, indeed, you should consider the costs small businesses face when bargaining at this level.

But the art of negotiation is important for more costly deals. So, let's explore the realm of high-stakes haggling.

Pay rise or other work perks 

You should never approach pay negotiations solo, according to Judith Beck.

With over 25 years' experience in executive recruitment and mentoring women in financial services, Beck has found the most effective way to approach salary discussions is with advice from someone who's a little ahead of you on a similar career trajectory. She calls them "advocates".

By creating deeper professional networks - specifically, staying in contact with former managers and mentors - she says you come better prepared with realistic salary expectations and the nerve to stick to your guns. An advocate can also help you develop an attractive plan B.

how to negotiate a pay rise

"If you don't get the money you want, don't just agree to a review again in 12 months. Don't leave that room until you're happy," says Beck.

"Find what's important to you, that won't impact the business from a productivity or cost point of view but has a value for you."

This could be anything from flexible hours to hybrid work models, getting additional training through the business, extra leave entitlements during the company's quiet period or even being allotted a parking space. Beck says it's worth jotting down the reasoning behind your request and a plan for how you'll remain or become more productive with these changes. And don't overthink it.

"So many times when people go to their manager to ask for something, they build up too many scenarios about what may happen. And this automatically puts a block in front of them."

Right now, workers are in a great negotiating position. The National Skills Commission recorded another monthly increase in the number of online job advertisements (up 3.7% in March), equating to an annual rise of 24.1% that blasts right past pre-pandemic recruitment levels to highs not seen since 2008.

With great demand comes greater choice, so weigh up your options carefully.

Cheaper rate on your home loan

Going head-to-head with your bank may seem intimidating, but if you come armed with detailed research, you'll be in a better position to negotiate. Start by comparing interest rates on mortgages with similar features, including what your bank is offering new customers, and bring these to the table.

Then look inward. Do you have enough equity in your home to potentially refinance elsewhere? Is your credit score in good shape? Have you kept up with repayments? If you're an attractive borrower, your lender may be more inclined to offer a better deal to keep you on its books.

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But don't necessarily take the first offer. Lenders want to retain you at as little cost as possible, so see if you can raise that minimum commitment. If you're not satisfied with its offer, it could be worth using your research to refinance the loan with another institution.

These tactics apply to prospective borrowers, too, and it's well worth using them if you're facing a multi-decade debt.

For example, a 3.5% interest rate on a $500,000 mortgage paid over 25 years amounts to $250,935 in total payable interest. At 3%, you're looking at $211,317 in interest - that's almost a $40,000 difference.

Better deal on your insurances

Comparison is also your strongest weapon when driving down insurance costs. If you want to stick with your current car or home insurance policies, use online quotes from other insurers to bargain for a premium cut.

Be prepared to switch if your current provider isn't budging, but also research money-saving counter-offers - perhaps bundling multiple insurances works for you and earns a discount.

how to get a better deal on insurance

Make sure you're getting any other discounts you're eligible for, like ongoing premium reductions for not making claims or for maintaining certain security standards.

When it comes to health insurance, it pays to review your policy annually and ensure you're on a competitive plan that only covers necessities. While every person or family has different requirements, there's no point in paying for extras like optical or physio if you're unlikely to use them.

More equitable relationship 

Financial adviser and author Helen Baker has helped couples unpack their financial baggage at many stops on the relationship road.

To assess financial compatibility, she suggests starting slow rather than jumping straight in with hard-hitting debt and income questions.

"You can observe while you're dating - who's picking up the bill, how's that being managed? Over time you can blend in questions about how you like to spend your money, if you prefer holidays or investing," she says.

As things become more serious, you'll need to tackle the question of how you manage money jointly. Baker advises couples to keep accounts separate for as long as possible, until you're completely satisfied your financial goals and values align. Then see if combining finances could benefit you.

"There are economies of scale where you've got two incomes, maybe one home and one big retirement plan, plus opportunities to put money in different people's name for tax benefits," Baker says.

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While Baker says it's not the sexiest discussion, couples with considerable cash or assets under their names might consider a binding financial agreement (BFA).

As Australia's version of a pre-nup, it can delineate ownership of assets each person entered the relationship with and how combined finances should be split if the relationship ends, rather than leaving it up to Family Court decisions.

A BFA can be made between married or de facto partners and arranged at any point in a relationship, so long as both parties are on board and can stomach the legal fees.

If you are endeavouring to keep your finances separate - perhaps you're managing arrangements with a former spouse and children - don't forget about your retirement plan. Baker says if Centrelink considers you a couple, your assets will be assessed jointly.

"If you were entitled to the age pension but the other person has significant assets, they could actually be wiping you out from the ability to get that pension," she says.

If you built your financial future on your solo circumstances and a relationship changes things, it's time to have a frank discussion about if and how the other person is going to help support you down the track.

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Olivia Gee is a freelance personal finance writer. She has a double Bachelor's degree in Journalism and Media and Communications from the University of Wollongong.