Have you heard about emotional purchase? Or compulsory buying? These two are just the same thing and these are what’s happening to you when bidding for something at an auction. You have this dire desire to win without actually minding you are already way out of your budget. Before we discuss how to overspend, let’s first talk about why we overspend at auctions.
Why Do We Overspend?
Who could ever resist the temptation and lure of the actions inside the auction house? We always have this curve towards the thought of winning such a great deal, picking up what we look to be a perfect bargain. There’s an urge inside us that screams “you have to fight for that item!” Without us realizing the value is already over what the ideal pricing should be. Since auction involves a serious amount of money, overspending might cost you a hefty amount in the long run.
Below are the lists of some of the best advice we can provide inorder to avoid overspending in an auction. Try to analyze and keep your mind open about our suggestion.
Know You Budget
Just like in any other purchases you made in life where you put a price on your mind on how much money you can spend on groceries for example before heading to the store is the same as pointing out the maximum amount of money you can spend in one day at an auction. If you do auctions frequently, you must have already known how fast phased this industry is and if you will come unprepared you will most likely be all over the place at the auction itself. Determine the item you need and the amount you can afford to buy those items. Keep that budget in mind and always think that any number above your budget is not worth a purchase. If you will be dealing with things that involve a serious amount of money like purchasing a house or a luxury vehicle then it would be best to have a financial advisor to determine the budget you should have before bidding.
Try To Close The Deal Early
This will mostly depend on the seller and why they are selling the property, for example. If they are intending to sell this fast then you should go ahead and try to offer this seller to close. This is not always a guarantee but oftentimes it works. Especially for sellers who badly needed the proceeds of the sale they most likely would accept the offer. You can save more when you do this to prevent the current bidding price from shooting up when you wait for the bidding time to finish.
List Your Purchase Plan
This is a very simple step yet very essential in avoiding overspending. This is what you do when you do your grocery and you’re on a budget, you simply list what you need. Same goes here, list of the items you need and stick to it. Do not even try bidding on the items not on your list as you may end up regretting winning the bid that is not on your budget. Focus on what you came there for, not for what you think might be a good buy. Do not negotiate your plan, respect it and you’ll end up respecting your budget too.
Auction is a process, do not rush on spending out all your money on the first few items. Keep in mind that you should save money for the right item. Wait for it and spend it, without rushing to blow all your budget on less priority items. It is alright to take a chance and bid for items you think are at a very bargain price but think about what you’ll use that for? If the answer is I don’t know then you might consider staying away from those items.
Calm your Competitive Drive
Though auction is a competition, it is also giving you the urge to spend more and win a bid. The competitive drive inside us will always shout that you bid on it, that’s normal, but you always have to learn to calm your competitiveness. Learn how not to feel bad whenever the current bid already exceeds your budget. Think of it as done, you’re out of the game and that’s alright because you need to stick to your budget. You have drawn the limit of what you can afford spending for that day so you should try your best and follow your plan. It could be difficult during the first few tries but when you get the hang of it, you’ll see a much better result.
Presence of Mind
Being attentive may be the key, listen to the bid, never lose count and just raise your card to win, this could be fatal for your budget. Always double think about the limit and budget you have established. Stick to it and if you feel like in the middle of a bidding war that no one seems like to lose, back off, this may not be for you as you may end up overspending again. Presence of mind can save you from breaking the bank, always remember that.
Come in ready, physically, mentally and budget ready. You don’t want to come to an auction feeling under the weather as it may affect your decision making capability as well as being mentally okay for you to have the right mindset and not make bad decisions in a flash. Go to an auction with a full stomach to avoid the feeling of stress due to hunger which is the last thing we want to do. In the auction environment it is not always the money that has to talk, it is you and how you process what’s going on around.
There are many ways to avoid overspending in an auction and when you find yourself setting the limit and following it then you could say that you are performing healthy auction practices.