Personal Finance Advice

Online auctions can be a great way to get good deals.  Sellers offer both new and used items as well as some hard to find items that shoppers would otherwise have to search far and wide for if it wasn’t for the Internet.  Some online auction sellers occasionally sell items as they no longer need them, but other sellers actually make substantial livings by selling merchandise in these auctions.

Using the auctions wisely can save you a lot of money.  Chances are you can find plenty of deals on items you would spend much more money for then if you had bought them in a regular store. 

There is another side to online auctions.  Your personal finances can take a big hit if you get so caught up in the bidding that you wind up spending a lot more for items than you originally planned on spending.  You may also find that items you “win” cost a lot more once the shipping costs are factored into the equation.   

Here are some do’s and don’ts for keeping your personal finances in shape while delving into the world of online auctions:

Do:  Look for the best deals.  If you have the time to spare then you can search through all the offerings of the online auction and find the items you want at the lowest prices.  The appeal of online auctions is that you can sometimes find outrageously good deals, especially if you happen upon something that nobody else has bid on.

Don’t:  Get caught up in a bidding war.  Always keep in mind that you’re simply looking to buy something.  It’s not a competition.  Far too often people get so caught up in the bidding aspect and take it as a personal insult when someone outbids them.  This results in the buyer upping the bid to spite the other bidder.  The only person who wins in this scenario is the person selling the item that caused the bidding war to begin with.

Do:  Check the shipping and handling charges.  Sometimes sellers inflate the shipping and handling charges in an effort to make more money while other inflate the charges simply because they don’t know how much it will truly cost to send the item to the buyer.  If you see an item at a low price don’t leap right into bidding; look at the shipping and handling charges too.

Don’t:  Lose track of how much money you bid.  Suppose you log on to an online auction to look for one particular item but then start browsing around.  You put in a bid here and a bid there, and then the next thing you know you’re the winning bidder for several items.  It’s really easy to bid on more items than you realize you’re bidding on, and this can cause big financial problems since a winning bid is a legal contract to pay in most instances.

Do:  Stick to your budget.  If you’re planning on browsing through an online auction you should first set a budget.  Figure out how much money you’re willing to bid before you start submitting bids because this will ensure that you don’t spend more than you meant to.

Most online auctions prefer services like PayPal for payments, and this is a great idea because the seller never actually gets to get a glimpse at your personal financial information since the money is sent through a third party.  Think twice before sending a personal check to someone who you don’t know, and don’t even think about sending cash or giving your credit card number directly to the seller.