Are you spending your money wisely? | Wolfgang Schnellbaecher

You're listening to Ted Talk's Daily, where we bring you new ideas and conversations to spark your curiosity every day. I'm your host, Elise Hugh. Almost every time I open a social media app, I see content about budgeting or how to control everyday spending. But in this talk, procurement expert Wolfgang Schnellbacher flips the script on money habits and shares why, for him, everyday spending is actually one of the most powerful and overlooked skills we have in our toolbox. Drawing on lessons learned from elite corporate buyers and personal scenarios, he tells us three deceptively simple rules that can turn our routine purchases into smarter or intentional decisions. I've got two questions for each one of you. Question number one, how much money did you spend in your entire life so far? That already takes a bit to estimate, right? Question number two, did you spend your money wisely? If you hesitate now and are not so sure, it likely means you're not a good buyer. Frankly, because you have not even defined for yourself what good buying truly is and that, sorry for the bitter truth, despite your buying things pretty much every day. And good buying can have such a massive effect on your entire life and through your lifetime you will spend a fortune, if not several fortunes, considering we're in Dubai, spending it more life, will either make you have to spend less or for the same amount, make your life more luxurious, comfortable, sustainable, fun, or whatever else you want it to be. And the good news is, there are people you can learn it from. As a procurement leader in BCG, I work with them throughout the world, high tech companies, auto manufacturers, American Big Pharma, Middle Eastern oil companies, from Swiss club manufacturers to Middle Eastern mass producers, they all have to buy a lot of things. Steel, spare parts, intellectual property rights, fruit. Just last week I did a live auction for a Norwegian salmon farm for fish. My promise to you is, if you learn from their combined knowledge of these professional procurement teams, you will be a good buyer for the rest of your life. And on top, it's easy. It only points down to three rules these companies do right. Number one, prioritize on what really matters. Now that sounds simple, doesn't it? The truth is, it's not. Now there's a few words missing, prioritize on what really matters for a group together. In every company, in almost every household, there's a few players. And even for yourself, you're oftentimes not so sure. How to prioritize healthy food versus cheaper prices? How about a more comfortable buying experience versus sustainable products? Do we pay extra just to make our neighbor jealous? You might laugh, but I'm from Germany and you might argue we build an entire auto industry purely on that feeling. Now, professional buyers, they actually read the corporate strategy. They align with business partners to find out what's it really that makes our company better. The superstar buyers go even further. They graphically pin down what are the priorities and then share with everybody. For your life, maybe at the start, it might look like this. During education, start of your career, you don't have so much money. And therefore, you want to have fun, but you have some cost-consciousness. A bit later, you might find the family, get children, and you care a lot about quality of the food, of the toys, of the furniture, just to have it all right for them. Maybe a bit later, you care a lot about comfort. You just want to have an easy-going lifestyle. Now, the core thing is, to be a good buyer, you don't have to follow a predefined set of rules. It's just for yourself and you are loved ones. You need to have these priorities very clear. And now, we are ready at rule number two, influence your allies. Imagine the following situation. You're off to buy a new car. You arrive at the dealership. And the first thing that happens is your kids climb into the car. They have 30 boots on, and they yell and tell you how much they love it. The colors design, the design, everything. You're already a bit on your back foot, starting to negotiate. And the car dealer basically tells you that right now, cars with dirty seats are a bit rare. He can't do anything on the price. In that moment, your wife gives you look like, please don't mess it up. I also want this car so much. You will very likely not not buy the car. You will for sure not buy it at a good price. In business, the good buyers say no. They have to align with their allies up front. Who's going to say what in a negotiation, after negotiation, before an negotiation? Only if these things are clear, they can ensure they really strike the best deals. The super star buyers go even further. They have the ability to influence stakeholders on what they really want. Let me tell you about the inverting method. I once had a workshop with a big railway company. We were supposed to reduce the cost of big due tracks, and we had the group sitting there of rather old buyers, basically telling us everything is optimal. After 60 minutes, I was still in front of an empty flip chart, panicking a bit. My colleague, however, was very cool. He just turned around to the crowd and said let's forget this exercise for a moment. What would you do in the following situation? You just get a new boss, he's younger than you, and he's firing you. It's unfair, and the only thing you can do to strike back is the next three months when you're still in the company increase the cost. Do you have any creative ideas to increase the cost without just raising prices? And now the ideas we're flying. We could buy two long tracks we have to cut. We could buy two short tracks we have to wear together. We could buy too many. We have to put on stock. We could order too late, so we have to pay a fee. We could pay too early. To not have interest rates. We could pay too late to pay a fine. All of a sudden the flip chart was full, and my colleague turned around again. Are we sure we are really at the optimum in each one of these dimensions? And when you're buying a car, you can do the same with your family. What would we have to do to increase the price? We could buy it in the spring. In an expensive city, only go to one dealer in a rather high class part of the town. We could stay right away. We would only go to you to the dealer. We could tell them how much we love the car. We could not ask for a rebate. And once you've listed all these things and then turned it around, then you'll really come close to what's an optimum. To me, the inverting method is also a great reminder. Good buying can be fun, and good buying can be creative. And now we are ready at room number three. Negotiate from strong starting positions. People might think strong negotiations have something to do with strong arming somebody, with being mean, with being aggressive, almost yelling at people. The opposite is true. It starts way before, and it has a lot to do with the alternatives you build. You need to align what are alternative suppliers. What are maybe alternative products? Good buyers may even extend the usage of the existing solution, just to ensure they're not under time pressure. Sometimes they destroy alternatives just to make a point. Now, that sounds a bit odd, doesn't it? But in this world, you learn best from extremes, and let me tell you an extreme historical example. In 1519, hand under quarters arrived in Veracruz, Mexico. He only had 500 soldiers in front of him the vast Aztec Empire. What he did is he gathered his people on the beach, made sure the Aztec saw him, and then he's dismantled and partly sunk his ships. Just to make a point, we will not go back. Now, what does this mean now for good buying? What does this mean for my life? I know a couple who were supposed to buy a house, and they had two alternatives, alternative one they loved. But it was slightly too high. Alternative two, let's call it house number B. They didn't like as much, but they could afford it. Now, the owner of House A, which they really liked, was playing them. Playing them on the long bench, basically waiting for a better offer to come in from somebody else or from them. At one point, the wife just made a notary appointment. For House B, went back to House number one to the owner and basically said, "This is our good buy meeting. We sadly will not come back. Here's our approval of the notary appointment for House B. Thank you for all the discussions." Only then, when it became serious, the owner of House number one gave in. Only then, they were able to strike through. There was no yelling needed, no bluffing. It was just a plain playing of the alternatives from a position of strengths. Whatever you have spent in your life is gone. Whatever you will spend next, think about these three rules and you will spend your money wisely. Thank you. That was Wolfgang Schnellbacher at TED at BCG and Dubai in 2025. If you're curious about TED's curation, find out more at TED.com/curationguidelines. And that's it for today. TED Talk Staley is part of the TED Audio Collective. This talk was fact-checked by the TED Research Team and produced and edited by our team. Martha Estefanos, Oliver Friedman, Brian Green, Lucy Little, and Tonsaca, Sung Mournivong. This episode was mixed by Christopher Faisy-Bogan, additional support from Emma Tobner and Deniella Bollarezzo. I'm Elise Hugh. I'll be back tomorrow with a fresh idea for your feed. Thanks for listening.