Bargain master!

Dear Dave,Can you share some tips on bargaining, whether for a used car or even a washer and dryer in the classifieds?Ray

Dear Ray,This is a great question! Bargaining is one of my favorite things to do, but it’s a little harder for me to get away with it these days.

There are three points to remember when it comes to getting a bargain. The first is that whoever has the most information wins. This means you need to shop around, do some online research, and become an expert on the value of the item you want to buy.

Number two, don’t be afraid to flash the cash. Money, especially cash money in your hand, is an emotional thing. Lots of times it will motivate someone to accept your offer—even if it’s a little less than what they want for the item in question.

The third thing is patience. Don’t get all hot and bothered about a certain item at a certain place. Calm down and be willing to wait for a deal. You lose your ability to negotiate a great deal—not to mention your walk-away power—if you get all worked up and married to something before you know what else is out there!—Dave

Dear Dave,Will it improve my credit score, and help my ability to buy home later, if I pay my rent 30 days early for the next two or three years?Tanner

Dear Tanner,No. Your landlord probably isn’t going to report early payments to the credit bureaus. Just make sure you pay it on time. It is smart to pay a few days early, though - maybe seven to 10 days ahead of time, but for a different reason. That way if something goes wrong at the bank, you’ve still got time to fix the problem. Chances are your credit score won’t be impacted by your rental payments unless you’re late, and especially if you have several late payments. That could sure become a black mark against you later!

I’m not a big fan of the FICO score, because it doesn’t measure things like assets, income or net worth. It’s really just an indicator of your interaction with debt. This is one of the reasons why it’s really dumb for companies to base lending decisions solely on a FICO score.

Fortunately, you can still find lenders that provide mortgage loans based on manual underwriting procedures. But they’re getting harder and harder to find!—Dave

Dear Dave,I’ve got my $1,000 emergency fund in place, and I’m working toward paying off my debt. I was wondering what you think about credit card insurance offered through the card companies? It doesn’t sound like a bad deal if they’ll make the minimum payment for you if you become disabled or unemployed.Terri

Dear Terri,Credit card insurance is just another gimmick, so I think I’d pass on that if I were you. I don’t buy gimmicks.

Here’s the deal. You should already have long-term disability insurance through your employer. If you don’t, then you need to get it today. That way you’re already covered and can make the payments if you happen to become disabled somewhere down the road.

Remember, you’re also working your way out of debt and building your emergency fund. So in a sense, you’re going to use your emergency fund as insurance against bad things happening while you knock out that debt and beyond!—Dave