Tips for Bargaining Like a Pro

Dear Dave,

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


Dear Ray,

This is a great question! Bargaining is one of my favorite things to do, but its 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, dont 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 offereven if its a little less than what they want for the item in question.

The third thing is patience. Dont 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 dealnot to mention your walk-away powerif you get all worked up and married to something before you know what else is out there!


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?


Dear Tanner,

No. Your landlord probably isnt 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, youve still got time to fix the problem. Chances are your credit score wont be impacted by your rental payments unless youre late, and especially if you have several late payments. That could sure become a black mark against you later!

Im not a big fan of the FICO score, because it doesnt measure things like assets, income or net worth. Its really just an indicator of your interaction with debt. This is one of the reasons why its 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 theyre getting harder and harder to find!


Dear Dave,

Ive got my $1,000 emergency fund in place, and Im working toward paying off my debt. I was wondering what you think about credit card insurance offered through the card companies? It doesnt sound like a bad deal if theyll make the minimum payment for you if you become disabled or unemployed.


Dear Terri,

Credit card insurance is just another gimmick, so I think Id pass on that if I were you. I dont buy gimmicks.

Heres the deal. You should already have long-term disability insurance through your employer. If you dont, then you need to get it today. That way youre already covered and can make the payments if you happen to become disabled somewhere down the road.

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


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