Is A Bad Credit Rating A Good Thing?

Could a bad credit rating save you from bigger problems? It has done just that for many young people. How can this be? I'll start with a true story.

A Good Credit Rating Story

A friend, whose name I will withhold, started his adulthood with good credit. He soon was able to get credit cards at will, and finance cars, snowmobiles and more. He managed to make the payments on his debt, and went deeper and deeper into debt while he was at it. By the time he was 30 years old, he had over $20,000 in credit card debt, plus loans on cars and business tools.

It was too much to handle. He considered bankruptcy, but was convinced that the credit card companies would reduce his balance due if he just threatened to do so. First, though, he had to stop paying on the cards, or the credit card companies wouldn't believe he was in financial trouble. He did this, then drafted a nice letter to the companies, explaining his situation. Most of them cut at least 30% off what he owed, provided he paid the remaining balance immediately. This he did with a home equity loan.

In the end, his bad credit rating wasn't as bad as if he had actually declared bankruptcy, so he was able to rebuild his credit score. He has also begun to rebuild his credit balances. His good credit rating has enabled him to begin again the stressful process of overburdening himself with debt.

A Bad Credit Rating Story

Another friend of mine had her first credit rating based on the phone bill in her first apartment. She didn't ever pay the phone bill on time, and it was eventually disconnected. This, and a few other minor credit infractions when young destroyed her credit scores. What has this meant?

She can't borrow, so she hasn't had the pleasure of being at the edge of bankruptcy. She can buy things for cash when she has it, or wait until she does. Has this inability to have a bunch of things around that are worth a fraction of what she owes on them made her a less happy person? The opposite is true, in my opinion. She just doesn't have the debt-stress that is so typical today.

Is Bad Credit Good?

I am not recommending that you purposely try to get a bad credit rating, but if you already have one, it isn't all bad. The habits that got you there would probably get you into even more trouble if you could borrow more. Look at it as an opportunity to stop going further into debt, and a chance to learn better habits.

Start paying cash for everything. Pay down those credit card balances (the higher interest ones first). The moment you get those cards paid off, start setting aside money to buy a good used car for cash. When you've done that, start putting what would have been a car payment into a savings account, for a future down payment on house or a business (the only things you should borrow for). A bad credit rating can be good thing, if you take it as a lesson and an opportunity.

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How To Get Free Stuff

How To Get Free Stuff

Yes you can get free stuff, and yes, sometimes there are strings attached. For example, when we were at universal studios I got a free backpack. The catch? I spent six minutes filling out a credit card application. On the other hand, we ate pretty well for free on free sample days at local food stores when we lived in Tucson, and there really weren't any strings attached. Here are some other easy freebies

How to get Free hollydays

Somebody in Hawaii, Costa Rica or Colorado is just waiting for you to come and stay in their house while they are away. You may have to water the plants, and even get the mail for them, but you get to stay in a beautiful home in a sunny place. Sometimes you even get paid for these vacations. The only catch is that to find these opportunities, you may have to subscribe to one of the newsletters that list them.

We camped in our van for ten days at Williams Landing, east of Tallahassee, Florida, on Lake Talquin. It's a beautiful place, with hot showers. Our cost? Zero, and you can stay up to two weeks. There are free campgrounds scattered around the country. Ask an RVer about this, or buy a Woodall's directory from any large RV dealer. Camping can be an essentially free vacation if you do it right, because you may spend less than if you stayed home.
Free Entertainment

Some libraries now carry movies on DVD, and most at least have documentaries. We have even seen music videos on DVD in one library. The only cost is the time to get a library card.

Want to go to free concerts? Most festivals have some free musical entertainment. The National Cherry Festival in Traverse City, MI, for example, has free entertainment every night during the week-long festival, including many recognizable bands and (often) a Beatles tribute band. Go to any search engine and type in "festival" and the name of towns around you to find these freebies.
More Ways To Get Free Stuff

Most states give away free road maps. Some give away free legal forms too, like statutory wills. Check the state's online sites.

Free dental x-rays are available at some dental colleges. You have to be patient, as the students are just learning, but an experienced technician is always with them. You get the x-rays to take to your own dentist, which can save you $30 to $80. Some schools charge a small fee.

Some utility companies offer free energy audits. They come to your home and find the places where you are wasting energy. Some even give you a free kit for caulking windows and weather-stripping doors.


You can get free, confidential business advice from a business expert via email. Go to the website of "SCORE" (Service Corps of Retired Executives). These are successful business executives who volunteer their time to help others in business.
Some restaurants offer free dinners on your birthday. Others offer a free birthday cake. Many bars will buy your first drink for you if it's your birthday. How do you find the ones that do this? The same way you always discover how to get free stuff - as

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Debt Consolidation
Is It A Good Idea?

Why is debt consolidation necessary? Maybe it isn't. It seems like the easy way out of the problem of too many payments every month. When your credit card and loan payments add up to $900 every month, why not just get a loan that will pay all of these debts off and have a nice easy payment of say, $300? There are two reasons why this may be a bad idea.

Debt Consolidation Ignores The Cause

Too much debt? Why? Rarely is the cause due entirely unforeseeable circumstances. Most often, if you have debt problems, it is because you buy too many things on credit. In other words, it is due to bad financial habits.

Now what happens when you combine all that debt? Do you have less debt? Maybe you get a lower interest rate on average, but you still owe all the money, right? Your consolidated debt is just easier to pay, because it is in one lower payment stretched out over a longer period. What else becomes easier now? Adding more debt.

This is exactly what many people do. They get their $900 of various payments rolled into a loan with a $300 payment, and now they have all that excess income. Time to go buy some things on credit. Obviously, debt consolidation can be a way to postpone reckoning with the real problem - bad financial habits. Postponing dealing with debt makes it much worse, of course.

Debt Consolidation Costs More

It may seem like you are saving money on interest with some consolidation loans, but this isn't always true. The problem is that you are converting short-term debt into long term debt. The longer you take to pay off the money owed, the more you pay in interest.

Let's look at an example. If you owed $6,000 on a credit card, with 18% annual interest, it would take a payment of $176.26 per month to pay it off in four years. You would pay a total of $2460 in interest. Suppose, in order to get the best interest rate and easiest terms, you rolled the debt into your 30-year mortgage on your home (many people do this). If it was a 7% loan, it would add only $39.92 to the payment. That's easier than $176, and a much lower interest rate, but how much total interest will you pay over the years? $8371 - more than the original debt.

Of course there are debt consolidation loans that are not for 30 years, but you get the point. Even with a 15-year, 7% loan, which would costs $53.93 per month, you would pay at least 50% more in interest than with the 18% 4-year payoff. Converting short-term debt into long term debt can cost you a lot more in interest.

Try hard to make those payments and get rid of that debt sooner. You'll be glad you did. Of course, it may be impossible to make those payments. That happens, but for a reason. At least work as hard on changing your habits as you do on getting that consolidation loan.

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Living Cheap

Living cheap doesn't mean being miserable, or giving up what you want. In fact, in my own case, it meant getting to do the things I really wanted to do. The less you spend on each thing or activity, the more of them you can have, right? So the key is to spend less and still get what you need and want. Here is how I managed it.

Living Cheap In A Mobile Home

My first house was a mobile home on a small lot. I bought it for less than $20,000, and had payments of $257 per month. Even with taxes, insurance and repairs, it cost less than rent. It had three bedrooms, an expanded living room, and a nice fenced-in yard. I eventually sold it for $45,000.

What really made it cheap, though, was two things that I did. First, I paid as much as I could on it when I was working. I owned it free and clear within five years, and from that point on it cost an average of $300 per month to pay for the utilities, phone, garbage collection, taxes, insurance, and repairs. That's living cheap.

The next thing I did made it even cheaper. I found that I could easily rent the other two bedrooms, and get $65 per week for one, and $75 or more per week for the other. I included all utilities, and found decent young guys to rent to. The rents added up to $600 per month, making this more than cheap living, and even better than free housing. I made $300 per month AND lived for free.

Living Cheap By Planning

I found that I could work less, so I could get by without a car. That saved a lot of money. The occasional bus fare, and the used bicycle I bought didn't add up to a fourth of what it cost to have a car. I had to plan my trips around town a little better, but it was worth it.

During these years I never paid more than $40 for a piece of furniture. You have to know what is important to you. I paid $220 for a high-tech sleeping bag, because I liked ultralight backpacking. On the other hand, I couldn't tell the difference between a nice, clean used couch for $30 and one that cost $900.

One thing I found was that when I worked less, I had time to look around at my options. Time can save youa lot of money. I paid half of what others paid for groceries. When I did get a car, I found a repossessed one that was worth much more than I paid. I went to Ecuador for a month for $1,040 total, including all airfare, hotels, meals, a guided climb up a 21,000-foot mountain, and more. It was possible because I had the time to search for the deals.

I worked part-time jobs for years. I read books, played chess, wrote poetry. I traveled several times a year,

and met the love of my life in South America (happily married for over eight years now). All this was possible not because I made a lot of money, but because I spent less than I made, and used the difference for the things that mattered to me.

This isn't a how-to guide. I explain how I traveled and bought things so cheaply in other articles. This example is simply to get you thinking about the possibilities, and point out some principles. The principles? Don't buy things you don't need. Find ways to pay less without getting less. Spend a little less time working and a little more time thinking. Stay out of debt. Know what is truly important to you, because this is what you can have more of by living cheap.

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Excessive Credit Card Debt

There are many things you can do to resolve your excessive credit card debt. The first thing though, is to stop creating more. I have seen more than one person get out of debt briefly, only to fall back into it again. So start changing those habits. Of course, you have the debt, so what can you do to knock it down? here are some ideas.

Discount Your Excessive Credit Card Debt

Settle debts for a discount. When I collected debts for a living, we regularly took 50% as payment in full, if we thought it was the best we could do. If you really can't handle your payments, you may be better off to borrow the money from family to settle your debts for 20% to 60% of face value. Credit card companies regularly take 50% or less as payment in full if they are convinced you are headed towards bankruptcy.

Write a nice letter explaining your situation, and how you will get the money for the pay-off. Explain that you will most likely be filing for bankruptcy, but would like to settle up with any willing creditors before that happens. This let's them know they may be left with nothing if they say no, and you split your remaining assets between other creditors.

How To Pay Debt

If you are trying to dig out of your debt, always pay high-interest cards first. For example, if you have $200 budgeted to apply to your cards each month, pay the minimums only on all others, then put the rest of the money towards the card with the highest interest rate. Once that one is paid off, work on the next highest.

This is a powerful technique that saves a lot on interest charges. If you have three cards, for example, you would pay the minimum of (let's assume) $40 on two of them, and apply the other $120 to the highest interest card. Once that card is paid off, you continue to put $40 towards one card, and now apply $160 to whichever of the two remaining is the higher interest credit card. This is the fastest way to pay down credit card debt.

Excessive Credit Card Debt - Other Tricks

Don't buy the credit card insurance. This typically stops your payments when you are injured or unemployed. It is one of the most over-priced insurances out there, and doesn't eliminate the debt, but just delays it.

Avoid credit card security insurance. It pays for unauthorized charges when your card is stolen, but you are only liable for the first $50 if you report the theft in any case, and many cards already have 0 liability.

Avoid consolidation loans. Don't consolidate debt into a home refinance unless you have a definite plan for paying the loan off early. 6% isn't cheaper than 18% when it is for 30 years instead of 5.

If you have tried some of these techniques without success, contact a nonprofit credit-counseling service. They may be able to help you negotiate lower rates with your banks, and otherwise counsel you on how to reduce your excessive credit card debt.

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Bargain Finder Secrets

Would you like to be a bargain finder? Wouldn't it be fun to be one of those people that always finds a good deal? You can start by learning the secrets of opportunism.

For example, did you know that you can eat a wider variety of fruit than your neighbor, and spend only half as much to do so? How? By buying fruit in season, when it is at the lowest price. As a bonus, it is also of the highest quality at these times. This is opportunism.

You'll notice that this means not always getting exactly what you want when you want it, but you get more variety this way, and you spend much less. You go with the flow. If oranges are cheap, you'll be eating oranges. If apples are in season, you'll be eating apples. Whatever the case, you'll always be finding bargains.

You don't have to eat things you don't like or deny yourself pleasure. You just shop for those things that you like among those that are cheaper now. There will be other, different, great deals next week or next month. Unless you are extremely picky about what you eat, you'll almost always find delicious foods that you like on sale.

This is the premise of opportunism - that you get more by going with the flow. A true bargain finder gets more variety in the long run, and more for the money. This can be applied to many areas of life.

Some Bargain Finder Examples

Before I went to Ecuador a few years ago, there were many interesting places I wanted to go. I chose Ecuador because it was a thousand dollars less to go there than to any other country. I had a fantastic time for a month for $1040 (including airfare). I also met the most wonderful woman I know there, and eventually married her, so you never know what riches you'll find when you go with the flow.

My wife and I go to the movies here in Tucson on Tuesdays, when we can get in for $2.00 each. Others are paying $8.75 a couple miles away. What are they getting by paying four times as much? They get to see the movie six weeks earlier. The movies don't change in those six weeks, by the way, and enough friends have seen them by then to let us know if they're good or not.

Opportunism means not paying more unless you are getting more. It also means making honest choices. Will you actually enjoy that movie more by seeing it now? More than you'll enjoy the FOUR movies you can see in it's place? Do you have to take that fishing trip now? If you're planning to take both a fishing trip and a gambling trip, why not do each when it's cheapest?

When William Danko and Thomas Stanley wrote "The Millionaire Next Door," they found that MOST millionaires bought used cars. They bought BMWs and Mercedes, not old Ford Pintos, but the lesson was

clear: They understand opportunity. Cars often lose half of their value in the first three years, but they're not half used-up, are they? Is it worth an extra $6,000 to say you have a new car (And you will have to tell people, since it's hard to tell a three-year-old car from a new one)?

To be an opportunist doesn't mean just settling for whatever is easy and cheap to get in life. We all have our areas that are more important to us. If you really love those $15 cigars, why not buy them? On the other hand, if you really can't tell the difference between the $5 and 50 wine, why not buy the former? Opportunism is one of the keys to being a true bargain finder.

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Funny Ways To Save Money

I saw a list of funny ways to save money on a "frugal living" website. I'm not sure they were necessarily meant to be funny, but were gleaned from real suggestions sent in. Some cheapskates don't seem to notice that an extra hour at work might put them further ahead than many hours of penny-pinching.

The following are real suggestions, and then there are some funny ways to save money that you really shouldn't try.

Funny Ways To Save Money - The Real Suggestions

One person suggested ways to save money on weddings that included picking up the leftover flowers at a cemetery. I'm not sure how you can tell which are "leftovers."

Another creative penny pincher found a way to save money on a car wash. He washed his entire car using the squeegee at the gas station.

A woman confessed that she has the kids stuff their pockets with the free ketchup, salt and other condiment packets every time they were in a fast food restaurant. That's not all, though. She actually had the kids squeeze ketchup and mustard from the packets into regular jars of ketchup and mustard, and claims she hasn't bought these condiments in years.

To save money on an umbrella, one man suggests going to the lost and found department of any large public library. Tell them you lost a black umbrella. They will have several, from which you can pick the best one and claim it as your own.

Call people long-distance when you know they won't be home. Leave a message for them to call. That way, they pay for the long-distance call.

Funny Ways To Save Money - Don't Try This At Home

Don't pay baby sitters! Get young couples who are thinking about having kids to "rent" yours for the evening. They get to see what it will be like, and you can get paid instead of paying for sitters.

Turn off the TV and all the lights to save electricity. Tell the kids it's a game of hide-and-seek.

Train your dog to beg for food from strangers, so you won't have to buy dog food.

Rub pine needles under your arms instead of buying deodorant.

Take extra napkins from fast food restaurants to save on toilet paper.

Borrow your neighbors toothbrush instead of buying your own.

Visit friends around dinner time to get free meals.

If I write a book on ways to save money, funny or not, will I make much in sales, or will everyone take my suggestion and borrow it from the library instead of buying it?

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How To Be A Frugal Shopper

How To Be A Frugal Shopper

A frugal shopper has skills and ways of looking at things that help him or her take advantage of the money-saving opportunities in life. There are eleven of these techniques below. You can learn them in a matter of a day or two, practice them for a few weeks, and then save money for the rest of your life.

1. A frugal shopper studies other people. Do you know someone who always gets the best deal on cars, boats, or whatever? Ask him how he does it! Some people will tell you that the cheapest coffee in town is $3 per cup, while others will say 50 cents. There are probably people near you living a good life on half of what you make. Learn how others do things, so you'll know your options.

2. Frugal shoppers tell people what they need. Just mention it in conversation. Do you know how many people get free or cheap things, just because they talk? My neighbor wanted to upgrade her living room debt, and was thrilled that I would take her 3-month-old couch off her hands for $30. Glad I mentioned I was looking for one.

3. Frugal shoppers pay cash. Things are cheaper when paid for in cash instead of credit. Want that new patio set? The price divided by the number of weeks you can wait to get it equals how much you need to set aside each week. You'll not only save on interest when you pay cash, but you'll often get a better price.

4. A good shopper looks for alternatives. Maybe you'd have just as much fun taking that discounted trip to the Bahamas as you would going to Jamaica. If you happen to enjoy pizza just as much - or more, skip the expensive restaurant and call Dominoes.

5. Frugality requires knowledge of values. It's tough to get a great deal on a car if you don't know what a great deal is. Start educating yourself on prices, especially before you're ready to buy anything that costs a lot.

6. Use the internet. I bought a ring for my wife on a wholesale site for $47, including shipping. When I received it, I took it to a jewelry store and found the same ring for $150. The internet is also an easy way to learn prices before you go shopping anywhere.

7. Advertise. Many years ago I put an ad in the classifieds that read, "Looking for a mobile home on land - can put $3,000 down." An older couple that was thinking of selling called me, and that's how I bought my first home at a good price.

8. Visit rummage sales. Only you can say if it is worth your time, but you can save a lot of money on a wide variety of things. Late or early is best. Early gets you the super-cheap stuff before others get it. Late in the day you can negotiate almost anything, and even get things free.

9. Visit flea markets. Again, the time you'll spend may not be worth the savings if you make $50 an hour at your job, but these are great places to practice negotiating skills. Haggling over the price is expected. Bring a list of what you need, so you don't buy too much unnecessary junk.

10. Shop at thrift stores. Note which ones have better prices or more of what you need. Many have a color-tag system to keep the stuff moving. Each week all the items with tags of a certain color are half-price. Just watch for those green tags and ignore the rest - their week will come.

11. A frugal shopper does the math. You didn't really save $400 on that car if it costs you $500 more in gas each year. Also, be aware that some stores are cashing in on shoppers assumptions that larger is cheaper. Yes, the gallon of pickles might actually cost more than four quart jars. Be ready to do the math.

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1040 Tax Information

Note: This is not an IRS site, but a collection of ways to save money at tax time - ways that you may not have heard of.

IRA Tax Deduction Secret

Starting an IRA (Individual retirement account)? There is a way to get two tax deductions from your contribution. Instead of using cash, sell any stock you own which has decreased in value, and then put THAT cash in your IRA. Why? Because you can write off the capital loss for the sale of the stock, and thereby reduce your taxes even more than if you just put savings into the IRA.

What if you still like the stock? Buy it back using your IRA. There is a "wash rule" in the tax code that says you can't sell and repurchase a stock (within a certain amount of time) just to claim a loss. However, you and your IRA are separate entities as far as this rule is concerned, so you can immediately repurchase the stock in your IRA and still write off the loss.

The Telephone Excise Tax Refund (TETR)

This is a one-time payment available on your 2006 federal income tax return. It is designed to refund previously collected long distance telephone taxes. Individuals, businesses and tax-exempt organizations are eligible to request it.

Taxpayers have a choice: a standard refund amount between $30 and $60, based on the total number of exemptions claimed on their 2006 tax return, to eliminate the need to locate old phone bills; or they can locate those bills and use the actual amount. Ask your tax preparer about this one.

File Your Taxes Electronically For Free

Free File is a relatively new IRS program is a free service offered by companies for taxpayers with an Adjusted Gross Income (AGI) of $52,000 or less. You can find the links to these companies at the IRS web site.

Before selecting a company link, review the tax software company’s criteria to confirm that you meet their eligibility for preparing and e-filing your federal return for free.

Fees for state tax returns may apply. Some companies offer free state tax return preparation and e-filing.
Some companies offer free e-filing of the Form 1040EZ-T, Telephone Excise Tax Refund, for those who want to claim the refund credit and are not required to file a federal income tax return.

You are under no obligation to buy any of the company’s other products or services.

General Tax Savings Tips

1. Take every deduction you can. Audits are rare, and if you honestly think you are entitled to a deduction,

taking it is not a crime. If you are not entitled, at most you'll have to pay a penalty and interest - but only if you are audited.

2. Put off income or capital gains. We once delayed a closing on a property we sold by a week, in order to close after the new year. Our profit wasn't taxed for an extra year that way.

3. Accelerate your deductible expenses. If you pay the property taxes on that rental unit this year, you get to claim it as an expense this year, and so pay less tax.

4. Get good advice. If you have a high income, or a business, stock market or real estate investments, you need to talk to a good tax accountant (not just a tax preparer).

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Buy A Used Car For Less

Buy A Used Car For Less

Want to buy a used car for a lot less money? There are two good ways to do so, and one good reason to buy used - to save money. Okay, that seems obvious, but this isn't just about spending less initially. The research shows that a four-year-old car can cost 40% less over its lifetime versus a new car, when you include the costs of gas, oil, repairs, insurance, and everything else. In fact, almost half of the millionaires in the United States buy used cars, according to the book "The Millionaire Next Door," by Thomas Stanley and William Danko.
Buy A Used Car For Less

Want to buy a used car for a lot less money? There are two good ways to do so, and one good reason to buy used - to save money. Okay, that seems obvious, but this isn't just about spending less initially. The research shows that a four-year-old car can cost 40% less over its lifetime versus a new car, when you include the costs of gas, oil, repairs, insurance, and everything else. In fact, almost half of the millionaires in the United States buy used cars, according to the book "The Millionaire Next Door," by Thomas Stanley and William Danko.

First Way: Buy The Right Used Car

The idea here is to look for the cheapest "type" of car that will provide you with everything you need. The bottom line is that some cars just cost more than others. You pay more to buy and to operate them, so look for the lowest-cost one that will suit your needs. Whatever your negotiating skill, a four-year-old Jeep Wrangler is still going to cost more to buy and run than a four-year-old Dodge Caliber. So unless you need the four-wheel drive or space of the former, why not buy something smaller and cheaper.

Some of the factors to consider when looking at the overall cost of a used automobile:

- The initial price. The popular auto "blue-books" or price guides will give you an idea of what used cars are selling for in your area. Some of us think the accuracy of these may be suspect, but they are better than nothing for comparing the relative values of various models of car.

- Ongoing repair costs. Find a copy of the Consumer Reports auto edition at your local library. It has ratings for all major systems and parts of different models. Usually there is also an average annual repair cost for each car too.

- Gas mileage. Ask an owner about the mileage he or she gets - if you think he or she is honest. There are also websites like fueleconomy.gov where you can find fuel economy figures for used cars. With 15,000 miles per year, the difference between 20 miles-per-gallon versus 34 MPG is an extra 309 gallons per year, or $1,000 at $3.25 per gallon.

- Auto insurance. Different cars have different insurance rates. Ask an agent about the cars you're considering, and take notes.

- Future resale value. Plan to drive the car for just a few years? Then you have to consider what it will lose in value during that time. Different used cars may cost $8,000 each, but one may be worth $6,000 a couple years later while others are only worth $4,000 or even less. Research resale value online, or look over a used-car price guide to see which models tend to retain the most value.
Second Way : Negotiate The Right Price

The next step in buying a used car for less is to negotiate a lower price. There are a few tricks you should know, but start with a good idea of what the car is worth according to whatever guide you have available. Look for the wholesale cost, and make your first offer lower than that. Here are some other pointers:

- Invest time. When you think you want a car, spend some time with the owner or sales person, and looking at the vehicle. Expert negotiators call this "time investment," and use the technique often, because the more time the seller has invested with you, the more they want to sell to you. They don't want to "waste" that time. In other words, you can get a lower offer accepted if you first take more of the sellers time up front.

- Subtly point out any issues. Examine the engine and the underside of the car, even if you aren't sure what you are looking at. Hint at any problems you see politely, but never contradict or insult the seller. The idea is for the seller to like you but to also start to doubt the value of his vehicle.

- Be prepared to walk away. Always be ready to say, "I'll think about it," and leave (unless you really need a car today). It's one of the oldest and surest ways to get price concessions when negotiating. Car salesmen in particular know that when people "think about it" they rarely return, so this is a strong tactic on your part, and they'll usually make their best offer at this point.

- Get a mechanic look at it. Bring the car to your mechanic, or have a friend with some mechanical knowledge come with you to look at it. A car isn't necessarily cheap if it breaks down a week after you buy it, and in any case everything that your friend or mechanic finds wrong is a negotiating point that may result in a lower price.

To summarize: Use both ways to buy a used car for less.

1. Look at the right cars - the cheapest for your needs.

2. Negotiate the lowest price you can get.

Unusual Ways To Make Money | Buy A Used Car

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Learn To Budget Money - Four Steps

There are some people who don't need to learn to budget money, because they simply and naturally spend less than they make, and save the rest. Why bother to allocate "x" dollars each month for this or that category if your "outgo" is always less than your income, and you invest the rest for retirement. So if you don;t want to budget, you can try habitual frugality or an income that is constantly growing larger. But if you're not up to either of these challenges, you may need to learn basic budgeting.

Most people want to learn to budget money only once they're in financial trouble (hopefully that's not why you're reading this, but better late than never). Debts have piled up, and income doesn't quite cover the bills and habits. Stress is a common result, and learning the usual budgeting techniques is a good idea. Those are covered in four steps below. The second part of this article presents another way to approach this problem of managing your money.

How To Learn To Budget

Step One - Expenditure Tracking

Write down everything you spend for two months. Have categories that make sense (entertainment, utilities, etc), so you can see where the money is going. You'll be surprised at how much money is spent in some areas, and you might also find that as you watch the money going out on paper, you begin to change your habits. Looking at your convenience store purchases on paper motivates you to skip a soda or two, just so you don't have to write it down. This a good exercise to repeat every year or so, if only for the habit-changing effect it has.

Step Two - Reduce Expenditures

Do this before you start making the actual budget calculations. Get spending under control and then you will have a better idea of how much to allocate to each category. With a bit of thought you can cut the cost of most things and activities in your life. Turn down the hot water heater temperature, combine trips to save gas, bring a lunch to work instead of eating at a restaurant. Find the relatively painless ways first - like spending an hour to find a cheaper insurance policy for your car. If these are enough, you may not need more drastic measures.

Step Three - Make a Budget

Using your current income and your expenditure tracking notes, create a monthly budget, allocating money to each category expenses. You may need $250 per month for groceries, $300 per month for paying down credit cards, and $120 for the retirement account, for example. Be sure to include all regular expenses. The totals should add up to a bit less than your income. If not, lower those allocations and take more cost-cutting measures.

You need to account for large and unpredictable items as well. You don't know when a car repair will be necessary, for example, but you do know it is an eventuality. Try this: add up the amount you spent on your car over the last two years and divide by twenty-four to get a monthly figure for expenses.

Step Four - Set Up Systems

You'll need systems for following your budget and tracking money spent. For things that are hard to track, like convenience store purchases, you can put the allocated money in an envelope at the beginning of the month. When it is gone, you are done until the next month starts and the envelop is refilled. For large expenses, like car payments, repairs, insurance and registration, it may be best to set the money aside in a separate bank account, where it can accumulate until you need it. Medical expenses can be handled this way to, and you should have an account or envelope for the "completely unexpected."

Budgeting Based On Values

Certainly it can help to learn to budget money, but there is another approach that begins with asking why you are making money in the first place. You need it to survive of course, and the steps above will help with that, but you don't manage your money just to pay bills. After all, money is a powerful tool that can serve you in your pursuit of anything that is important and valuable to you.

A value-based approach starts with identifying what is of real importance to you, and setting reasonable goals based on that. If, for example, you value travel, you might make it a goal to take a major trip around the world every two years or so. If self-development and peace of mind is important you might plan to buy good books and courses that will help. If you truly value something, set a goal, put a price on it, and then determine how much you'll need to set aside each month to accomplish it.

Begin setting that money now - even before you do the two-month tracking exercise or make a budget. Then work the rest of the budget around these important goals. You see, if you start by figuring how much you need for the "necessities" of life, it's likely there will be no money left over for what you really value. Start with what's important.

Suppose the rest of the budget doesn't work after you set aside this "goal" money.What do you do then? Cut expenses or make more money. Consider for a moment how much less money some people live on than you do. Now, if these goals are truly important to you, live like they do. Just learn to budget money for what matters most, and if it truly is valuable, you can almost certainly find a way to make the rest of the budget work too.

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