Ted’s Blog

Timely updates and reminders on personal money management. Seeing to it that you always have the up-to-the-minute information you need to win the game.
January 6, 2011

If I told you a way to save money that was quick, simple and almost always works, would you do it? What if I told you it was negotiating a better price? Is your answer still the same?

Amazingly, most people don’t negotiate. One of the reasons I wrote Money Smart was to give everyone the skills to effectively manage their money. Make it a habit to always ask for a better price. Knowing just the basics about how to negotiate can result in saving money. According to a 2007 Consumer Reports National Research Center study, when people asked for a better price, they received it more than two-thirds of the time. The study also showed that over 70 percent of the time, consumers simply don’t ask.

Everyone can negotiate a better price for cell phone plans, bank account fees, credit card interest rates, furniture, appliances, costs for hotels and airfare, and even doctor bills. All you need are three simple key steps: Asking, Turns (as in taking turns) and Silence.

Ask. Asking is the most powerful tool of all. Always be friendly, but ask for a better price. Take the scenario of calling a credit card company to negotiate a reduced interest rate: Be courteous and simply ask for a better rate. If appropriate, tell the representative that the current rate is more than can be found elsewhere and make receiving a better rate a condition for maintaining your account with their company.

For purchases of items like furniture, ask the sales person for their best price and then tell them you will think about it, and act like you are going to leave. To most salespeople “think about it” is a kiss of death and there’s a good chance they’ll sweeten the deal. If you do actually end the call or leave, you can always come back. Remember, the pressure is usually greater on the sales person than it is on you. You can almost always buy elsewhere, but for them it’s a sale and a commission that will be lost for good.

The next key tool is taking turns. Most negotiation involves taking turns. It is really rather simple, you go, and then I go. This frequently results in the two parties ending up in the middle between their respective starting positions. The trick is to try to get the sales person to go twice. This can often be accomplished by responding to their offer by saying that it’s more than you had hoped to pay and then waiting for them to speak again.

This leads to the third tool – silence. Silence is very powerful. In most negotiations there will be a critical make-or-break moment. Be on the lookout for it and remember that he who speaks first usually loses. In the above example where the sales person and the customer are taking turns, by keeping quiet the customer creates pressure on the sales person to bring the price down, or risk losing the sale.

Negotiating is a must-have financial tool. Making it a habit to always ask for a better price and knowing at least a little bit about basic negotiating can save you a lot of money. Use these 3 simple tools and you will end up saving a lot of money quickly. Negotiate and start saving money today.


December 27, 2010

Do you spend every raise you get? Do you spend a little bit more than you make on a monthly basis? About half of all families live at or above their means. The secret that every financially successful person knows is this: the key to turning family finances around is living below your means. Making this simple lifestyle choice is an essential step to controlling personal finances.

What exactly does that mean? Living below your means simply means living on less money than comes in each month and saving any extra money instead of spending it on an increased standard of living. The difference can be dramatic, especially if you are currently in debt. You don’t have to make a lot of money to do this, you just have to spend a little less than you make. Once you begin chipping away at your debt, you can begin to increase your ability to save money. You start to control your money instead of it controlling you.

It doesn’t have to be a well-kept secret. Live below your means, almost every financially successful person does.


December 13, 2010

Times are tough and the holidays are hectic. But I would like you to take the time this busy holiday season to consider something that I think is essential to your well-being, financial and otherwise. Giving.

Giving doesn’t have to be limited to money. A wonderful gift can be just to give a little of your time and attention. Maybe it’s just driving an old neighbor to the store to go shopping, or helping a kid with a school project.

When you do, you’ll find an amazing thing happens. When you give, you get back all that you gave and more. Try it, and see for yourself. Many very wise people have learned this truth down through the ages and written about it. There are many popular books on this subject that you can read, or you can just try it for yourself and see the result.

Do, however, be cautious when donating to insure you really are making a difference. Don’t give money in response to a telephone solicitation. You are probably talking to a solicitation company employee and not someone who works for the charity. It is quite common for over 50% of your donation to go to the solicitation company as their fee.

Most importantly, don’t limit yourself to third parties. Help someone you know directly. Start with a couple of hours of your time or maybe just twenty bucks. See for yourself how great that feels and how you are rewarded many times over. Make it a regular occurrence and watch how the world gives back to you.

Whatever the option, put giving high on the holiday must-do list. Giving is better than receiving. Find out that wonderful truth this holiday season. You won’t regret it.


December 9, 2010

These have been hard economic times and people are asking, “How did this happen and why weren’t we warned?”

We are all looking at our money differently and, perhaps, more carefully. But the myth that “I need an expert to help me understand and manage my money” still exists.

I wrote Money Smart to dispel that myth and show you how to manage your money yourself, because you can do it better than the experts.

For the most part, financial services experts are trained in and excel at sales, asset gathering, and commission generation—but not a lot else. From the mid-’80s to the end of the ’90s, they tended to attribute the success of their investment decisions to their own good judgment, not recognizing the larger forces at play on the market. Over the last forty years, as the new financial services industry expanded its superficial analysis of the stock market, its advice became accepted as genuine investment expertise when, in truth, it was anything but.

The vast majority of these experts truly believed that market growth just goes on forever. It doesn’t. But to keep you believing that it will, the experts in the financial services industry and the financial media have built a system founded on the following three myths:

  • Myth #1: “Money Management Is Very Complicated”
  • Myth #2: “Let Financial Experts Handle Your Finances Because They Do It Better Than You Can”
  • Myth #3: “Always Invest for the Long Term”

In my book, Money Smart: How to Spend, Save, Eliminate Debt, and Achieve Financial Freedom, I show you the truth behind these myths and offer ways you can avoid getting trapped by following the advice from the so-called financial experts.

The answer to the question, who should manage my money? You.


December 2, 2010

With the holidays upon us, it can sometimes be tough to remember that this is supposed to be a joyful season. Celebrations can quickly dissolve into chaos, stress, and opportunities to overspend. Here are some tips to help remember the joy of the holidays and avoid overspending.

Money Smart Holiday Tips:

Avoid impulse buying. Start with a list and use the internet for comparison shopping and buying. This will help with making smarter purchases and will lead to fewer trips to the malls and stores where impulse shopping is hardest to avoid. So make a list, stick to it, and minimize those shopping trips.

Buy less and do more. Items we buy quickly lose their appeal and the pleasure we get from them is fleeting. The pleasures of the things we do, however, go on warming our hearts long after the occasion has past. So buy fewer things this holiday season. Instead, invite people over for supper, go ice skating with your kids, or go to a special event with your friends. You’re not only likely to save some money; you’ll probably have a much merrier and more memorable holiday season as well.

Presents are for children. Consider not buying holiday presents for most adults. Talk to the people you’re exchanging gifts with and see if they might prefer to stop as well. Most adults will be happy to end the obligation or agree to a gift limit of $10 or so. After all, what percent of the gifts you’ve ever gotten have you actually wanted and used?

Think before sending Christmas cards. Only send cards with a personal message to each person. While most people just fire them out, it’s not very personal, is it? Simplify life and save money by sending an e-card for free instead (do it for birthdays, too).

Start your own holiday fund. Save ahead of time. It’s important to save for gifts, and especially the holidays, so there is money to cover the expenses when the time comes. Consider the gifts and expenses for each present-giving event in a year, add them up, and divide by twelve to know the monthly cost. This is the amount to put aside each month to be prepared and avoid stress.

The holidays are a supposed to be a celebration with family and friends; going into debt doesn’t have to be a foregone conclusion. Be Money Smart and don’t stress, enjoy the season without regret.


November 10, 2010

What are your hopes and dreams, your goals and desires? A strange question to ask when my focus is helping people achieve financial freedom? It’s not, and in fact, it is probably the most important question you need to answer if you truly want to reach your money goals. What matters most? Is it spending time with family and friends? Traveling the world? Owning a great home? Don’t make the mistake of spending money on low priority whims, trading away the things that matter most–it’s just not a trade worth making.

Take your time answering and really consider your answers. Identifying hopes and dreams can be difficult, but you are very unlikely to get the things you wish for unless you first identify what they are. Think of it this way, every expenditure you make is a trade that requires you to give up something else and it’s critical to become consciously aware of the trades you are making. Only after you have clearly identified what it is you want from your life can you make good decisions regarding money and the role you want it to play in your life. When you know what you truly want, you can avoid trading it away.