Your Take 
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Your Take: Do You Negotiate or Haggle Often?

Reading this article by Jane Boon on negotiating down the price for luxury watches reminded me of my trips to China as a kid. When I was younger, we’d visit my relatives in Taiwan once every two or three years. On those trips, we’d often go to various open air markets and street vendors where negotiation was not only expected, it was crucial to the buying process. While I’m not always 100% comfortable with doing it now, I think I really enjoy the dance once I get moving.

My most recent memory was of going to Bermuda and buying a conch from a vendor off the street. The quoted price was $10 a piece for something I knew couldn’t be worth more than a dollar, factoring in labor to find, clean, and polish the conch. Time after time I saw tourist walk up, hear $10, and pull out a ten dollar bill (the kid was selling them beside an open air market, where our friends were wandering). Eventually, I walked up and asked him how much, he said $10, I cringed and said that was too much. Over the next half hour, as I was happily drinking my adult beverage and watching his kid reposition his huge duffel bag of conch shells, the number of tourists passing by had slowed down so I asked the kid if he’d sell me one of the conches for $6. He shook his head. I said $7. He kind paused, then I said I’d buy two for ten (we were with friends) and immediately pulled out the ten dollar bill – he agreed. He went from not being sure whether he wanted to sell it for $7 to selling two for $5 a piece. It was probably one of the highlights of our Bermuda trip (that and wandering into a $500 per person slots “tournament” at Atlantis). :)

I usually don’t haggle much while in the U.S., unless it’s at a market or for a big ticket item, but it seems like I should. How about you?


 Shopping 
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Four Expenses You Must Negotiate

When it comes to saving money, one of the most important things you can do is ask for a discount. Many of us have been conditioned to just accept costs as they are. Haggling is not really part of the American psyche right now. (Although some point out that bargaining has been on the rise since the recession.)

There is no reason to just accept the first number offered. There are a number of things open to negotiation, from the price of your car — one the few things we do haggle for — to the interest rates on your loans. Before you shell out, make sure you really are getting a good deal. Here are 4 expenses you should be negotiating:

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 Your Take 
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Your Take: OK to Lie About Previous Salary in Interviews?

This post about “a little white lie in salary negotiation” sparked a bit of a heated debate in the Daily Worth community (I discovered it through a post on the New York Times Bucks blog). The original post said:

I’d found a position I liked and applied for it. The recruiter asked for my current salary. Let’s just say I inflated the figure—and told her I was earning $5,000 more than I was. (“Everyone does that,” a successful colleague had told me. “Just don’t puff it up too much, so that figure seems realistic.”)

Some people didn’t take kindly to her advice about inflating your previous salary.

I don’t think it’s lying. I think it’s acceptable to lie about your previous salary if you are pushed to give a hard number. I also don’t think it’s appropriate for a recruiter or a prospective employer to ask what you earned at your last job. They have assigned a dollar value to you and they should base their compensation on that value, not on what your previous employer paid you. When you reveal what you earned at your last job, they make take that into consideration when they shouldn’t.
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 Personal Finance 
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Your Take: Mother’s Day Lessons

With Mother’s Day around the corner, some blogs will point out that Mother’s Day is a Hallmark Holiday. It’s a day made so commercial that sometimes it seems like it was created just to sell Mother’s Day cards! Regardless of where you stand on this issue, the sentiment of Mother’s Day is on point and we should celebrate out mothers.

On this, the Friday before Mother’s day, I am curious to know what important money lessons has your mother taught you?

Mine was that everything is negotiable and it’s a core part of the purchasing process. If you aren’t negotiating, then you’ve failed to realize that a negotiation has taken place (they’ve thrown out a price, you’ve implicitly accepted it), but it still took place.

It would take many years for me to recognize that negotiation always takes place. In some places, negotiation happens out in the open. When we went to the Bahamas and wandered about the open markets, you would negotiate any purchase. You asked how much, they said $20, you countered with $5, they said $15, … and you arrived at $12. Kids sell conchs on the side of the road for $10 each, you can get two for $5… if you negotiated.

I feel like we, as Americans, are losing this gift because we aren’t exposed to it from an early age. It’s one of the greatest tools in capitalism and it makes markets more efficient. When you go into a retail store, there is zero negotiation. The item has to be priced just right in order to sell. High enough to make a profit, low enough to sell to a customer.

I’m not always comfortable negotiating, I blame that on malls, but when it’s socially acceptable, it’s a fantastic time.

Thanks Mom!

(Photo: mikelehen)


 Frugal Living 
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There Is Always A Deal

Barcelona Produce MarketI bet you work hard for the dollars in your wallet, I know I do. You don’t spend hours away from your family or your favorite pursuits because you like work more than them, you do it because works pays you money so that you can support yourself and yours and do the things you want to do with your free time. I’m the same way. That’s why whenever I do the paying, I make sure I get the most out of the purchase. I believe there is always a deal to be made and those deals have saved me many hours of work in the process.

I believe that whenever you make a purchase of any kind, there is always a deal to be made or found.

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 Shopping 
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Understanding BATNA

BATNA is a well known negotiation acronym that stands for “best alternative to the negotiated agreement.”

If you’re familiar with the concept of opportunity cost, then BATNA will sound very familiar. The idea behind opportunity cost is that the price of something isn’t just the number listed on the tag. There’s an opportunity cost involved and that cost is the price of the next best alternative. Let’s say you have two potential events you can attend this weekend. You can either go to a movie or go to a concert. The opportunity cost of going to the movie is the enjoyment you would’ve experienced if you went to the concert instead. The opportunity cost of going to the concert is the enjoyment you would’ve experienced if you went to the movie instead. So the cost of the movie is not only the ticket but concert enjoyment. Got it?

BATNA is a similar idea. When you’re negotiating anything, it’s important to know the other side’s BATNA. You’re trying to create a win win situation, so you have to create wins for the other side. If you know their next best offer is worth $10, you can offer a $9 solution. They would simply say no and go to their BATNA. You want to know how much their next offer is worth and offer something better.

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 Frugal Living 
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Forget Cashback Rewards, Go Cash

I was in New York a few weekends ago and saw that gas stations listed two prices for fuel, one if you paid in cash and the other if you paid in credit. The credit price was a little over 2% higher than the cash price ($2.49 vs. $2.44) and it was clear that you paid the lower price for paying cash. None of this “wink wink nudge nudge” stuff, they full out stated the price for gas with cash was lower.

Against the credit card merchant policy? Maybe.

Did we really care? No.

We paid cash… and saved 2% on the price, rather than getting 1% cashback on the backend.

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 Health Care 
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Negotiating Your Medical Bills

Hospital Vitals MonitorIf you have medical insurance, you should receive an Explanation of Benefits from your insurance company every time you visit a doctor. Have you ever looked at one? It’s amazing. You’ll see the how much the doctor billed you, how much the insurance company negotiated as an allowable rate, and the difference can be staggering. The catch-22 in all this is that if you don’t have insurance, you’d have to pay the standard rate unless you negotiated with the doctor… and negotiating with the white coat can be hard. Fortunately, it’s not as uncommon as you think, according to a New York Times article, and here are a few tips I’ve researched from the interwebs.

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