Monthly Archives: June 2011

A Drop of Honey Makes You Money in Negotiations

Written by in Negotiating
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Hello again, I’m Kevin McKee from Thousandaire, ready to destroy Daniel in another one of our epic arguments.

Daniel is a great guy, but he and I don’t usually agree on much. Luckily I’m here to straighten him out. Okay, maybe he has won our last two arguments (according to public opinion), but I have a feeling this one is going to be different.

Daniel believes that if you want to negotiate well, you have to be a huge jerk. He claims that Hostility is the Best Negotiation Technique. Baloney! Everyone knows that people are much more willing to make you happy when they don’t hate you. It all goes back to an old saying from Abraham Lincoln:

A drop of honey catches more flies than a gallon of gal. So with men. If you would win a man to your cause, first convince him that you are his sincere friend.

In other words, a drop of money makes you money in negotiations. If you can make someone like you, they will be much more willing to help than if they despise you.

Being nice can get you free stuff when you don’t even deserve it. When I first moved to Dallas, I went to Potbelly’s for lunch. I had never been before, so I struck up a conversation with the cashier and playfully asked, “Is there a first-timer discount?” She said there was no official policy, but since I asked so nicely I could get a free dessert. Sweet! Imagine trying to get that free dessert by being a jerk. It would never happen.

A free cookie is nice, but what about when you are arguing with a company bad service or overcharging? The important thing to remember is that you can be nice and forceful at the same time. Being nice doesn’t mean letting people walk all over you. You do have to be persistent and escalate your problem to a manager if necessary, but at no point do you have to be rude, obnoxious, or hostile.

When I leased my last car, the dealership tried to get me to pay an extra $1,000 over what we originally agreed upon. They said I didn’t qualify for a $1k rebate that was included in my purchase, and I’d have to pay the difference. I could have gotten angry and upset, which would have made them try even harder to collect the money from me. Instead, I told them very calmly that if I couldn’t keep the car at the original price, they can refund my down payment and give me back the keys to my old car. I was pleasant but persistent, and in the end I didn’t give them an extra penny.

I will admit, I was 100% right in that situation. We had already signed the contract and they were trying to change the terms after it was signed. I could have gotten angry and still walked away without paying anything extra because there was a clear right and wrong in that situation, and I was right. It’s even more important to be nice when you are trying to get a customer service agent to fix a problem or credit your account when there isn’t an obvious breach of contract.

My high school girlfriend worked at the Sprint Store. They sold mobile phones and plans, and she absolutely hated the job. People would come to the store irate about overage charges or dropped calls or anything else they wanted to complain about. She was a salesperson by title, but she spent most of her days dealing with unhappy customers.

She was actually empowered to make significant changes to people’s accounts. She could waive fees, give account credits, get new phones for free, and lots of other stuff. But do you think she did any of those things for the people who came in and screamed at her? Of course not.

She would make sure the angry people left the store just as angry as they came in. She wasn’t going to reward someone for being a jerk. On the other hand, she would offer discounts and credits to people who were nice, even if they didn’t ask, just because she was happy to deal with someone pleasant.

Finally, Daniel can pretend that he believes being jerk is the best way to negotiate, but in reality he doesn’t even agree with it himself. Daniel prefers to ask nicely for a credit after a bad flight experience and his fiancée got free internet at a hotel by just asking nicely. Daniel pretends to be a big meanie-head, but in reality he’s just a teddy bear who understands that a combination of persistence and a smile on your face is the best way to get what you want.

So remember, Daniel and I will determine the winner of our debate via the number of comments, so post one here if you think pleasant persistence is best, or post one on Daniel’s article if you think being a jerk is best.

Also, feel free to check out some of our previous arguments below:

How to Use Personal Finance to Make Friends vs. Coupon Sharing is Stealing
Investments and Credit Cards Are Not an Emergency Fund vs. Don’t Waste Your Money on an Emergency Fund

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Tips to Start Saving for the Holidays

Written by in Budget
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The following is a post from staff writer Crystal at Budgeting in the Fun Stuff, where she writes about finding the balance between paying your bills, saving for your future, and budgeting in the fun stuff along the way.

I know Christmas is half a year away, but what better time to start saving a little money so you don’t have to sell an organ on the black market to afford your holiday splurges down the road? I’d highly suggest creating a rough holiday budget and saving enough each month from here on to hit your target. Here are a few other tips to save for the holidays.

Start a Holiday Account

If you want to make sure not to spend your holiday savings, you can open one up a special account at your local bank or credit union and sock away money every month. If you prefer online institutions, open a Smarty Pig goal for the holidays or start a separate ING account. This will make it easy for you to keep holiday money separate from your regular savings. I am a huge ING fan and lean towards them whenever I need another bucket account.

Eliminate a Monthly Bill

Most people have some monthly expense they may not need. Do you use your cable, home phone, or that gym membership you signed up for? If you get rid of just one of these bills, you can free up some monthly money for your holiday savings each month. If you decide you actually liked whatever service you cancelled, you can always restart it once you have saved the money that you need. If my husband and I wanted to free up $100 a month, we’d cancel his Massage Envy membership and our Netflix subscription.

Work a Couple of Extra Hours a Week

You can save $100 a month or more by working a few more hours each month. Just doing an hour or two of overtime a week could add up quickly. If you don’t get overtime at work, look into a part-time job that you may only need to work a day or evening a week. I’d highly suggest dog-sitting, babysitting, or even approaching a local store to get a few extra hours of work a week. I worked at our local bookstore for a few months in 2007 so I could save for our first Christmas in our new house.

Give Up a Habit

Do you eat out frequently like we do? Do you smoke? Drink? Need Starbucks to get through a day? No matter what your habit may be, if you can give it up, you’ll be freeing up money for the holidays or whatever other goal you’d like to achieve.  My husband and I start eating out less during months we want something else more. We both also gave up daily sodas to afford the monthly Weight Watchers Online membership fees of $18 each – it worked out for our wallets and our waist line!

Saving money for the holidays or any goal doesn’t have to be painful. I’d highly suggest looking into your options and setting up a little holiday budget today.

What other tips to save for the holidays can you think of? Have you tried any of the above?

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Revisiting the Personal Finance Blog Rankings

Written by in Money
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6 months ago, I ranked the different personal finance rankings. I reviewed WiseBread’s Top Personal Finance Blogs, Money Crashers Top Personal Finance Blogs, the Technorati Finance Rankings, and the Yakezie Personal Finance Blog Network.

We had several different takeaways:

  • Page Rank is not updated often enough, but that it’s an extremely useful tool for advertisers.
  • MozRank is updated more frequently than Page Rank and is gaining more trust by some advertisers.
  • Compete statistics don’t accurately portray traffic stats by itself, but it may be a decent comparison tool because it gets the relative amount of traffic right most of the time (when comparing two sites, for example, it typically knows which gets more traffic even if the prediction it makes is off).
  • Klout is an excellent metric that measures social influence.

We also got some great feedback from Gyutae from Money Crashers, Will from WiseBread, and Financial Samurai of the Yakezie, all of whom helped gain some valuable insight into their process!

So let’s revisit and see what changes have been made!

WiseBread came out with new rankings on June 1st that update weekly, and I think they do a great job of deciding which blogs are at the top of their list. There has been a lot of movement, but the biggest development is that they removed Page Rank! That’s a huge change because it has now become a list that appeals more to users instead of one that relies too heavily on a possibly outdated metric.

I understand that we shouldn’t be using a metric that doesn’t reflect reality, but advertisers often base their campaigns off of Page Rank exclusively, so doesn’t it have some place in there?

My solution to the Page Rank issue is to include it on the list but not have it factor into rankings. I think WiseBread put a real focus on users which is fantastic, but adding Page Rank back to the metrics while giving it no weight would be ideal so advertisers would still use it as their go-to tool.

The Money Crashers list is much more comprehensive in that it includes corporate blogs, which isn’t included on any of the other lists. We have to decide whether that makes the list more or less relevant, but my opinion is that the personal finance rankings should be non-corporate blogs. Another issue with the rankings is that they doesn’t include Klout in their rankings, which makes me sad.

One plus for the Money Crashers rankings (that WiseBread doesn’t have) is that they include an RSS link next to each blog so you can click over and sign up for updates quickly.

The Technorati rankings have not changed much. It’s still a nice list, but with few features. I have slipped in these rankings, which is a good thing, but looking at the ranking of some blogs makes me want to cry foul.

The Yakezie rankings, which update daily (some information updates weekly), also include a link to the RSS feed for easy access. It also shows a true level of involvement in the community using the Belts of Honor system, whereby half a user’s scored is determine based on the number of comments a user has since inception.

The drawback to the Yakezie is that it’s exclusive. The list only contains 76 names, which is low compared to the thousands of Technorati blogs, the nearly 800 blogs listed in the WiseBread rankings, and the approximately 450 in the Money Crashers list.

Now that you know the positives and negatives, the recent changes along with the recurring issues, which ranking system is your favorite? Which is the most useful for consumers and which is the best for advertisers?

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How Can You Increase Your Chances of Getting Accepted for Credit?

Written by in Credit
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With the difficulties of the current economic climate, customers are increasingly turning towards credit cards and loans as a way of borrowing to finance everyday life.

Rising inflation and cost of living, insufficient savings, salary freezes and unemployment have all combined to form a toxic mess for consumers, which has resulted in increased applications for credit and increased declines from the issuing lending institutions.

So how can you improve your chances of being accepted for credit? Basically, loans of any kind are granted, or not, following a credit check. There are several main agencies that exist to hold and gather consumer credit information and the main two are Experian and Equifax.

These agencies provide banks and financial institutions with insights into a consumer’s past credit, current lending status and information on key statistics such as county court judgements, bankruptcies, multiple changes of address and loan defaults or late payments, all of which increase the likelihood of being refused credit.

Certainly nowadays, following the infamous credit crunch and its long lasting ramifications, lenders have greatly tightened up their lending criteria and previous minor slips in an otherwise flawless credit history may still leave you declined for a current loan.

Happily however, all is not lost and there are ways to boost your credit rating. Firstly, get a copy of your credit report from Experian or Equifax. These can be ordered online and cost only a little for a full report and to see what information is held on you.

Review it very carefully for errors or discrepancies. If you think incorrect information has been added, you can request that a note be added to your file by the credit agency, which lenders can take into account when reviewing your file for a loan decision.

If you have a regular history of defaulting, now is the time to start building up a better credit record. Hold off borrowing for as long as possible and concentrate in the meantime on servicing current debts and contractual obligations fully and to time.

This includes a credit card, mobile phone contracts, landlines, catalogue accounts, existing personal loans and anything else where you are contractually obliged to pay a certain amount every month.

This will help slowly rebuild your credit. Also, sign up to the electoral register – this shows you have a permanent address and reduces risk of default from a lender’s perspective if they are happier that they can track you down. If you rent, try to stay in one place for at least 6 months.

If your credit history is very bad, or you have no credit history (which will also lead to a loan being declined, as there will be no evidence as to your ability to repay loans), then try to build up your rating using one of the pre-paid cards available.

You top these up and spend as usual and they demonstrate your ability to handle credit. The important thing is to stick to payments and the terms of your agreement. Show your ability to manage loans.

Avoid adverse credit products unless you desperately need to borrow and can’t find ‘regular’ loans. The interest rates for these will be very high and the terms and conditions punitive.

It’s also important to look at longer term strategies to avoid future borrowing. For example, you should not need to borrow to see your paycheque through for the month, or you will be trapped in an increasingly difficult cycle. Loans borrowing should ideally be reserved for ‘big ticket’ items such as cars or houses.

Go back to basics and create a workable budget. Get help if you can from a financial advisor, charity debt advisor, or an experienced friend or relative. Seek ways of saving money and cutting your costs.

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