This year for my birthday, I was given my brother’s AT&T upgrade to get an iPhone 4. That excited me for a lot of reasons. I got something new and shiny, the ability to video chat, and a far superior camera. It wasn’t something I would pay for myself, but with the upgrade, it was guilt-free.

Actually, it was also dollar free too.

Actually, I made money on the exchange.

What happened?

Well the iPhone itself was $200 with a $36 upgrade fee. I knew I could sell my current iPhone 3G S for around that much, and a quick search on craigslist showed that the lower limit I would get for it was around $250.

Already, it was a great deal and I was ready to pull the trigger.

I ordered my phone, picked it up, called AT&T to activate it…and the service was down. I spent an hour talking to a customer service representative trying to fix the issue, and when he couldn’t, I asked if he could compensate me for the time and stress, so he offered $25. (had I not asked, I wouldn’t have gotten a penny!) Good but not great. I asked for the $36 upgrade fee reversed and he agreed quickly. For an extra day of waiting, I was rewarded with the equivalent of a free month of service. I wonder what would have happened had I asked for $50..

The Lows

Great, so all I had to do was sell my phone on craiglist. People pay a premium for a jailbroken iPhone, and I agreed to sell it for $300, so I jailbroke it for someone who ended up not being interested (was a weirdo who said that since he already came to me, I should accept $20 less than we agreed on. That bothered me, so I said see you later and went back inside. It wasted 15 seconds of my time and he was left iPhone-less, so who had the bargaining power??). I called one of the other buyers. He came to pick it up, and when I asked if he wanted it jailbroken he said no, so I tried to reverse the change quickly and clear all data.

Unfortunately, it didn’t work the way I expected and instead of clearing the data, it did a hard reset on the phone, meaning I had to do a full install of the latest software, which can’t be jailbroken. Of course, he was no longer interested, and I was sorely disappointed.

I was devastated. I upgraded the phone to the newest version of the software, prayed a little, bargained with the G-man a little, and checked to see how much I could get on craigslist. In my mind, I would take anything over $200.

The Highs

It turns out that I got several offers when I set the price at $250, and in the end, someone came and bought it for $270.

All was better. I only lost $10 from what I wanted to sell it for originally (plus a $20 donation to charity that I promised in my bargaining phase).

My eagerness to get that last $20 cost me about 2 hours of time and a ton of stress. Of course, it all turned out well in the end, as it usually does.

My lesson? Stop trying to squeeze every last penny! Take what you can get, be happy with what you have, and don’t worry about getting the very best price. Just get a really good one.

Readers, have you ever made a stupid mistake you thought ruined everything because you wanted to do too much?

As you may have guessed, I am crazy about negotiation stories. I like hearing people who helped themselves, I like knowing that people can get a better price without sacrificing anything and in the end of the day, it comes down to one thing:

I like helping people save money.

So, today I have a perfect example of how to negotiate.

I’m a regular person. I don’t have any secrets, I don’t think I’m naturally charming, and I’m not the kind of person who just runs into luck at every corner. I’m normal, just like you.

On Thursday, I went to sign a lease on a new apartment. Everything was pretty straightforward: $1,500 monthly rent (combined with my roommate), with all utilities included. I would move in August 1st, and I expected it to be a quick process of signing some papers.

We checked out the apartment to make sure there weren’t any surprises. Everything looked the way I wanted. THere were a few minor issues that needed to be taken care of, but there was a week left before the move in date, so I wasn’t worried.

The leasing agent wanted to go through the paperwork with me, which I thought was a waste of time, and for the most part, I just listened as he told me that we shouldn’t break down any walls, leave the place trashed, or start a retail business out of our apartment. Pretty basic.

Then he got to the utilities portion, which showed that all utilities were included – except for electricity. I told him that when I spoke to Stephanie, who showed us the apartment, she said that all utilities were included. Marc, the leasing agent, said that they don’t do that for any of their properties.

Then we had an awkward silence. I sat there, contemplating my next move. I was stuck in a corner. Paying for electricity wouldn’t be the best thing because I thought I knew what I was getting myself into, but I didn’t really have many options.

I stared at the piece of paper a bit longer. It had maybe been 15-20 seconds since either of us had said anything. And apparently that was enough for Marc to break the silence.

“I can’t pay that for you because the bill goes straight to you, but I can give you half off the 2nd month’s rent.”

Um, hell yah! Are you kidding me? $750 back? We know some other people who live in that building and their electricity bills average around $30 per month.

So $750 comes out to $62.50 a month, meaning we’ll actually be saving money on this miscommunication.

I didn’t even ask. I just sat there. And I saved nearly $400. That is pretty damn awesome.

So the next time you’re in a tight spot and aren’t sure where to take the negotiations, try waiting for the other person to make the first move. Just because I was in a tight spot doesn’t mean the other party wanted to sit in awkward silence any more.

Happy bargaining!

In an earlier post, I talked about always bargaining and that you can always haggle with people who are taking your money. This happens most often for my phone bill, but also happened before renting our apartment as we were able to convince the landlord to reduce the rent. When we moved in, we were able to get very cheap Internet and cable, loaded with extra features that they agreed to add on after we had them drop the price significantly.

Now, I’m starting to put that into practice, and I built up the courage to negotiate with my barber. I just moved into the area and had no loyalty to any barber, but the first one I went to did a great job. Corfu Barber Shop is a tiny little place hidden underground. It’s a real experience: there are sports magazines and some other dirty magazines sitting on the shelf, but it seems like nobody reads them because there’s never a line. John doesn’t speak much English but is a real perfectionist. He does a great job on my neck and I got one of my best haircuts there, so of course, I was going to go back.

Like many barbers in the area, he charges $18, and with tip, it comes out to $20. Usually, I get my hair cut shorter than necessary, and it takes a week to look good. Then 4 weeks later, it’s time to get it cut again.

I’ve been considering negotiating with my barber for a few weeks now, and when it was time to go in, I had a plan. I did some calculations and decided on a course of action. For awhile, I’ve wanted to get my hair cut every month so that it never gets too long and I can avoid that awkward week when people can see my scalp because my hair is too short.

I proposed paying $15, including tip, for each haircut, and in return, offering him two things: First, I agreed to come only to him, which guarantees him my business, something I assumed was very valuable to him, and second, to come in every four weeks instead of every six weeks, giving him consistent business.

Here is the difference in cost:

As you can see, the cost difference comes out to about $13, which over the course of the year is nothing to brag about. However, the real value comes from the fact that I can always look sharp and have a shaved neck. I no longer have to worry about being made fun of when I get a haircut and I also don’t have to put up with long hair and the hassle of “doing” it every morning. Plus, I probably save a few pennies by using less shampoo.

Most importantly, this experience gave me the confidence to haggle the next time, too.

That’s right, nobody has ever been hurt asking. It never hurts to ask. Plain and simple. It’s been proven time and again.

How do I know? Because I’ve tried over and over and over again and not once have I gotten a scraped knee, bruised a rib, or needed a trip to the ER.

In fact, when asking pays off, it can make a huge difference and in many cases, you’ll be pleasantly surprised by the results.

As you know, I got an iPhone awhile back and I think that it’s great to spend money on the things you care about, and that it’s the things you don’t care about that you should cut back spending on.

When I bought my iphone, I bought one app: The MLB At Bat app so that I could watch my Yankees no matter where I was. Best purchase ever.

But other than that, I haven’t spent money on any apps. $0. For anyone with an iPhone, you know that’s impressive. I could easily spend $30 a month just trying out apps and wasting my time away. But I told myself that my iPhone would cost $30/month and I’m going over that would be cheating myself.

So what do I do when I find an app I think would be super cool but don’t think it’s worth the money?

I do one of two things: I search for promocodes, which developers give out to encourage people to use and rate their app, or I go directly to the developer and just ask for a free copy!

Pretty simple, right? And guess what: most of the time it works! I’ve been denied a few times, and I’ve had to pass on apps that I think would be the coolest way to spend mindless hours, but I’ve also been treated to a few damn cools apps.

What’s the harm in asking? If they say no, you’re right back where you started! It might be a little embarrassing, but over email, they don’t know who you are, they’ll never meet you, and if they do, THEY’LL be the one’s embarrassed because they were the ones who didn’t want to help someone out.

Readers, what is the coolest thing you’ve ever received just by asking? Has anyone been injured by asking?

I use Google Analytics and Sitemeter to track my website statistics. One of the advantages of using these tools is that I get to see what people type into Google to reach Sweating The Big Stuff. Once in a while, I’ll get a real gem, and last week, I was surprised that someone searched for:

is 30 cents a month bad for paying rent to your little brother thats 9

Obviously these two brothers are having some issues sharing their room, and what I find fascinating is that the younger brother is the one doing the bullying!

Also, I suspect that this kid didn’t stay on the site too long because Google brought him to a post about avoiding a high cell phone bill.

So today, let’s help him out and see if it’s a good deal. At 30 cents a month, it comes out to $3.60 a year. That’s compared to the average $651 per month, or $7,812 for renters* (let’s just assume he’s not ready to buy a house yet, although with these savings, he will be able to in a few short years). That’s a savings of $7,808.40. So, in short, yes, 30 cents a month isn’t bad.

However, since his little brother is 9, the humiliation of having to hand over 30 cents every single month must count for something. It’s hard to quantify it, but I suggest setting up automatic payments so that you don’t feel it so hard each month.

I grew up sharing a room with my older brother for the first 10 years of my life, followed by sharing a room with my younger brother for the next 4 years.

I never had to pay rent (and never demanded rent, either), but there are plenty of funny stories I have. One time, we split the room down the middle. After about ten minutes, I realized that having the closet but not having access to the door was going to be a real problem, and our agreement promptly ended in a fight.

So to answer your question, anonymous boy from Google, no I don’t think 30 cents is too much to pay for rent. If you can, I suggest locking in that rate for I don’t know, the next 35 years of your life. At that rate (with 7% interest), you’d have over a million dollars saved up, and that’s if you saved no other money! Imagine the possibilities!

*http://www.census.gov/prod/2004pubs/H150-03.pdf