Mastering Negotiation to Save Money

The art of negotiation is an important one, especially when it comes to your finances. Anyone who has ever had to work out a debt repayment plan or get their credit card interest rate lowered knows that negotiation plays a big role in how things turn out.


Even if your financial situation is in perfect order and you don’t foresee any future battles with banks or creditors on the horizon, learning how to negotiate can result in significant savings in many areas of your life.

When Negotiation Skills Save You Money

Bargaining isn’t just for credit card defaulters. There are many less-obvious situations when negotiation can save you money and improve your finances:

Overdraft Fees

Everyone has overdrawn their checking account (some more than others) and taken the hit of an overdraft fee. Overdraft fees are expensive, too, and should always be avoided. Unfortunately, even the most responsible account holders mess up every now and then.

When that eventual transaction occurs that pushes your account balance into the red, know that you don’t have to pay for it. It’s just a matter of calling your bank and asking them to reverse the fee. Whether or not they honor your request, however, depends on how you ask. Admit your fault, state you’d like the fee to be removed and promise not to do it again. Then, don’t do it again.

Student Loans

You thought financial aid was non-negotiable, didn’t you? That’s what colleges like to tell students. The truth is they will usually enter into limited negotiations over financial aid awards under certain conditions. These include:

  1. A Major change in family finances, like job loss, occurred
  2. You received a better offer from a different school
  3. A student with a similar situation and background got more (not fair!)

If you (or a parent if you’re fresh out of high school) can prove you’re experiencing one of these circumstances and it warrants a change to your current financial aid terms, contact someone from your school and let them know. You might make your education much more affordable.


In tough economic times, every expense can be a struggle to pay off. So when tax season rolls around and the IRS expects a check from you, don’t panic. While you can’t get out of your duty as an American citizen of paying taxes every year, you can negotiate the amount you owe if you’re experiencing financial hardship.

You can file an Offer in Compromise, in which you explain why you’re unable to pay what you currently owe in full. Of course, it’s the government, so getting a break won’t be easy. That’s why you’d better present your case skillfully.

Even if you don’t get your bill lowered, at the very least the IRS can’t place a levy on your property until 30 days after the offer is rejected if you’re in a real tight spot.

Negotiation Tips

Negotiation may be a skill, but it’s a skill that can be learned. Follow these tips to improve your negotiating abilities:

  • Don’t be afraid to ask: Many people don’t get what they want because they’re afraid to ask for it. Get over your fear of confrontation and make your wishes known.
  • Be optimistic: Enter a negotiation asking for above and beyond what you expect to receive. People who aim high achieve more.
  • See the other perspective: If you can understand the situation from the opposite point of view, you will be more easily able to satisfy the needs of the other party in addition to your own.
  • Be assertive: Avoid wishy-washy language like “maybe” and “possibly,” but don’t become aggressive. Also, remember to take breaks from talking so you can listen as well.
  • Leave emotions out of it: It’s easy to become emotional when you’re not getting what you want, but understand that negotiation is meant to be a calm discussion and you shouldn’t take anything personally.

Negotiation can be a powerful tool that gives you much more control over your financial life. Learning and improving upon your verbal debate skills can make a big impact on your overall spending, so get started and begin making some positive changes.

This guest post was written by Go Banking Rates, bringing you informative personal finance content and helpful tools, as well as the best interest rates on financial services nationwide.

Photo credit: frankieleon

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One Response to “Mastering Negotiation to Save Money”

  1. Credit Cards |  Oct 11, 2010 at 2:10 pm

    You need to stay alert and ask for negotiations as and where possible.