In the meantime, here are some great personal finance articles from around the web. This is a LONG list, but I think they are all really great articles. Please check them out!

I’ll be back Monday with discussions of the home buyer credit extension and shopping for Black Friday and Christmas. Have a great weekend!

• The Carnival of Personal Finance at The Centsible Life.

• Bargaineering wants to know if your recession changes will stick (in other words the things that you have done differently in the recession, will you keep doing them? Unfortunately I think for most people they will not. Things will eventually get back to normal and we will move on. This still hasn’t been like the life altering and life scarring Great Depression.)

• Moolanomy thinks the home buyer credit is bad for the economy. I agree. We’re trying to have a correction-less correction in the housing market. Don’t think that will work out too well…

• Cash Money Life gives us 2009 year end tax moves. You better hurry… the next thing you know we’ll be popping that champagne for new years!

• Being Frugal shares a Tightwad Tuesday tip: Photo Christmas cards. You must read this post if only to see the photo of all the members of her family wearing matching pajamas. Awesome.

• Good Financial Cents thinks you should buy term life insurance at a young age. I completely agree and we did the same thing.

• Studenomics shares some tips on why college is the best time to start a business. Yours truly was quoted in the article so should definitely check it out.

• Speaking of the home buyer credit… it has expanded. The Wisdom Journal gives you the details of the new plan.

• Fiscal Geek writes about personal and financial responsibility. This is a GREAT post!

• Bible Money Matters overwhelms us with 75 different tools and apps for budgeting and money management.

• PT Money and his wife went a week without spending any money, and shares the results.

• Amateur Asset Allocator bashed (appropriately) Forex Future trading.

• Man vs. Debt shares his tips on travel hacking — how he makes money and gets deals while traveling overseas.

• Free From Broke ran the NYC Marathon and compares the task to managing your finances.

• Four Pillars answers a reader question about buying stock on margin. (Hint: don’t do it.)

• Frugal Dad is cresting the hill on his debt… it’s all down here from here man! Keep it up!

• Money Ning shares three easy steps to help determine your financial priorities.

• The Financial Blogger talks about his wife’s look at his blogging efforts, and how it is finally starting to pay off.

• Debt Free Adventure is reengaging his inner gazelle. It’s back to gazelle intensity in his efforts to pay off debt. Keep it up!

Using this lamp I am going to explain two things:

• why having a home maintenance category in your budget is a key to your financial success
• how paying retail on small items makes sense

This is a photo of my former night stand lamp.

It is really an office lamp. I mean, look at the shade. That is a hand-me-down from my Dad’s office ages ago. I took it to college and it has somehow survived to this point.

But it worked, and we only really needed one lamp in the bedroom anyways. So we kept it and used it.

That is until this past weekend. Over the past several weeks the lamp had started to give us problems. The knob used to turn it on started to come loose and you had to maneuver it while clicking the lamp on to keep the electricity flowing to it. Eventually I could find the right spot and we had light, but there were times when it took a good 10-15 seconds to get the lamp to work. Very frustrating.

It was time to fork over some money for a new lamp or two.

Using a Home Maintenance Category

Here’s the beauty of saving up for problems before they occur: you don’t panic when things need replacing. Each month we set a little bit of money aside for home and vehicle maintenance. They are separate categories in the budget. When something breaks we dip into the maintenance fund and fix what needs fixing.

No panic. No wringing our hands. It’s fixed and we move on.

Now a night stand lamp may not seem like that big a deal to most of you. And you’re right — our home maintenance fund is really there so when the air conditioner breaks or something major like that. But we can still dip into it as we see fit to replace things around the house.

This concept is key to your financial success. If you don’t have money saved up for emergencies or specific home problems you will find yourself digging into other meaningful categories to pay the bill, or worse, you’ll put it on a credit card. Simply planning ahead by setting money aside each month can save you hundreds of dollars of pain and interest.

Value Your Time

This past Saturday we decided to divide and conquer our to-do list. My wife would do the grocery shopping, go to the library, and find some lamps for the bedroom. I was left to clean (as best to my meager cleaning abilities) our house.

In the midst of vacuuming she called me with a question.

I’m in Target. I’ve been to TJ Maxx, Ross, and the other discount stores. I couldn’t find two of the same lamp. Target has two lamps, but including shades they will be $80 or so. Is that too much?

$80 for lamps seemed like a lot of money to me. I mean, they’re lamps. They just sit there and provide light.

But I know my wife really well and I know she would have found a deal out there if there was one to be found. (No, we didn’t check Craigslist and negotiate to a great deal. Not this time. We wanted new lamps.)

The value of time started to kick in here. She had been gone all morning and had visited several stores. This seemed to be the best deal she could find. I told her to go ahead and buy them, get them home, and if for some reason I found them unbearably ugly (likelihood: 1%) then we could take them back the next day.

Paying Retail Price Can Make Sense

Sometimes paying retail makes sense. When you are dealing with small items that likelihood of a significant discount is small. It doesn’t make a lot of sense to search for hours in hope of finding that item that is $10 less. You’ve just spent several hours for a $10 discount. Do the math. You’re not making much money per hour for your efforts.

At some point you have to ask yourself What is my time worth to me? That is something for you to determine; I can’t tell you. But I think we can all agree that if you spend four hours looking for a $10 discount ($2.50/hour) that your time is definitely worth more than that.

Compare paying retail on big purchases. That doesn’t make sense. If you are buying a car worth thousands of dollars you can surely get the seller to knock off a few hundred dollars. There’s more wiggle room because the car is worth more money. Same thing with homes and appliances. Larger items equal larger potential discounts.

You can also cut costs with your monthly bills like your cell phone and cable TV. I’ve written in the past about cutting monthly costs by asking for a discount, and how I saved $175 per year on my satellite TV.

You can’t say the same for buying a blender. I’m all for researching to make sure you don’t get a poor quality blender.

But at the end of the day just buy the blender and move on with your life!

Don’t doubt. I definitely feel the same way. Most of us could do with more with less to the benefit of both our bank accounts and the environment.

But what about paying for value? Is there a place for that instead of constantly depriving ourselves or always buying the cheapest option?

Should we focus on minimizing our number of purchases while maximizing value we get from the purchases we do make?

Living Deprived Isn’t Living

While I completely agree with Dave Ramsey’s motto of “live like no one else so that you can live like no one else”, I don’t agree with living completely deprived. And I don’t think that is what he is saying, either.

There is definitely a line between living like a hermit (and never spending money on anything) and living frugally or in a minimalistic style. I am of the mind that living deprived back in your ultra-frugal cave is quite unhealthy. If you never see or interact with your friends, you probably won’t have any.

Maximizing Value on Meaningful Purchases

Unfortunately for most of us this isn’t a problem. We spend, and spend, and spend. So moving toward frugality is usually a good idea.

Moving to a place where you try to cut back on purchases isn’t going to be the most fun you’ve ever had in your life.

It takes some self-reflection to understand what is truly important to you. On these things you can pay for value… buy the better brand, keep it as a line item in the budget, enjoy it.

Everything else? Cut it or cut it back or go generic.

A Story of Computer Audio Purchases

I’ll use an example from my own life to help shape this thought.

I’m on my desktop computer a lot. I’m a blogger and a PC gamer. I spend a lot of time in this chair and a good chunk of that time I need speakers of some sort.

I prefer headphones both for gaming and music as I can keep the sound just on me and not bother my wife. (Bonus: she doesn’t have to listen to the teenagers screen obscenities when I’m gaming.)

On the other hand there are a handful of times each year that I prefer to use my external speakers to listen to music or share a video with a couple of friends.

With these two facts in mind let’s look at the purchases I made in this category.

• Headphones: $70 Plantronics headset with swivel microphone (for yelling obscenities back at those teenagers)
• Speakers: the original harman/kardon speakers from one of my very first computers

I purchased those headphones when I was in college. At the time $70 was a lot of my spending money. But I valued getting quality headphones with accurate sound and a decent microhphone. They have been worth every penny and I’ve used them for hundreds if not thousands of hours sitting in this very chair. (Notice, too, that I am still using them 5 years later.)

Compare my headphone use to my speakers. The speakers I have are… okay, but they really should be replaced. They are old. We’re talking ancient in computer technology. I would bet the speakers are at least 9 or 10 years old. I’ve had them since high school. They work… unless you turn the sound up really loud; then the speakers crackle and sound like garbage. But they work, they function, and I only use them a handful of times each year.

There have been several times when I’ve considered replacing my external speakers for a $50 set at a big box electronic store. Each time I stop myself and think about how often I use them. It would be nice to have new speakers, but I don’t value them enough to make the purchase. In fact I would rather spend $100 to replace my headset first!

In these two examples I have maximized my enjoyment and value of the headphones. I gladly spent $70 for them and I would gladly do it again. On everything else such as the speakers, cut.

And keep cutting until the day comes that you decide the value is worth the price.

Nonetheless I want to share some pointers on how you can save a ton of money by not only purchasing on Craigslist, but negotiating the purchases you make on Craigslist.

Search Craigslist for Bargains

Craigslist is the world’s largest garage sale. Local and free classified ads for everything you could possibly want to buy or sell. Literally just about anything you would find on eBay you can find on Craigslist in a decent sized city.

• Want to buy a car? You can find one on Craigslist.
• Want to buy a couch? You can find one on Craigslist.
• Want to buy a microwave? Yup, you can do that on Craigslist.

We have purchased all three of these items off of Craigslist, and saved hundreds of dollars while doing it.

But I’ll tell you the stories of the car and the couch another day. Those were pretty much straight up purchases.

Today is about negotiating.

Simple Teacher Needs

My wife is a music teacher. For the last year and a half one of her schools hasn’t had room for her — literally. They ran out of classrooms. So she carted her music instruments from room to room to teach the kids.

Finally after an extraordinarily long wait the school system hooked up power to an available trailer classroom — it had been sitting there the entire time, but it took 18 months to get it power and handicap access. (Annoying? Yes.)

Of course she and the other teacher that will be sharing the room are really excited about suddenly having a room. She stayed late several days and worked on a Saturday to get the room ready for the kids.

During the week of cleanup and preparation process she came into our office. Do you think I could find a mini-fridge and microwave on Craigslist?, she asked.

As much as it brings back dorm memories for me, I told her of course you could. Why not?

Mixing Negotiation and Craigslist

She hopped on Craigslist and found a few acceptable looking listings. She found a fridge for $45 and a microwave for $30.

She did some price research and found that the fridge would run $90 or so at retail. The type of microwave she was looking at (non-gourmet to say the least) might run her $50-80 at retail.

Assuming those items worked properly she is already ahead of the game to the tune of at least $65. But we both knew she could do better by simply asking for a lower price.

Use the Walkaway

Neither of the listings had phone numbers and to be honest asking via e-mail is pretty pain free. She got out her tiny violin and explained her situation as a teacher, this is for the classroom, and could they lower the price on the minifridge?

The seller countered by offering to lower the price to $40 and also sell us a small table for the fridge for $15. My wife kindly explained she didn’t need the table and $40 was simply too much. (As a seller counter-offering is a good idea, but this was a good idea gone bad. We weren’t wanting accessories. Our main focus was price.)

She walked away and didn’t buy the fridge. If this had been in person it is more likely the seller might try to catch her before she got into the car. How about $35?

But since this was via e-mail she simply let the seller know it was too much and left it at that. You must be willing to walk away.

Simply Ask for a Lower Price and a Quick Sale

I’m not joking here. She e-mailed the microwave seller and offered $15 cash, and we could pick it up the next day.

The seller accepted. (And immediately made me wish she had offered $10!)

Either way that’s a $15 savings and 50% off the asking price.

I’m not foolish enough to think you’ll be able to get 50% off of every purchase, but $15 saved is still $15 saved. (More money for the classroom!)

Never accept what the seller is asking for up front. Smart sellers increase the price just a little bit in anticipation of negotiation.

Even though you are negotiating online you can still save money. Just imagine yourself walking the aisles of the seller’s garage sale. You wouldn’t feel shame in offering $2 for the whole stack of 25 cent CDs, would you? I didn’t think so — so don’t feel shameful here.

Even if you save just $5 that is still $5 you get to keep. And what did it cost you to ask? A few seconds typing an e-mail?

Why wouldn’t you ask?

This year I am participating in a few fantasy leagues with other personal finance bloggers; the first of which was a fantasy baseball league through Yahoo — something I had never done. I understand the basics of baseball,  but I’m not a huge fan of any team.

Plus I didn’t know what all the different stat categories meant when we first started. I had to do some quick research to try and get up to speed.

Does it sound like I am making excuses? I wonder why…

PF Bloggers Fantasy Baseball 2009

Here are the final results from our league. I finished in 5th place — just barely in front of 6th and 7th.

What I learned:

• Major League Baseball’s season is extraordinarily long. 162 games is a lot to play in one season. This made the fantasy experience much different because you virtually had to change your lineup every day. (Compare this to football where you change your lineup once per week because the games are all played on Sunday/Monday primarily.)
• Baseball is random and full of streaks and slumps. I kind of felt like I was trying to time investing in the stock market. This player is doing good now — but will it continue going forward? Or will it fall away? This guy is in a slump — is he a value, or does his “stock” have further to fall?
• Fantasy baseball is probably not for me. The season was just too long for me. Constantly monitoring everything (who is injured, who is pitching tomorrow, etc.) was just too much for me.
• I like MLB Network Television. I became really fond of watching the crews on MLB Network. They’ve done a great job and I believe NFL Network is making changes to try and match their success.

Some of the people that played and some of their great posts:

• Cash Money Life – he and FFB destroyed the competition. (Why You Should Only Bank at FDIC Insured Institutions)
• Free From Broke (Make Money Taking Real Estate Photos)
• Stupid Cents (Your Homeowners or Renters Insurance Could Still Be Lower)
• My Life ROI (Top 15 College Degrees by Starting Salary in 2009)
• Budgets are Sexy (The Cost of Being a Dude — awesome)
• Steadfast Finances (The Great Unwind: Frugality, Deleveraging, and Ethics Alterting the Post-Crisis Consumer — that’s a mouthful!)
• Own the Dollar (How to Dispute a Negative Mark on Your Credit Report)
• Good Financial Cents (The Magic of Dow 10,000)

PF Bloggers Fantasy Football 2009

As you can see, Fantasy Football is going much better for me! I am currently in a three way tie for first place, but it is a long season and anyone can still win it. (Trust me at one point I was winning the fantasy baseball league before crashing and burning.)

Anyone else busy with fantasy sports this time of year?

You’ve realized your bank could care less about you. You’re earning no interest on your checking account and your savings account interest is well below the national average.

It’s time to go.

Making one change — your bank — could lead to thousands of dollars in interest. That’s a big win.

5 Simple Steps to Switching to a Better Bank

1. Realize you need to change accounts.

You aren’t (or shouldn’t) be satisfied with your current bank. You are probably earning very little interest. The typical interest rate at a national (”big”) bank savings account is 0.2%.

At 0.2% you would earn $200 on $100,000 in savings.

That’s pathetic and unacceptable. It’s time to get upset, time to get mad, time to make a change.

2. Find a better deal and open the new account.

If you are earning very little interest on your checking or savings account finding a better deal will not be difficult.

Seriously. It isn’t hard. A few Google searches and you will be able to easily earn 500% more interest very easily. That’s the difference between 0.2% to 1.0%.

There are three online banks that I personally recommend because I have used them in the past:

• ING Direct – Currently paying 1.30% on savings accounts. That is 6.5 times as much as that 0.2% you may be earning right now with your current account. You will also earn $25 if you open the account with $250 and use one of my referrals.
• Ally Bank – Some of the highest interest rates available on CDs. Currently paying more than 8 times the national average for money market accounts.
• Virtual Bank – currently paying 0.8% on balances less than $10,000. Has a great referral program that pays you $20 for every referral you send. (You can earn $1,000 doing this.) A quick way to earn at least $60 if you are married.

I have accounts with all three of these institutions. I’ve used ING Direct the longest and they have the best customer service.

Don’t forget to look locally. We recently found a great local bank paying over 4% on a rewards checking account. We are earning a ton of interest each month from switching to this bank.

It doesn’t really matter what new bank you pick. Just find one paying a lot more interest and get going. Open the account with a small amount of money (whatever the minimum is). More on why in a moment.

3. Re-automate everything. Set up direct deposit, monthly bills from old account.

You are just getting started by opening up the new account. Now you have to wait for everything associated with a new account — new checks, new debit cards, etc.

Once you have your new bank swag you face the monumental task of switching over all of your automatic payments and direct deposits from the old account to the new account. This one step took us over a month to complete. Yes, it is annoying. Yes, it is worth it.

Why did it take so long? Mostly direct deposit. You want to make sure your paychecks are going into the correct account before you close the old one.

To make this process more simple I recommend you find your statements for the past three months. Go line by line and find all of your automatic payments — utility bills, credit card payoffs, ministry deductions… anything that you pay automatically through your bank account.

Once you have your list you need to contact each company you have been paying and get the information changed. Also verify that the changes will take place immediately, not on the next billing cycle.

4. Transfer bulk of money from old account to new, but keep some reserves to cover forgotten automatic debts on old account.

You’ve gone through all of the above steps. You’ve changed your automatic payments. You have your new checks and debit card in hand.

Remember that you funded the account with a very small amount of money, probably whatever the minimum is? Up until now you weren’t ready to use the account.

Now you are — so do a bulk transfer of a large amount of your money to the new account.

But be careful! Leave some reserves in the old account just in case you missed an old bill.

You will get hit with all kinds of fees if an automatic payment tries to go through and there isn’t enough money in your account. You’ll get fees from the bank for overdrafting and fees from the provider for not paying on time and having a returned payment. Having reserves prevents this.

5. Close old account.

With a smile on your face and more interest in your pocket, the fun begins. Walk into your local branch office and politely ask them to close the account.

You may get a counter-pitch, but too much has been done by this point to bring you back. (Plus you may not get a pitch because your account balance will be pretty small by now. The bank won’t value your account as much.)

When you close the account they will most likely give you the remaining funds in cash. Head straight to your new bank to celebrate with your first deposit.

The problem we then faced was this: we knew we needed to replace the timing belt, but didn’t have a mechanic that we trusted to do the job right and at a fair price.

The Value of a Trustworthy Mechanic

We do not lack for car shops around our home. We’ve got several big chains in our area. But we haven’t been able to really develop much of a relationship with any of the crews.

Additionally since they are tied to large megacorporations they are less about relationships and more about hitting their numbers for corporate.

On the other hand a local, independent shop has a reputation to protect. It is in their best interest to treat you fairly, to provide great service, and to do quality work.

In short a trustworthy independent shop won’t charge you $300 for a $5 fix. They can see past the short-term gain.

As with any small business your reputation is your business. The better you treat your customers the more likely they are to spread the word to their friends and family about your business.

Tapping Our Network for Recommendations

We went to Financial Peace University the same day the article on knowing experts went live on the site. I’ve mentioned in the past that we are helping facilitate a small group of FPU members at church. (It’s still going great.)

During our discussion talk of mechanics and home air conditioning problems surfaced. We couple was raving about two separate companies they had found that treated them right, showed up on time (for the HVAC problem), and charged a fair price.

We were thrilled and got the information for the independent car shop.

The Joy of Finding a Trustworthy Mechanic

We had our car in the shop the very next day. While waiting in the small lobby for someone to come out to check in the car I noticed their mission statement on the wall.

This is a paraphrase, but it said something like this:

[Company name] exists to provide quality car service to our customers. We believe in doing quality work at a fair price to the customer that provides a fair profit for the company.

It was much longer than that and ended with a verse from Proverbs, but I can’t recall it right now.

Needless to say it made us feel really good about where we were dropping our car off.

Recall that my mechanically inclined friend told me replacing the timing belt and water pump should cost somewhere in the $500 to $600 range.

The shop quoted me $580.

Other shops near us quoted me $720.

The bill came to $575.

Quality work. Fair price for the customer. And the company profited.

We won’t be taking our car anywhere else for significant work even though it is a 40 minute drive round trip. Now that’s car mechanic joy!

Nonetheless I clicked through to the article to take a quick read. My thinking was pretty spot on, but the article also talked a bit about how there were so many people looking for jobs that even if you wanted to get hired at a seasonal job the competition would make it extremely tough to land the gig.

That’s when a personal finance bombshell hit me like a speeding train of nonsense.

Expect Overtime? Expect Failure.

I was completely wiped out by this:

Jenny Posner Brown-Shern, 37, doesn’t want to get left out in the cold. She has a full-time job as a social worker. Her husband, Joel, has a good job as a fraud analyst for an office supply company, but his overtime was cut this year and so were some of Brown-Shern’s benefits.

“We were dependent on that overtime,” she said. Now, they are both trying to find seasonal jobs to fill that gap, and hopefully buy some Christmas presents for their children.

I’m going to skip the whole lecture on how presents should not equate happiness. We will cover that topic in the future.

Instead we will focus on the absolutely mind boggling idea of depending on overtime to make ends meet.

Relying on Overtime is Stupid

It is called overtime for a reason. It’s over the regular 40 hours per week you would normally work.

Three quick synonyms for overtime:

• unexpected time
• not normally on my paycheck time
• accelerates my mortgage or debt payoff plan time

Relying on overtime is a dumb financial move. You are guaranteed 40 hours. Everything over that is gravy and should be used to further your financial goals a bit.

From the quote above this family appears to have set up their budget and lifestyle around an artificially high income anchored by overtime. That is tragic.

This family’s dependence on the husband’s overtime highlights some problems with their financial plan:

• They are living a lifestyle above their income… by counting on overtime for the monthly budget.
• They haven’t cut their expenses down to a budget-friendly level… and prefer to stretch themselves with overtime or a seasonal job.
• The family may value stuff… even though times are tough the top goal is to provide presents for the kids at Christmas.

Some of you may be sitting there thinking, Wow, that is kind of harsh!

And you are absolutely right. It is harsh. I don’t know them and I don’t know their situation. Maybe the overtime was “guaranteed”. Maybe they provide presents to kids in poor communities or at hospitals.

But it is abundantly clear that if you can admit you are relying on overtime, you can admit you’ve made some dumb financial moves.

Depending on the Undependable Will Doom Your Finances

Relying on overtime is like relying on scratch-off games from the convenience store. Sure, you might go on a lucky streak and walk away with a few extra bucks every once in a while. But would you rely on consistently winning at scratch-offs? Obviously not.

That’s the core of this problem. Relying on the unreliable will eventually catch up with you.

Unreliable tenants doom would-be real estate millionaires.

Unreliable or late paying customers doom upstart companies.

And unreliable overtime that you are relying on will kill your personal finances.

How to Close a Checking Account

I was surprised at how easy closing our checking account turned out to be. You should have seen the look on the banker’s face when I told him why I was closing the account!

Here’s how it went down:

“Is there anything we can do to keep your business?“, he asked in polite banker-speak.

“Well my new account is paying 4.41% on my checking account. Can you beat that?”, was my reply.

(Jaw hits floor, blank unbelieving stare back at me)

“Yea, it is a really good deal. Please close the account.”

Five minutes later I walked out with cash in hand — headed straight for our new bank.

Why We Kept a Non-Interest Paying Account

We kept an account open at a brick-and-mortar bank so we could write and cash checks. We don’t do this very often so we kept minimal amounts of money with that bank. Good thing, too, since it didn’t pay a dime of interest.

Of course as part of the trade for not getting paid interest we also didn’t pay any fees.

Before I closed this account I wanted to make sure the new account was fully operational. I waited a few weeks to get our checks in the mail and verified direct deposit had switched.

Everything was working, so we made it official. One account closed, another much better account opened.

Don’t Be Easy Bank Profit

Banks make profit by taking your deposits and lending them out at an interest rate higher than what they are paying on your deposits. In my case they were earning maximum profit because they didn’t pay me a cent of interest!

I’m not anti-banker. I’m not anti-capitalism.

But they aren’t exactly on your side. They want to make money off of you.

Your banker isn’t going to call you to tell you about a great new account they have that is going to make you (and cost her) money.

In fact if my banker called me, I would worry. I see only two reasons that my bank would ever call me:

• There is either something wrong with the account (overdrawn, late payment, etc.) that is potential risk to the bank (cost)
• They want to sell you something (revenue)

Shock Your Bank Today

What are you waiting for? Why are you putting up with poor customer service, low rates, or high fees?

Drop your bank a cordial “Let’s just be friends, okay?” and start making some money!

Don’t know where to find a better banking deal? Here are a few banks I have personal experience with that I highly recommend:

• ING Direct – rates are pretty low right now (although likely higher than your local brick-and-mortar bank), but you simply can’t beat the customer service. Bonus: if you open an account with $250 or more, you get $25
• Ally Bank – I recently opened an account with Ally Bank to try out their online certificates of deposit. Ally’s rates have been very competitive (in fact they are the best I can find on a national level). If you need to park money or want to start a CD ladder, I recommend Ally Bank.
• Find a local high-yield rewards checking account like we did

Justification: the larger your network, the more people you know in various industries that can inform you of how to get the best deals and not be taken advantage of by a salesperson. They keep you aware of what is going on in areas that you would normally be completely ignorant of.

Can a Large Number of Friends Make You Rich?

This may seem like an odd theory, but I’m starting to think it is true.

Let me use a story from my own life. I have a friend that lives in another state (we’ll call him John) that is mechanically inclined. He has a project car sitting in his garage, and he just finished up saving money to go back to a technical school to get formal training. (Smart guy — is paying for education up front with saved money rather than loans!)

In short he is the guy that I call when things start squeaking, grinding, and clunking on our vehicles.

A few weeks ago we had John and his family over for the weekend. I asked him about a squeak that our Honda Civic is making when the air conditioning compressor cycles on. We went for a drive, listened for the squeak, and as you might expect no squeak occurred when we were expecting it to occur. After a couple of insightful questions he told me it was most likely nothing to be worried about.

We started discussing maintenance on vehicles and he asked if I had the timing belt replaced on either of our vehicles yet. To be honest that is something I hadn’t had one thought about. It wasn’t on my radar.

He quickly explained to me that Honda’s need to have their timing belts replaced every so often, and since our vehicles were getting older we should look into it. We checked the owner’s manual and it was in there — the timing belt on the Civic needs to be replaced every 110,000 miles or every 7 years.

Our Civic is a 2002 model, so we are right at 7 years.

Knowing Experts Should Save or Make You Money

My friend potentially saved me $2,500. Replacing the timing belt should run us $500. If the timing belt goes unreplaced it will snap and do significant damage to the engine of the vehicle. Replacing an engine would cost at least $3,000.

It’s simple math. Knowing that expert saved me money. (Assuming I get the timing belt replaced soon — it is on the to do list!)

Be an Expert for Your Network

On the flip side of the equation I try to be an expert in financial matters for my friends. I’m not certified and I don’t provide financial advice as a full-time job. But I’m the guy that reads Money Magazine, follows a ton of personal finance blogs, and writes a blog of his own.

I also have the “find a good deal” character streak. When someone says they are thinking about buying a laptop I do everything I can to find them the best deal.

You must provide value to get value. This is a classic tenet of networking. You have to give to your network, often for a long time, before you can request value back.

Are you an expert?