I’ve made some major purchases in my life including houses, cars and even my grand piano. All of these things I’ve had to finance. And, several years ago when I was a starving musician first starting out, I had quite a time arranging financing for my first home. In fact, I had to pay almost two percentage points higher than the bank rate. Why? Because, I wasn’t showing enough on my tax returns and was considered high risk.

I was however, able to leverage the equity on my first home to finance my grand piano at a pretty good bank rate. As for my cars I’ve always bought used and paid cash. Like most low income earners with little to no credit, or bad credit, I learned over time how to build good credit.

It was a bit frustrating sometimes, having to pay higher bank rates, but I must admit the benefits of being a self-employed musician meant that I could deduct a lot of expenses including the interest on these loans.

One of the things I’ve learned over time is that even though I am considered high risk, lenders still want my business. There were a couple of things however which kept me from negotiating better lending rates. The first is that I felt embarrassed to show these people my income statements. Even though they didn’t really reflect my earning power, I felt ashamed. And, because of that I didn’t even try to negotiate my lenders. The second thing is I really didn’t even know that it was even possible to negotiate my lending terms, much less ask for better rates.

No matter if you are in a low income tax bracket or a high one, there are good money managers and bad money managers. I have a millionaire friend who runs up his credit cards to the maximum and doesn’t pay them until he gets calls from the collection agency. Then he finds ways to move money to pay everyone and then starts the same process all over again. Even though he’s a millionaire, his credit rating is poor.

In order to be an excellent money manager it’s important to learn two things. One; don’t be ashamed of where you are at. Feeling ashamed will keep you focused on what you don’t have rather than what you are doing to better your current situation. Poor people stay focused on the problem. Rich people stay focused on the solution. If you want to fix your problem, or change your current situation, stay focused on what you can do to instead of what you can’t.

The second thing you need to learn is how to negotiate your lenders. If you are renewing your mortgage, purchasing a used car, or making any other major purchase make sure you negotiate the lender. How do you do this? When you sit down with them ponder for a few moments the rate they quote you. Then look at them in the eye and say these exact seven words, “you’ll have to do better than that’. If for some reason they say they can’t do anything, be prepared to walk away. Also, try to negotiate the rate before they do a credit check because each request is monitored by the credit bureau and that can lower your credit rating if you get turned down.