Fundamentally, there are two ways to have more money. You can either earn more money or cut costs. Negotiation skills are the most powerful tools to have in your "hidden income" toolbox, because if you know how to negotiate you can do both (by negotiating a raise at your job or negotiating a lower rate on every bill you pay).

Instead of cutting back on the things we love, we can save on the things we hate by paying lower prices using the negotiation strategies I've outlined below.

A few one-time, 5-minute phone calls can save you thousands every month.

I'll teach you, in detail, some easy ways to save money on bank and credit cards fees, your car insurance and your cell phone bill – all potentially worth thousands of dollars each year – no willpower needed.

1. 

   Coverage options

   First, you'll want to check to see if you have the right amount of coverage. Nobody teaches us about this stuff, so when you bought car insurance, you may not have known which coverage options to choose.

2. 

   Your current plan

   Second, figure out what kind of coverage you currently have and how much you're paying. Don't be lazy — do this. If you don't have your current info in front of you, how can you hope to save? Either call your car insurance company or use their website.

3. 

   Shop around

   Third, it's time to start shopping around. I prefer the phone because I can usually sweet-talk the rep into telling me about other deals that the websites don't offer. Computers, however, seem to be immune to my charm.

   I made it easy for you. Here are the phone numbers of the big insurers:

   Geico:	1-800-861-8380
   AAA:	(866) 539-8033
   Allstate:	866 704 9900
   Progressive:	1-800-776-4737
   State Farm:	You can get to their auto insurance site here.
   21st Century Insurance:	Don't use this worthless insurance company. I used to use them, but they sent me multiple envelopes in the mail EVERY SINGLE WEEK until I finally canceled them. The rates were great, but the hassle wasn't worth it.

4. 

   Ask these questions:

   Fourth, be an expert caller by asking these questions.

   With each call, you should say, “AAA (or whoever) is offering to insure me for $XXX less” (silence).

   See what they do. (Note: Negotiating lowering insurance using this technique is much harder to do with car insurance companies than banks, so don't expect very much from this.)

AAA, Costco, credit cards, large employers, associations (AARP, teachers' union): Many of these offer discounts on car insurance. Log onto their website and browse to “perks.”

It seems like a lot of work, but the savings are substantial.

Use the tips in this video to pay a lower rate on your credit cards

When it comes to paying off debt, one of the best ways to make a huge dent in it is to pay a lower rate. Even saving just a few percentage points on your credit card bills can be worth thousands over time.

Try these techniques to negotiate
bank fees instead

(I've been with the bank for many years, which you should always use to your advantage when calling to complain. Banks pay hundreds and sometimes even thousands of dollars in customer-acquisition costs and don't want to lose you.)

Key Takeaways:

If you're 25 years old and you save $100/month until you're 35 (for only 10 years, then you never save money again), and your dumb friend starts later – saving $100/month from age 35 to 65 (that's 30 years compared to your 10 years) – you will have way more money (over $50,000 more) than him at age 65.

The magical benefits of retirement accounts

Many people mistakenly think that retirement accounts are just places for you to save money until you're 65.

Actually, they offer you humongous benefits if you agree to save for a long-term horizon. Let's compare regular (taxable) investment accounts with retirement accounts.

In a retirement account, you get big tax benefits. While 10% or 20% may not seem like much in 1 year, when you compound that over 30 years, it becomes a gigantic amount.

In fact, if you were to start a retirement account next week, two things will happen: (1) You will be more financially prepared than 99% of your peers, and (2) you will be rich.

Yeah, I said it: If you start a retirement account in your early 20s or 30s and fund it regularly, you will be rich.

Let's look at a simple comparison of investing in a retirement account vs. just investing in a regular, taxable account:

Don't worry about the exact amounts. Just notice the difference in how much you earn - especially at the end.

If you want real wealth in your retirement, you absolutely need a Roth IRA. It's another type of retirement account.

And every person should have a Roth IRA. It's simply the best deal out there for long-term investing.

Remember how your 401(k) uses pre-tax dollars and you pay income tax when you take the money out at retirement?

Well, a Roth IRA is different than a 401(k). A Roth uses after-tax dollars to give you an even better deal. With a Roth, you put in already taxed income into stocks, bonds, index funds – whatever – and you don't pay when you withdraw it.

Again, you're expected to treat this as a long-term investment vehicle.

You are penalized if you withdraw your earnings before you're 59.5 years old. (Exception: You can withdraw your principal, or the amount you actually invested from your pocket, at any time, penalty-free. Most people don't know this.)

There are also exceptions for down payments on a home, funding education for you/partner/children/grandchildren, and some other emergency reasons.

And there's a maximum income of $181,000 to make full contributions to a Roth. But you can read about those later.

What's the big takeaway from all those restrictions and exceptions? I see 2 things:

It's easy. You can go through your current discount brokerage, like E*Trade or Scottrade.

I created a video to help you show how to choose a Roth IRA

I recommend an independent service like Vanguard.

Next steps, call them up, tell them you want to open a Roth IRA, and they'll walk you through it.

Special note: These places have minimum amounts for opening a Roth IRA, usually $3,000. Sometimes they'll waive the minimums if you set up an automatic payment plan depositing, say, $100/month.

Shop around though.

To show you how costly not paying down your debt can be, I wanted to give you a quick example of simple items that could be costing you thousands more because you haven't tackled your debt strategically.

Take a quick look at this table with a few examples of how much more expensive things get one you finance them with credit cards and minimum payments.

Guess how much an iPod costs if you
finance it with a credit card?

One of the biggest problems with credit cards is the hidden cost of using them. It may be incredibly convenient to swipe your card at every retailer, but if you don't pay your bill the same month, you'll end up owing way more than you realize. Take, for instance, an iPod. It looks like it costs $250, but if you buy it using a credit card with the average 14% APR and a 4% minimum payment, and then only pay the minimum each month, you'll be out almost 20 percent more in total.