I just got back from my trip to Bali.  The best thing I learned is to negotiate everything.  You can really save a lot of money. Train yourself to be a better budget traveler by improving your negotiation skills.

From hotel rates, souveniers, taxi fares, etc... everything could be negotiated in Bali.  The same is true in almost every travel destination.  Americans are used to a price being on a label with no negotiation possible.  This is not true in the rest of the world.

A good example of this is the markets and shops that are everywhere in Bali.  Too many people just pay the price listed.  Don't do this!  All you have to do is ask for a lower price to figure out that the prie on the label is not fixed.

One of the best negotiating tactics is to walk away.  Sometimes I would get a price much lower than the original price, but I would reach a point where the sales person didn't seem to want to go any lower.  I would then say no thank you and start to walk away.  At this point the price almost always lowered some more.

Another good tactic is to put a certain amount of money in your pocket and let the seller know that is all you have.  This tells the seller that negotiating for a higher price is worthless since you don't have any additional money on you.  Just make sure you don't start the negotiation with this tactic or else you will have difficulty getting a price lower than what you have in your pocket.

When you are looking for a good value on a hotel room, make sure you understand that hotels are in competition with each other.  Don't negotiate and accept a hotel price without visiting at least one or two other local hotels.  You might think you are getting a good deal (compared to what you pay in the U.S.), but you might pass up a much larger room across the street if you fail to compare your options.  Tell the hotel that you have a good offer from another hotel nearby to see if they will match or lower the offer.  Again, be prepared to walk away to see if the price will come down as you are walking out the door.  You can always pause outside and go back in to accept the negotiated price if no additional price break is given by walking away.

In some cases, you will want to seek out fixed prices to get the best deal.  For taxis in Bali, the drivers were very good at negotiating, but the Blue Bird Taxi company only allowed metered rates.  After being quoted higher prices from other drivers, I was only using Blue Bird taxis by the end of my trip.

My final comment on this topic is to think about the life of who you are negotiating with.  It might be fun to negotiate a hat from $5 down to $1, but remember that you can probably afford to pay $3 for the hat and an extra $2 will make a huge difference in the life of someone living in a developing nation.