In developing world countries and even in parts of Western Europe, skillful bargaining separates the budget-savvy traveler from the timid tourist. Overpaying at a local bazaar can be a strong incentive to hone one's bargaining skills, but it means an unnecessary hit on an already-slim pocketbook, so we suggest that you study up before you take off.

It's important to know when to haggle: many merchants enjoy bartering and make their living off of overpaying tourists, but in some situations, attempting to haggle is rude. Customs vary by country and region, but some general tips apply. If taxis do not use meters, then you can and should hash out a price before driving off. In other situations, it's best to observe those around you; if they are bargaining, you can too. Usually, merchandise without a labeled price is fair game, but sometimes you can bargain for tagged merchandise as well. If you're not sure, ask "Is that your lowest price?" or inquire about discounts.

The following tips will help you cut deals against even the most hardened hawkers:

1. Start low. Never feel guilty offering what seems to be a ridiculously low price, as many merchants automatically quote prices that are several times too high. Your starting price should be no more than one-third to one-half the asking price.

2. Use your poker face. The less your face betrays your interest in the item, the better. Coming back again and again to admire a trinket is a good way to ensure that you'll overpay. Stay cool, and don't be afraid to point out flaws in workmanship or design.

3. Do your homework. Check the quality of the item you're buying, staying on guard for false documents, and determine how much it should cost. If you can't tell, you can try to watch other customers to gauge what is appropriate. Before you start haggling, decide on a maximum and target price to keep from paying too much.

4. Come prepared with bills in small denominations. If you tell a vendor that you can't pay more than a certain price because you don't have the money with you, then you'll need to produce bills that add up to the right amount - you won't be receiving change.

5. Bargaining with more than one person always leads to a lower price. Have a friend pretend to discourage you from your purchase - if you seem reluctant, the merchant will drop the price to interest you again. Try to bring a local or native-speaking friend: if these people don't appear to be tourists, vendors may slash prices more readily.

6. Refuse any vendor or driver who bargains rudely; don't hesitate to move on to another vendor if one will not be reasonable. Turn away slowly with a smile and a "thank you" upon hearing a ridiculous price - the price may plummet.

7. Don't bargain for sport. Keep in mind that starting to bargain without an intention to buy is a major faux pas. Agreeing on a price and declining it is also poor form.

For more great travel information and advice, check out www.letsgo.com or pick up a Let's Go guidebook at your local bookstore.

Foreign Currency Exchange

While currency exchange will probably be available in your arrival airport, it's wise to bring enough foreign currency to last for the first 24 to 72 hours of your trip. When changing money abroad, try to go only to banks or cambio offices that have at most a 5% margin between their buy and sell prices. Post offices generally offer good rates. Since you lose money with every transaction, convert large sums (unless the currency is depreciating rapidly), but no more than you'll need.

If you use traveler's checks or bills, carry some in small denominations (the equivalent of U.S. $50 or less) for times when you are forced to exchange money at disadvantageous rates, but bring a range of denominations since charges may be levied per check cashed. Store your money in a variety of forms, including traveler's checks and an ATM and/or credit card. All travelers should also consider carrying some U.S. dollars (about U.S. $50 worth), which are often preferred by local tellers.

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