Mate I think you are confusing us by telling two things at a time. Will you please tell us with some examples so that we can easily guide you.

If you bid on broad or phrase matches your ads will still show for terms that contain other words and YOUR words that users types.

In example. You bid on "frog legs" phrase match.

Someone types in to the search engine
free frogs legs

Your ad WILL show! And you dont want some clown looking for FREE frogs legs clicking on your ad.

So you put negative keyword -free in and now your ad will NOT show the next time someone types in free frog legs

Your list of -words is more valuable than your list of +words.

Too bad there is no spy program for negative words! Or is there?

There's a tactic you can use by using broad match phrases, which costs way way less. But still get highly targeted traffic that acts like [exact match] if you use what is referred to as "Embedded negative match"

Embedded such as

-keyword phrase
-"keyword phrase"
-[keyword phrase]

if you bid on a term say... 'home loans' as a broad phrase, your ad will appear for 'apply for home loans' 'free home loan quotes', etc.

so if you just bid on 'home loans' (broad match)
and have negative embedded matches like

-free
-cheap
-"free quotes"
-"free home loan quotes"
-[free home loan quotes]

etc etc, then you're filtering all the others out so your ad only appears for 'home loans', obviously there are more filtering to do, but that comes down to testing, which can be done by using google analytics and seeing which phrases people are entering that makes your ad appear, then go back to adwords and re-filter any words, so your ad only appears for 'home loans' (broad match).

Others who maybe bidding on your phrase may be doing [exact match], or "phrase match" these guys will end up paying more than you cos you only bidded on broad match which is cheaper... it just means more work on your end to filter that process

My adding negative keywords, your adds will appear for less relevant searches. This in turn will lead to higher CTR and therefore lower CPC over time. It will also reduce wasted spend

Yeah, if you bid on cruises, you're going to get your ads showing when a bunch of people search for Tom Cruise. Not good for your CTR, so google will place you lower in the ads showing. And the clowns clicking on your ad probably won't be very targetted either.

Negative keywords would allow someone to get rid of the AD's that have to do with the overall matter of the site and display the ads that have to with particular page while still allowing the overall theme AD's to display on the appropriate page only!!!

getting rid of the word "free" is a good way to get rid of tire-kickers. Depending on your niche i guess.