Bud's rule number three is as follows.
"If you got to tell a lie, make sure it’s simple and easy to remember.”
Bud tells the readers this rule in chapter two. Bud is good liar. He admits it several times in the story, and rule number three is a good reason for why he is a good liar. His rule says to keep lies simple. That means don't make them overly complex because then the lie becomes too convoluted for its own good. The easy to remember part has a hidden extra detail in it. Generally speaking, the easiest lies to remember are the ones that contain truth. Bud knows these facts about how to tell lies better than most, but in chapter two Bud finds himself on the receiving end of a well told lie.
Bud is woken up by Todd Amos who is shoving a pencil up Bud's nose. Bud of course defends himself and punches Todd. A fight ensues and is broken up by Todd's mom. Of course Todd doesn't want to take any of the blame, so he tells a simple, believable lie to his mom. Todd tells his mom that Bud wet the bed, which she immediately believes. Todd is most likely a bed wetter, and that is why he knows that she will believe the lie. In fact Bud is even slightly impressed with the quality of Todd's lie. Despite Bud's acknowledgement of the good lie, Bud still gets in trouble and locked in a shed for the night.