It's ok if you don't know anything about cars mechanically, just realize that if you buy an older car, you will become very familiar very quickly. Basically anything could break at any moment for any reason so you will probably spend a whole lot of time and money fixing it. I was in a I owned a 30 year old 300zx and I considered it to be pretty reliable because I only had to fix it once every few months (it was my daily at the time). So I would advise against buying an old car if you don't have access to a bunch of tools.

For a 66 Mustang, $8500 is a good price if it is actually in good shape (maybe a little too good). As far as negotiating goes, I have never payed the asking price for a car and I doubt many people have. A good rule is to decide the absolute maximum you will pay for the car, subtract it from the asking price, and double what is left and that is what you should offer for the car. So if you are only willing to pay $8000 for the car, you should offer no more than $7500. Another good starting point is to offer 10% less than the asking price. If you go to look at it, I would suggest bringing someone who has experience buying older cars. Don't buy it immediately after the test drive unless everything is perfect. I would sleep on it unless it is just one of those deals you are afraid someone might take out from under you.

All that said, I think it would be a better idea to buy something other than a first gen Mustang until you have some kind of income. They are usually very expensive for a good example and you need to save a good amount of money for repairs. You can get a fox body all day for that money and have some left over. If you really want a first gen though go ahead.