March - April 2024

Finding a Good Financial Counselor

After reviewing your financial situation you have come to the decision that credit counseling may be the right choice for you.

The problem now is that there are so many to choose from how do you know if they are a reputable company. Here are a few considerations that you can use to ensure that you are choosing the right counselor for you.

Start off by asking what fees will be charged. This can all depend on what type of organization it is. Non-profit agencies typically offer smaller fees and their purpose is to help individuals over making money.

Make sure that you are working with certified counselors. Certified counselors have dedicated themselves to providing quality service. Make sure that the company is a member of a nationally accredited organization.

You will want a thorough explanation of how their Debt Management Plan works. Here are a few questions that they should be able to answer for you.

What is your monthly payment to them?

How much of it goes to your creditors and how much is dispersed if there is more than one?

How will they help you deal with your creditors?

What are your obligations to the program and what coursework is involved?

What forms of payment do you accept?

What debts are not allowed through your program?

Are there any specific creditors that you do not work with and what can we do about those creditors that you don't work with?

You may want to find out what they have to offer as far as programs go. Many agencies offer more than just counseling. They can offer anything from specific budgeting programs and classes, as well as, pre and post bankruptcy counseling. Some also offer Housing Counseling.

Be weary of agencies that are eager to sign you up before you have had a good consultation with them and have provided them with all of your financial information. In some cases a debt management plan may not be the right choice for you. Some companies may just want to set you up with them so they can collect monthly fees from you. It is important to find an agency that is in the business of helping you out and not themselves.

Take your time and you should find a company that is willing to help you out and help you recover from your financial strains.

Budget Boosters

March is a great time to plan for a summer vacation. There are plenty of tips out there that can help save you a lot of money down the road. It all starts with effective planning. That means researching the best time to take your vacation. You want to make sure that the place you visit does not have any major events going on. This will prevent you from having to pay higher rates for lodging, gas, and even elevated prices at restaurants and grocery stores.

You may even have to change your destination plans to accommodate your availability. In some cases, it may be easier to change where you are going over what days you can take off for vacation.

While you research places to go, look for activities that have little to no costs. Many places have free family attractions that are fun and can even teach you a little about the area.

Once you have chosen your destination, you will want to start to book any reservations. You may plan to stay in a motel or campground and will want to make sure that you have a room when you get there. There is nothing worse than pulling into an unfamiliar town without any reservations trying to find a place to bed down. Be prepared to give a credit card number and a deposit to secure your spot.

By finding out where your destination is you can scout what attractions you will want to visit while you are there. Search online for coupons or special deals for members.

Make sure you visit the AAA website. If you are a member there are many great deals for traveling. Even if you are not a member of AAA they can answer plenty of your questions and give you saving ideas.

Many resort destination vacations are all inclusive. This is where you pay for most of your costs up front and then all the amenities are free to use. This can also include food and drinks. The resorts also feature many activities and shows so there is little reason to leave. By shopping around you can find great deals and have your vacation paid for up front and not have to worry about over spending during your time off.

When you actually go on vacation use cash and only cash. That way you have a set amount that you have already budgeted. Here's the catch. Cash can be uncomfortable and dangerous to carry around, so you will want to get traveler's checks. They work the same because they are a predetermined amount but they are safe from theft.

By preparing ahead of time and planning out your entire trip you can prevent yourself from having to use credit cards or more money than you budgeted. Some of the fun about vacations is being spontaneous. Set aside some extra money to use for some activities that you did not originally plan for

Penny Pinchers Club

Are you the type of person that comes up with terrific ways to Pinch Pennies? If so please email us and share your ideas.

Here is our Penny Pincher for this month

The first place we stop when we pull into a new town is the Chamber of Commerce. They have valuable information and can give you a map and directions to affordable places. We use the map to locate a nice park and enjoy a lunch that we packed before we left on the trip. It's one less time we have to spend money in a spendy restaurant.

-B. Burnoose, SD

A Mortgage for less than perfect credit

Preparing to purchase a home and your credit is “less- than- perfect” or do you have financial documentation challenges proving income?

Q: How do I buy a home if I have “less-than-perfect” credit?

Perhaps you are one of the many who have faced difficulty in your life and as a result of either poor credit decisions or a catastrophic event, your credit isn't what you want it to be. Whether it is a result of job loss, divorce, or you have had a debilitating injury, your credit may have suffered and you may feel that you are unable to reach the American dream of homeownership. Fortunately, there are home mortgage loan programs available that can help you achieve your dreams. Nothing improves your credit faster than a good payment history on a mortgage.

These home mortgage loan programs available offer solutions for people with less-than-perfect credit or for those who have not yet established credit. For example, you may have a solid job history but little credit history. Many companies provide a wide range of home financing available to customers who do not qualify for traditional mortgage loans - with up to 100% financing available for qualified borrowers. When qualifying for these mortgages loan types, it is important that you find a lender who has your best interest in mind.

Questions to consider when applying for these loan types?

Is there a prepayment penalty and is it my choice?

If I have an adjustable rate mortgage, when will it adjust and what will be the effects?

How my interest rate is determined - is it up to the lender or is there a system in place to control?

How do I make sure I get the best rate possible?

What are the fees associated with the loan?

How do I qualify for this loan type?

Is an FHA loan an option?

Most importantly, has the lender discussed a plan to help you qualify for other loan options for future reference?

Every customer who has a mortgage should be offered the following in order to help achieve financial security:

1. Education - Mortgage companies should provide modules on establishing credit, budgeting, and another topic online or in printed curricula.

2. Tools - Customers should have access to their credit report in an easy-to-read, user-friendly format to help them monitor their progress and to understand all aspects of their credit profile.

3. Banking Products - Customers can possibly have access to a portfolio of banking products including checking, savings and bill pay -that will encourage automatic money management.

Research has shown that owning a home improves the stability of American families. Often times it is the single largest asset of most American families. Research shows that the average net worth of renters with an annual income of $16,000 - $29,999 is $4,240 where as the average net worth of homeowners is $112,6002. Those with an annual income of $30,000 - $49,999 the net worth of renters is $10,600 and net worth of homeowners is $126,5002.Having this type of a mortgage can help you achieve your dreams and assists you in re-establishing your credit to help you on the path to financial security.

This information is accurate as of date of printing and is subject to change without notice. 2. Source: VIP Forum, Federal Reserve Board.

scholarship scams

Buyer Beware

When you have children heading off to college it is important to explore your options with scholarships and financial aid. But, like most things in life there are people who are out there to try and take advantage of individuals. It is important to be aware of such scams and to avoid them to protect your credit and your sanity.

The number one red flag would be any scholarship that asks for a credit card or bank account number to secure or hold the scholarship. Never give this information out.

Avoid any scholarship that claims that they will do all the work for you, or that it is as easy as signing your name. Scholarships take some effort and require more than the minimum information. It would be hard to believe any scholarship would be valid without you filling out the information and signing on it.

There are also services that will help find scholarships for you and will give you access to exclusive scholarships and grants by signing up with them for a fee. Scholarship information is information that you can find yourself for free. You do not need to pay anyone for his or her services. If you feel that applying for scholarship applications is intimidating you can ask to speak with a counselor at school, or even a teacher who may be able to assist you.

If you receive a letter that says that you are a finalist for a scholarship that you never applied for, you may want to research it more. More than likely it is junk mail and they are trying to get you to sign up for stuff. However, there are some scholarships that a family member may have recommended you for. Research them to find out if they are a reputable company. If there is a phone number, call it for more information. At the first sign of them trying to sell you something or asking for your banking information, politely end the conversation.

You will want to stay away from any company that claims that the scholarship is “guaranteed or your money back.” No one can guarantee that they will get you a legitimate scholarship. Scholarships are available to anyone that fits the specific qualifications.

A good source for scholarships would be at the college that you are planning on attending. You can contact the school with any questions about a specific scholarship. They may have a list of current potential scams that they can warn you about. You will also find scholarships that are only specific for that particular school.

Scholarships are not the only way that con artists take advantage of students and their parents. There are many student loan companies that will take advantage of you. Many will draw you in with the promise of low interest rates. They may ask for a processing fee in order to lock in the “incredibly low one-time” interest rate. Do your research before working with any company.

If you are unsure if it is a scam or not there are a few steps that you can take to find out. You can take all the suspect information to your guidance counselor and they can assist you with finding out if it's legitimate.

You can also look up a company through the Better Business Bureau. If they do not show up on their list, then you may want to avoid it. If they are on the list read their reviews of the companies business practices. If you have been taken advantage of or believe you are a victim of fraud then you may want to contact your State Attorney General's Office to file a complaint.

Resources:

www.bbb.org - website for the Better Business Bureau
www.scholarships.com - website where you can find free access to scholarships.
www.finaid.org/scholarships/ - website that has tips and information on filling out scholarships. Also includes a list of scholarships.

Questions & Answers

Q: What is COBRA?

A: Cobra provides former employees retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates. This coverage, however, is only available when coverage is lost due to certain specific events.

Next month we will go more in-depth with a feature article about CORBA coverage. We will detail who qualifies for it, how you go about qualifying, and the stipulations that come with it.

My Financial
Journal

It really seems that some of this month's articles would have been a better fit for October horror stories. Just about every article warns you about people who want to take advantage of you. It's kind of discouraging but it is the truth and hopefully, we can help some people out there avoid falling into this trap. I will try and have a couple of uplifting stories for you next month.

March marks the first anniversary of my wife and I bought our own house. There are plenty of lessons that I have learned in my first year.

It costs a lot of money to keep your grass green. With a mild summer with little rain, we tried our hardest to keep our yard healthy and could barely keep up with high water bills. Finally, towards the end of summer, it was inevitable that my yard would not look like the 18th green at Augusta.

As a matter of fact, I never realized how much water you can use to run a standard household. Between the dishwasher, bath/shower, washing machine, and the lawn the water bill can skyrocket. We are trying to only do full loads of clothes and dishes. I also heard that you could save by washing and rinsing your clothes in cold water. The one place we have to improve on is late-night laundry. There is always one more load we try and squeeze in before bed. The thing is we usually forget about the wash load until at least the next night. Nothing's worse than the smell of stale, wet clothes sitting in the washer. Lots of wasted water when you have to do it twice.

There are plenty of home improvement projects that I would like to get done. Each one costs money, so it is important to prioritize according to cost and necessity. For example, the thing I want most is a privacy fence, but it costs the most money and it is not as important as staining and protecting my deck. So the deck project comes first.

The best way to save for these projects is to set up a savings plan and put a little away each month. Set a target date to save up. You can even divide that money up between separate projects. There are some projects that may require you to dip into your emergency savings. These would include anything to protect your home like a roof leak or broken window for example.

I am not a handy man. Our washing machine's drum quit spinning. I went online to see what might be the problem and to see if I could do it myself. With very little research I decided to unplug all the cords and hoses, pull it out and start removing all the screws. Halfway through I began to wonder why this was becoming so difficult. I finally got it off only to realize that I had no idea what I was looking at so I obviously could not detect what was wrong. I ended up calling a family friend who referred me to an appliance repairman.

Long story short, we got our washing machine working again and it cost around $100. He charged the minimum fee, plus $12.95 for the part, plus the extra 45 minutes it took him to put the washer back together before he could even work on it. Oops. I could have saved myself about $40 if I would have just called him in the first place. Initially, I thought that I would be saving myself a lot of money if I could do it myself, but I have no business trying to fix appliances. I am pretty sure that our repairman doesn't write financial articles in his free time, so I am going to retire from the repair business.

No matter what, I still love being a homeowner and everything that comes with it. Until next month, good luck and have fun.

Beware of Predatory Mortgage Lenders

There are hundreds of mortgage companies out there that are begging to show you the miraculous deals that they have waiting just for you. Unfortunately, these offers are generally too good to be true.

You may have had trouble working with some mortgage companies and you may think that you do not have many options available to you. As the previous article on page 3 mentioned, there are many legitimate choices still available to you. Before you sign on the dotted line look for some of these warning signs that many predatory lending groups employ.

They may offer to use their own appraiser. This appraiser may have an incentive to appraise the house higher than its actual value. It is always helpful to have a suggestion, but it is a good idea for you to hire your own appraiser from a source that you trust. If your house is the same size and build as other homes in the neighborhood then it should be in the same price range. Appraisals should include some prices of surrounding homes in your neighborhood.

You may come across a lender who is very eager to assist you. They may promise you that they can get you a better deal if you are willing to “adjust” your income. They may ask you to give false information when you fill out your application forms. You should never lie about your income or assets.

Some lenders may also encourage you to apply for a loan that exceeds what you can comfortably afford. You should know beforehand how much you could afford on a monthly mortgage payment. Just because they can get you approved for a higher loan doesn’t mean that you should take advantage of it.

Another practice of predatory lenders is to nickel and dime you with fees. Some fees that they charge are non-existent and they are just hoping that you don't pay attention to the forms. We have all been told to read everything before we sign anything. If you see a charge that you don't understand, have them explain it to you. If you still don't understand it or think that it is suspicious, hold off on signing anything. If there are charges for services that you did not receive make sure that you bring it to their attention and ask that they be removed.

Some lenders will even charge higher rates to people based on their national origin and/or race. This type of discrimination can happen too often and is hard to prove.

You don't want to sign any forms that are blank or have blank areas in them that could be filled in later with different information. Some lenders may even tell you that you do not need any copies of the forms you are signing. You need to ask in advance that you receive copies of all papers that you sign. Another warning sign is if you notice that some of the conditions have changed since you first discussed the arrangements.

It is easy for predatory lenders to intimidate you. They may intentionally speak in terms that you may not understand so they can convince you that everything is OK. The same goes for forms you may not understand. Make sure they explain them to you and don't use the excuse “You don't need to read that, it's just a bunch of legal jargon.”

If you look for some of these warning signs you can avoid falling prey to a bad mortgage lender. Buying a home is the American dream and should be something that makes you happy for a long time. When you are taken advantage of it can turn into a nightmare that lasts a very long time.

Resources:
www.bbb.org - Website for the Better Business Bureau, where you can search for the lenders by name to find how well they treat their clients.

www.ftc.gov - Website for the Federal Trade Commission, where they feature all of the latest news on potential scams that may harm consumers.

Teen Times

Prom

Prom is just around the corner. Make sure you start your planning now. You can take advantage of many early sales by shopping for your formal wear now.

Start calling ahead to make any dinner reservations so you can beat the rush of the busy night. Don’t go for the expensive limo unless you have a group of people who agree to share the costs.

Save money by avoiding the salon and having a friend or family member do your hair and nails.