Madam Money's Q & A: Will Rent Reference Help Mortgage Application

Have you (or someone you know) ever wondered if a reference letter from a landlord would help with showing payment history for a mortgage application? 

Great Question!  Here the answer ... 



Do you have a personal finance or credit questions?  

Ask me and get answers! 

Just email your question to Tarra@TarraJackson.com. 

Making Money Matters Manageable, 

Tarra Jackson

5 Car Buying Tips for Women

Do you (or someone you know) want to avoid paying more than you have to when buying a car? I do!

If you are in the market for a new car now or in the near future, here are 5 Car Buying Tips to help save money when shopping for your next car.

   

KNOW YOUR BUDGET

The first and most important tip is to know "How much you can afford!" Do NOT let a car dealer's finance department or bank tell you how much you can afford.  Both essentially want to ensure that you borrow as much as possible so they can make more money off of you. The more they can make you believe that you can afford, the more the car dealership will make on the car and the more loan interest income the bank will earn on your loan.

   

GET PRE-QUALIFIED

The best way to avoid unpleasant surprises; like, not qualifying for the amount wanted, needing a cosigner or getting a ridiculously high interest rate, is to get Pre-Qualified or Pre-Approved for an auto loan. Go to your bank or credit union to apply for the auto loan. Tell them the payment amount you can afford to pay so they can determine the total loan amount based on the interest rate and term you qualify for based on your credit. Remember, the Higher your Credit Score, the Lower your interest rate and the More loan amount you will qualify for.  Adversely, the Lower your Credit Score, the Higher your interest rate and the Less loan amount you may qualify for or a down payment will be required.

    

RESEARCH BEFORE YOU CAR SHOP

Now it's time to have some fun going online to search for a vehicle in your price range. Dealers with No Haggle Deals are really good because they usually sell their vehicles below NADA or KBB value.  Next go to NADA or KBB website to find out and print the Trade In and Retail Values to take when you go shopping.

    

TAKE A MAN WITH YOU

Take your husband, boyfriend, father, brother, uncle, male coworker or that dude from down the street. Even if he knows nothing about cars or negotiating, take a man with you when you go car shopping. If the sales person begins speaking directly to the man, play along and coach your escort in what to say or not say. You are in control of the transaction; he is just the figure head.  Unfortunately, women are sometimes taken advantage of during the car sales process.

     

NEGOTIATE BEFORE THE TEST DRIVE

Sometimes we absolutely lose our mind after we get intoxicated by that "New Car" smell during the test drive. My advice is to negotiate before you test drive to have a clear mind during the negotiation process.

    

Here are a few things to do when you get to the car dealer: 

1. Tell the sales person that you are doing a cash purchase. (Because you have already been pre-approved!) 
2. Do NOT give your personal information or allow them to run your credit. (Again, you are already pre-approved.) 
3. Tell the sales person what type of car and the price you are looking for. 
4. Ask if the car has any rebates or if the dealership has any incentives. 
5. Ask to see the buyers order with options to see the breakdown of all expenses and fees to help you with negotiating. 

Use your NADA or KBB value to negotiate the price as close to the Trade In value as possible. Negotiating the price as close to the Trade In value will give you equity in your car, as well as help you when you decide to trade in the car later.

     

You may not be able to get the car of your dreams today, but by getting a reasonably priced vehicle within your budget, you will be able to save money and get that dream car in your near future. Happy Shopping!

   

Financially True,

   

Tarra Jackson, Making Money Matters Manageable

Exit Strategies: How to Leave Financially Abusive Relationships

Have you (or someone you know) ever been caught up in a financially abusive relationship and desperately needed an exit strategy? I have.

   

There are many consumers that are in financially abusive relationships with financial institutions that seem to be “not that into” them. They are dealing with ridiculously high loan interest rates, very low deposit rates, too many and extremely high fees, as well as poor customer service.

   

Being in a financially abusive relationship not only angered ME, but it made me feel weak and hopeless because I didn’t know how or if I could escape.  Then one day … I did!  So, here are a few effective Exit Strategies for getting out of a Financially Abusive Relationship.

   

Talk About It

There may be an opportunity of improving the situation by talking with the right person at the financial institution. So, before deciding to break up with the financial institution …

 

Be sure to

1. Share concerns with a Customer Service Representative,
2. Speak with a Branch or Department Manager about concerns for resolution, or
3. Write a letter to the Senior or Executive manager about concerns.

If efforts to resolve the matter are not addressed appropriately or ignored, move to the next strategy.

   

Start Financial Dating

Begin the process of financially dating other financial institutions to find one (or two) that can meet, at least, most of the required financial needs (deposit accounts, loans, internet banking, etc.). In my book Financial Fornication, I share the 5 phases of Financial Dating to avoid financially abusive relationships. These phases should not be skipped.  It is necessary and worth taking the time to get to know financial institutions to ensure they are right for a particular financial situation.

    

So, be sure to

1. Explore financial options (banks vs. credit unions).
2. Investigate the financial institution(s) selected via the internet or word of mouth (research).
3. Experience the Introduction by going to the branch(es) or calling customer service to ask questions.
4. Start slow Courting by using one or two of their financial services (open a savings or checking account), when ready!
5. After all 4 phases have been executed, Commit to the new primary financial institution (PFI) by using more of their products and services. 

   

Once a new financial “main squeeze” is found, it will make it easier to leave an existing financially abusive relationship.

  

Exit Slowly & Deliberately

Whether a new financial “main squeeze” is on standby or not, another Exit Strategy is to slowly stop using the financial institution’s products and services.

  

Be sure to

1. Review bank statements carefully to identify all direct deposit or automatic payments coming out of the accounts.
2. Stop or change automatic payments from the account(s) and update payment information with the new financial account information, if available.
3. Ensure that all accounts are in good standing or current. This will ensure a clean break. The last thing wanted is a reason for the abusive financial institution to remain in contact.
4. If possible or necessary, refinance loans to the new financial “main squeeze.” If this is not possible, keep this in mind … having loans with a financial institution is like having a child(ren) with an estranged spouse or mate.  Leaving the relationship does not diminish the responsibility of the child(ren). Therefore, leaving the financial institutions does not diminish the legal responsibility of the credit obligation.  If refinancing is not an option, continue to make loan payments to the financial institution on time until it is paid in full to avoid collection and credit report drama.
5. Lastly, stop or reduce direct deposit into the account.

 

Once these steps are executed, a clean breakis relatively available.

  

Even though the financial relationship may seem extremely challenging right now, just know that all financial institutions are not alike. There are lots of really good financial institutions out there that value and appreciate their customers.  Once you find them, some of them even provide an easier method of transiting automatic payments and direct deposits to them through what is called Switch Kits.

  

So don’t give up. There is hope. And most importantly, you deserve better!

    

Financially True,

 

Tarra Jackson, Making Money Sexy!

5 Things Asked on a Loan Application Used by Collectors

Have you (or someone you know) ever wonder why certain information is requested on a loan application that may not have anything to do with making the loan decision? I have.

  

When applying for credit, the loan application is not only a tool to acquire necessary information for the lender to make a judgmental credit decision. It is also a source of valuable data that is used to help collectors collect money that is owed to the lender if the borrower does not make their payments on time or at all.

 

Here are 5 Things Asked on a Loan Application Used by Collectors.

 

CURRENT & PREVIOUS ADDRESSES

The current address is not only used to request the applicant’s credit report, but it is also used to mail payment reminder or collections letters and, when necessary, for Skip Tracing.  Skip Tracing is a process of acquiring as much information about a person to find out where they are. Once the person is located, the collector can proceed with collection efforts or take further legal action.  Some skip tracing tools used are credit reports, white pages, a system called “Accurint,” social media, and especially Google.

  

EMPLOYER INFORMATION

The name and address of the applicant’s employer is sometimes used to have the borrower served if the lender chooses to sue the borrower by filing for a default judgment. However, this information is mainly used to file for wage garnishment.

 

PHONE NUMBERS

Home, work and cell phone numbers are used by collectors, of course, to call borrowers to discuss missed or past due loan payments and to acquire, what is called a “Promise To Pay.”  A Promise To Pay, is the borrower’s promise to make the agreed upon payment(s) to bring the loan account back to a current status.  Most collection calls may be friendly reminders. However, the more past due the loan becomes, the more “concerned” the collectors may be when calling.

  

EMAIL ADDRESSES

Most collectors are aware that many people may not answer unknown callers or callers that they do not want to speak to. They are also aware that many people may not read or ignore collection notices in the mail. This is why email addresses are very valuable.  In today’s electronic age, most people may respond faster to their emails than letters and voicemail messages.  This also gives the borrowers time to respond in a less intimidating manner.

  

REFERENCES

The names, addresses and phone numbers of the applicant’s family members and friends are usually requested in a loan application as references. This information is also used for Skip Tracing, when necessary.  Collectors may contact those references to obtain more information about the borrower and their whereabouts to continue collection efforts or further legal action.

  

  

Most first party collectors, which are usually employees of the lender, may be very open to assist borrowers that are dealing with financial hardships with payment plans. They are usually friendly and willing to assist as best as possible. So, please don’t ignore them.

 

Just make sure that you are aware of consumer rights regarding normal collection action, especially when dealing with third party collectors. No collector should verbally abuse or threaten you. That is against the law. The Fair Debt Collection Practices Act governs third party collectors, collection activity, as well as Consumer Rights.

 

Financially True,

   

Tarra Jackson, Making Money Sexy

  

What other application information is used by collectors?

5 Things I Wish I was taught "How To Be" when I was a Teenager (to be Financially Better Off)!

Do you, or someone you know, have things you wish someone taught you "how to be" when you were a teenager, to be financially better off?  I do!
  

“If I knew then what I know now.” This has got to be the theme song for most adults, especially when it comes to finances.  There are hundreds of things that I wish I was told, taught or nagged about when I was a teenager.  But, here are my top 5 Things I wish I was taught “how to be” when I was a teenager, to be financially better off.
 

I wish I was taught how to be …

  

A Boss!

No, not Bossy, but A Boss of my own business. Instead of being encouraged to go to school so I can get a good job, I wish I was told and taught to go to school to learn how to make jobs. Or to go get a job to learn what it takes to run a business. Seriously, we are told what to do and what not to do when we are children, only to go to school to get a job for other adults to tell us what to do and what not to do when we become adults.  Seems like a set up to me now.  
  

So teens … go to school and get a job, NOT to just be an employee, but to learn how to become an entrepreneur. Besides, there are not that many jobs out there right now anyway. Create your own business and Be A Boss!

  

A Giver

The first principle of Prosperity is Giving! In order to reap a harvest, a seed must be sown.  Always remember, there is no room to receive in a closed fist.  Whether your giving is spiritually, morally or emotionally based, give gladly and on good ground. Giving is not always about money. Sometimes your old clothes, knowledge, or time may be just as, if not more, valuable.
  

So teens … learn the power and pleasure of giving early to a church, non-profit or worthy organization or individual. You’ll be surprised of the blessings you will receive because of your openness to give.

  

A Saver

Who knew that if I had saved only $100 per month when I got my first job at the age of 14 in a savings account with an interest rate of 0.50% until now (25 years), I would have saved over $32,000? And if I had saved $200 per month, it would be almost $65,000.  The point is, if I really understood the power of saving at a younger age when I could afford it, I would be able to afford almost anything I wanted when I got older.
  

So teens … Start Saving Sooner!!! The younger you are when you start saving, the more you will have when you really need it when you get older. Trust me on this one.

  

Financially Proactive

Enjoy today but Live for Tomorrow!  Tomorrow is your future. Live like you are going to be alive for a long time and you want to be financially comfortable for the rest of your life. True story … If I had planned for the things that I wanted “tomorrow” (in the future); I would nothave borrowed money to get what I wanted “today” that I would have to be paid back “tomorrow” (in the future). Well, it’s tomorrow for me now and I’m still paying for what I borrowed “yesterday” (in the past).  My point is that using credit to get what you want right now will limit what you can afford tomorrow, when you really need it. It’s no fun not being able to afford to buy a home because you owe too much in credit card debt.  Credit is designed to be a leverage to help you acquire real “assets” (read Robert Kiyosaki’s book, Rich Dad Poor Dad) or to be an anchor and drown you deep in debt.
  

So teens … use credit wisely and do not use it until you are mature enough to handle its consequences (read my book, Financial Fornication).

 

Wealthy!

Not rich, but Wealthy! Rich is predicated on how much money you have, but Wealth is determined by how much you are able to do with the money you have. I’ve met hundreds of broke “rich” people, but I’ve never met a broke “wealthy” person.  Also, don’t believe the bling you see on TV! Nine times out of 10, the bling is borrowed! #IJS
 

So teens … follow my Financial Freedom Formula early and be wealthy for the rest of your life!

 

      

Those are my top 5 things I wish I was taught, but believe me there are more. Come to think of it, I was probably told to be a few of them, but I just didn't listen. Typical teenager.  ;-)

   

Best wishes on your journey to Financial Freedom!

   

Financially True,

   

Tarra Jackson, Making Money Sexy!

Top 5 Bad Financial Habits to Break

... Do you or someone you know have any bad financial habits? I do …
  

Most of us have one … or two … or several bad financial habits. From experience, my bad financial habits resulted in some very expensive mistakes. It’s ok! As long as bad financial habits are broken or at least controlled, they will have minimal effect on your financial success. The first step is identifying your bad financial habits.
  
Here are the top 5 bad financial habits to avoid that keep people from getting a positive grip on their finances.
 
Impulse shopping.  Impulse shopping happens unexpectedly sometimes. Think of shopping like alcohol. It should be done “responsibly” and can become addictive, if not careful. Make shopping a planned activity with a list or a budgeted amount.  Unplanned or impulse shopping may sabotage your spending plan / budget.  Also for large ticket items, give yourself 24 to 48 hours to shop for a better deal or to figure out if you really want it and can afford it. You’ll be glad you waited.
   
Retail therapy.  Retail therapy may help you to feel good for a moment but they buyer’s remorse is painful. When you are emotionally down, distraught or highly emotional, avoid shopping or making any large purchases.  The more emotional we are, the less financially objective we become.  Do something that doesn’t cost anything or very little, like go for a walk, spend time with family or friends, etc. Your bank account will thank you when you start to feel better.
  
Overdraft protection.  Overdraft or “Courtesy Pay” is so convenient! However, overdraft protection (a financial oxymoron in my opinion) is relatively designed to allow you to overspend. It allows or approved checks or charges to go through even when you do not have enough in your account for a Fee.  A fee of $27 up to $35 is charged to your account for every overdraft, even if the amount runs $1 or $5 over the amount you have in your account. Generally it is like a very short-term line of credit with a ridiculously high effective interest rate. Now was that cup of coffee really worth $40? Besides, we spend more when we use debit cards. Use cash instead.
  
Savings tampering.  Savings is money set aside for a specific purpose like emergency, down payment of a house or car, school, etc. Avoid using savings for something that is outside of its purpose. The best way to do this is to establish a savings account that is not easily accessible with a certain amount directly deposited every pay period. Savings accounts are supposed to grow, not be chiseled away. 
  
Financial promiscuity. Financial Promiscuity is when multiple credit cards are used for small purchases when cash should be used.  Avoid using credit to purchase that "value meal" or anything less than $50.  This will ensure that Financial STDs (Substantially Tremendous Debt) will not be slowly acquired.
  
By acknowledging our bad financial habits, we can focus on stopping and changing them. Some bad financial habits may be more challenging to quit than others, but it can be done.  Contact a financial coach to help with ideas and techniques of replacing bad financial habits with good financial habits to help you reach your financial goals faster.


Financially True, 
  

Tarra Jackson ... Making Money Sexy

Pay Day Loan Confession: I've fallen and I can't get up!

…have you (or someone you know) "fallen" into the Pay Day Loan bottomless pit of debt and feel like you can't "get up" out of it? I have.

When you’re in a bind and you need a few hundred bucks to bridge you over a few days until your next pay day, a pay day loan may look very appealing. In my opinion ... Pay Day Loans are like an addictive drug. The first experience may seem helpful and pleasurable but it eventually becomes something that you believe you can’t live without.  And just like a drug addiction, getting out of Pay Day Loan debt can be scary, daunting and financially painful. But … there is a cure for this Financial Dis-Ease. 

   

Let’s first discuss how Pay Day Loans causes Financial STDs (Substantially Tremendous Debt).  Ok … (true story) … a family member of mine needed $200 to pay the electric company to keep the lights on. A so-called friend referred them to a local pay day lender. The pay day lender charged $20 per $100 borrowed. The process was so pleasant and easy that they decided to borrow an extra $100 for a total of $300.  They paid their past due electric bill for $200 and had $100 for food and gas until their next pay day. On their next pay day, they made the fateful decision to renew the pay day loan. So, this time the loan was for $360 (to pay off the original loan amount of $300 loan and the $60 fee). The new fee was another $72, which totaled $432 for the new loan. My family member renewed this pay day loan at least 5 or more times and quickly began to sink into debt.

   

Getting “up” out of pay day loan debt is not as easy as falling “down” into it, but it is possible. Here are 3 tips to get out of Pay Day Loan Debt.

   

COLD TURKEY

   

If at all possible, the best method is to stop taking out pay day loans immediately and sacrifice for the pay period. This will reset your financial situation and give you your full pay check during your next pay check.  It is important to plan for this pay check deficiency. To help you through this financial deficiency,

• Ask your family members if they some money to spare or borrow,

• Contact your bank or credit union to see if you qualify for a payment deferment on your loan payment due to financial hardship,

• Cut out eating out during this pay period to save a few bucks, or

• Carpool with a co-worker or take public transportation to save on gas.

DEBT TREATMENT

   

Another option is to apply for a loan with a reasonable interest rate and short period of time (term) to pay off the pay day loan. So instead of having a pay a lump sum every month, you can paythe new loan off in more reasonable and smaller weekly, biweekly or monthly payments.  If you go this route, make sure you keep the term at 12 months or less and make sure that the interest rate does not exceed 18%. Some credit unions may offer loan programs designed to help people get out of pay day loan debt.  One of the advantages of getting a loan from credit unions is that they must comply with a “usury law,” which means that they cannot exceed a specific interest rate, usually 18%.  If you have a great relationship with your bank, ask them if they have a loan consolidation program that can assist you with refinancing your pay day loan.

   

  

TERMINATION

  

A last resort to get out of pay day loan debt may be bankruptcy. The two chapters available to file under for bankruptcy are Chapter 13 or Chapter 7.

   

Chapter 13 bankruptcy is considered “reorganization” and is appropriate if you have significant collateral that you want to keep like a home or vehicle. Chapter 13 establishes a payment plan up to 5 years to pay on your debt based on your financial capacity.  Once you have completed all of the payments ordered in the bankruptcy plan, the debt is considered “discharged” and the remaining debt is not collectible by the creditor.

   

Chapter 7 bankruptcy is considered “liquidation” and is appropriate if you have significant unsecured debt and minimum or no collateralize debt.  Chapter 7 liquidates or “terminates” qualified unsecured debt. Should you have collateralized debt, you can “reaffirm” with the bank and continue to make payments according to your credit agreement or you can “surrender” the collateral to the bank or trustee so it can be sold to pay on the debt to liquidate.

   

This option again should be a last resort consideration but can assist you in resetting your financial situation with a fresh start.  There are pros and cons to filing for bankruptcy so make sure that you consult with a knowledgeable and consumer focused bankruptcy attorney.  Click here to listen to my interview with Bankruptcy Trustee & Attorney, Angelyn Wright, Esq., as she talks about the “Truth About Bankruptcy.”

   

   

Sinking in Pay Day Loan debt can feel helpless and hopeless, but there is financial resurrection. The great thing is that you hold the power in stopping this type of financial abuse by making the decision to stop using pay day loans.  Make the decision today.

   

Of course, the best way to avoid "falling" into this bottomless pit of debt is to avoid using it at all costs. Seek alternative short term loans through your bank or credit union.

  

  

Financially True,

  

Tarra Jackson ... Making Money Sexy

   

  

P.S.  The 3 tips above is a start to help you get up from falling down into this type of debt, but there are other ways as well.  What are some other tips to "get up" from falling into pay day loan debt bottomless pit?

"It's what they DON'T report that HURTS!"

... Have you (or someone you know) noticed that there may be some accounts or positive information that is not reporting on your credit report that could help your credit score? Well, I have!

   

We may all be familiar with the fact that there might be incorrect information reporting on our credit reports that are hurting our credit scores with Equifax, Experian and TransUnion.  However, were you aware that there may be positive information that is not reporting on your credit reports that may help your score?

    

Here are TWO (2) things to consider if positive information is not reporting on your credit report.

   

#1: SOME LENDERS DON'T REPORT! 

   

That's Right!  The credit reporting system is voluntary!  Therefore, it is NOT required for financial institutions, buy here pay here organizations, or apartment rental organizations to report to credit reporting companies. Therefore, you may find that your positive payment histories may not be reporting to help increase your credit score.  Some organizations only report negative information; or they may only report to one or two of the credit reporting companies but not all three.

   

HELPFUL HINT:  Before you sign a credit agreement for a loan, ask the organization or financial institution if they report to all three credit reporting companies. 

   

#2: MIX UPS!

   

If you share the same name and may have shared the same address with someone, like a family member (parent/child), trades may be mixed up and reported on the wrong credit file.  Credit Reporting Companies use the Name and Address as the primary matching triggers.  The secondary triggers are date of birth and social security number.  Therefore, this is a common mix up with parents and children who share the same names.

   

HELPFUL HINT:  Include any name suffixes like Jr., Sr., III, etc., on all financial documents and credit applications and agreements. Also, check your credit reports regularly to make sure all information is correct for you.  If there is incorrect information reporting, dispute the information immediately with each credit reporting company, if necessary.

   

Click Here to schedule your FREE Consultation!

"Karen thought she needed to get second job. I told her NO!" - Here's why ...

... Have you (or someone you know) thought a second job would help solve your (or their) Cash Flow problems? Well, I have!

Karen, a single mother and successful corporate executive, made good money (over $80,000 a year). When Karen started her coaching sessions with me, she told me that she was thinking about getting a second part-time job to be able to pay all of her bills and build her savings.  I told her NO! I gave her several strategies that helped her save about $5,000 in a year.
  

Here are TWO (2) of the strategies that I coached her through.
  

CASH FLOW STRATEGY #1: EAT IN!!! 

  

Karen admitted that she hated to cook, so she and her son ate out frequently. She also bought her lunch everyday during the week. She spent an average of at least $30 per day. Instead of telling her to stop eating out cold turkey, I suggested that she eliminated eating out for one meal.  She would at least save $10 per day.  She decided that she was going to take her lunch to work.  

  

Karen saved $10 per day, $50 per week, which totaled $2,600 for the year.
   

CASH FLOW STRATEGY #2: STOP NAME DROPPING!!! 

  

Karen admitted that she was fixated on buying "Name Brands" when she went grocery shopping. So, Karen and I went grocery shopping as a Field Trip. When she picked out something that was "Name Brand," I picked a "Generic Brand" to compare ingredients and PRICE!  She realized that most of the Generic Brands had the same ingredients with LOWER PRICES. During this Field Trip, Karen saved almost $100 on her grocery bill and got more food (to make her lunches). Karen went grocery shopping twice a month. 

   

That's $200 savings per month, which totaled $2400 for the year.

  
   

In one year, Karen saved about $5,000 without getting a second job. Her part-time job became making her lunches and implementing the strategies she learned during our coaching sessions. 

   

This allowed her to spend more time with her son!

  

Lesson:  It's the little changes that make a BIG difference!
   
   

Click Here to schedule your FREE Consultation!

Teaching Money and Credit Management - Whose Responsibility is it anyway?

In the United States, our school system requires all children to take and pass Reading, Writing, Arithmetic (I hated Geometry), a foreign language, Social Studies, Science, and in some schools they still require Physical Education.  However, it still baffles my mind that Money and Credit Management Education is NOT required. 

There may chapters that teach the denominations and how to count currency in elementary; as well as a little bit of finance education in high school.  And yes, there may be a financial management class offered in college as an elective.   Huh?  An Elective?   Yes, I use Reading and Writing every day of my life.  The other required courses … maybe on occasions or for fun, but I deal with MONEY EVERYDAY OF MY LIFE.  As a matter of fact, I dealt with money before I could read or write when my grandfather gave me a dollar bill when I was 2 or 3.

So, the question of the day is… Who is responsible to teach a child how to manage money, to leverage its potential wealth building power and to avoid ending up in tremendous debt and bad credit?

…I hear someone in the audience yell… The Parents!  OKAY…  And who taught the Parents?   

Many parents don’t teach their children about how to manage money because they either assume that the schools are doing it or because they don’t know or weren't taught themselves.  They may have “Colorful Credit” and could be drowning in debt.  They probably were never taught how to balance a checkbook properly.  “Checkbook?  Who uses checks nowadays?  We have debit cards.”  HINT: you still must balance your account when using your debit card. 

So, the second question of the day is…If the Parents don’t or can’t teach their children how to manage money & credit, who is now responsible to teach the child?

…I hear someone else in the audience screaming, “The Church!”  The Church is its people.  Most of those people have not been taught and are seeking financial counsel.

I do believe that Financial Institutions, such as banks and credit unions, are the most qualified to teach the world how to manage money.  Makes cents (sense) right?  “Herein lies the rub…”

LACK OF RESOURCES TO EDUCATE THE MASSES

IF the financial institutions teaches money management to the communities it serves, it may not have the resources to share the information to every consumer that needs and wants it.  Some financial institutions, do share money matters information to communities, organizations and schools, when they can get in there; but that is a small drop in a large bowl.  BUT…it’s a start!

CAN’T TEACH THE UNWILLING

You can only teach a person that wants to learn.  There are thousands of resources online, in the communities, independent professionals, etc. that provide some form of Financial Education.  However, reality check… the target audience may be set in their ways and probably afraid or unwilling to make necessary changes or sacrifices to help their financial situation.  Money & Credit Management should be taught before bad habits are formed. 

  

IT JUST DOESN’T PAY!

Here is the Oxymoron Answer to this million dollar questions (Pun intended):  It is frankly not advantageous for financial institutions to educate consumers on money management.  Consumer ignorance is a multi-million dollar business. Financial Institutions make money off of financial ignorance, poor money management, and financial irresponsibility of consumers.  Those consumers should take a close look at their monthly bank statements or check out the interest rate on their loan.  The less educated/informed and disciplined a consumer is with their money, the more money they will pay in fees and interest.  Simple math. So… if that is the case, is it really advantageous for financial institutions to have a massive Financial Literacy Campaign for the world?   

I believe that  1) it is the responsibility of the schools to provide the information as a core class from Elementary through Higher Education, 2) it is the responsibility of the Parents to reinforce the information by modeling the behavior of proper financial management for the child and instilling discipline, and 3) it is the responsibility of the Financial Institutions to provide the Financial Educational resources for the Parents to learn more and continue to be informed and fiscally responsible consumers.

Call me a Dreamer or Optimist!  I believe that Financial Knowledge is power. And … Hopefully one day the US Board of Education will understand the significance of and require Money and Credit Management Education as a curriculum in all schools.  Until then…Private Schools / Charter Schools…here is your opportunity to including Money and Credit Management Education to your curricula. (I'm Just Saying!)

For more information about money and credit management curriculum for your school, contact Madam Money at info@tarrajackson.com.

  

(c) 2010 Tarra Jackson Enterprises