EDITORIAL: Does God Want America To Bail Out the Big Three?

Of all the states that are struggling as a result of the U.S. economic crisis, we know that Michigan is being hit the hardest. Our state economy is so dependent upon the automotive industry that the collapse of any of the “Big Three” automakers could mean the difference between prosperity and poverty for thousands of families. This would put a heavy burden on government to increase state-funded assistance, which would increase taxes and further penalize non-automotive workers and professionals who are already enduring hard economic times. So, it’s safe to say that many Michiganders of faith have been praying for a miracle.

One church took that to the next level.

You may have seen Bishop Charles H. Ellis III, pastor of Greater Grace Temple of the Apostolic Faith in Detroit, Michigan on FOX News earlier this month. Bishop Ellis gained national attention by holding a prayer service for the Big Three with three hybrid SUV's on the altar (yes, the sanctuary at Greater Grace Temple is that big). The three sport utility vehicles were actually parked on the altar as ministers prayed for Congress to bail out Ford, Chrysler, and General Motors. Bishop Ellis appeared on FOX News to share with the nation his rationale and perspective as a clergyman concerning the will of God in Michigan’s economic turmoil.



If this is the first time you have heard this story, I’m sure you are a bit shocked and possibly even conflicted about the question of appropriateness or rightness of such an event. Before I saw this story, I already had conflicting feelings about whether or not the Big Three should be bailed out by American tax dollars. While it would help keep friends and family from going under, it goes against everything I believe politically. After the story first aired on local news here, my stomach really started turning.

You see, until I got married and moved 150 miles west of Detroit in 2004, Bishop Ellis was my pastor.

Bishop Ellis married my husband and I, and we received our marriage counseling from him. I was an active member at Greater Grace when I was attending the church, and spoke to my pastor on a regular basis. It’s pretty safe to say that I know this man about as well as a layperson can know their leader. So, being respectful of his spiritual office and my knowledge of who he is as an individual, I had to take a long, hard look at whether or not the hand of God was at work against my conservative values, which, ironically enough, are rooted in Christian faith. My politics are different than that of my former bishop, but we are of the same faith; we love and serve the same God. Yet, my convictions leaned right while his leaned left. I had to ask myself a very serious question:

Does God want America to bail out the Big Three?

While you may not be a Christian, I think that we can find our answer in the video clip of Bishop Ellis’ interview. He basically conveyed that it is his job to represent the interests of the people before God. I know that it is also his job to convey the interests of God before the people. Godly logic says that while the Lord’s perfect will would involve everyone taking full responsibility for their own actions and suffering the consequences nobly, the mercy of God dictates that the level of suffering must be bearable in order to be effective. Michigan is being chastised, but it does not appear that God wants us to be destroyed. Grace would not be grace if it were deserved. While Republicans like myself can argue that the automakers deserve to go bankrupt, maybe God is giving Michigan ‘greater grace’ than what politics would call for.

Maybe God heard his people saying, “Lord, have mercy”, and he decided to grant their request.

As it stands now, it appears to be inevitable that General Motors and Chrysler will receive most of the funds that they are requesting. George Bush needs some brownie points before he leaves office, and it looks like this is going to be the issue he tries to use to get them. Politics as usual. However, no matter how you slice it and what you may or may not believe, I can say one thing for sure:

Apparently, my God really does answer prayer.

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How Lack of Car Insurance Can Lead to A Repo

If you watch TV or surf the internet at all, chances are you have seen one of the many commercials aimed at convincing consumers to compare rates for their car insurance. Everyone says that they have the best coverage for the best price, but some companies even offer rate comparisons at their expense to help you make the right decision. All of the geckos and Jackie-O-esque spokespersons can make one shy away from actually getting the quotes because of the constant bombardment of advertising. But what if the big corporations have a point?

My husband discovered a while back that maybe all of that pushing is actually a push in the right direction. He learned the hard way that not having affordable auto insurance can ultimately lead to getting your car repossessed. It sounds like a stretch, but it really happens, as it happened to my husband Lee once upon a time.

The story goes like this: Lee was performing a juggling act with his debts, and soon realized that he simply had more expenses than he had income. The automobile insurance he had on his SUV was too high for him to keep up with, so he let it lapse. His intentions were to catch up as soon as he could and stay off the road as much as possible until the situation was cleared up. Unfortunately, he didn’t get the opportunity to put his plan to the test. Midwestern-based ALF Insurance had a different plan in mind.

The insurance company reported to Lee's credit union that he was uninsured.

In a surprising but completely legal move, ALF Insurance gave LSI Credit Union the heads up on how Lee's insurance had lapsed, which took things from bad to worse. We all know that if a lending institution holding a lien finds that the borrower does not have proper insurance, they can slap their own expensive insurance plan on them without warning. LSI Credit Union did just that, and told Lee that if he didn’t want their sky high rates he should find his own insurance. Needless to say, that was easier said than done, not because the geckos and 60s receptionists weren’t there waiting with a quote, but because he couldn't afford what he had before, much less the new payment. Now the newly imposed car insurance was attached to Lee’s car note, which put the vehicle in jeopardy. He couldn’t manage to get a new policy and pay for the one that was now attached to his car loan. After months of struggling to make the new, inflated note, he had to submit to a voluntary repossession of his truck.

As a married guy with a pretty smart wife (if I must say so myself), Lee has grown from the experience and does a different juggling act these days. Instead of juggling debts, he is a bargain shopper, always with an ear to the ground on the best deals in commodities, food, retail items, and insurance, making 'the switch' whenever it is advantageous to do so. Considering the circus that is our current American marketplace, it's an act that's a lot more fun to watch.

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Even When You Have Outstanding Debts, You Still Have Rights

These days, it’s commonplace to swap telemarketer horror stories with friends and family; it’s as American as apple pie. However, wild bill collector stories are also becoming increasingly popular. With the average American carrying an average of $2500 in unsecured debt plus mortgages, many of us know the dread of receiving unpleasant calls from creditors, although we’re less willing to tell the tales.

An old friend of mine named Wes is one of the great storytellers - he has spent the last 5 or 6 years climbing out of debt. So, he has collected some war stories along the way. One creditor told him that he wasn’t a real man if he didn’t pay his bills, and another asked him whether or not he truly cared about his family. One debt collector actually called my friend 2-3 times a day, every single day, including Sundays, for months. These relentless predators had no idea what his situation was, nor did they care; they were simply looking for the right button to press to get them what they wanted. However, as bad as these instances were, they weren’t the worst of the worst. There was one case that topped them all.

One creditor showed up at Wes’ doorstep.

Unannounced, with no attempts to contact him by phone, an employee from a payday loan establishment knocked on the door, looking to collect. Ironically enough, Wes didn’t owe a lot of money, and he had only missed one payment. Apparently that was enough to send someone out on a bounty hunting expedition. As soon as Wes opened the door, the woman began talking a mile a minute about his commitment, how he hadn't been in to pay, and how she had come to pick up the money. The woman didn't even identify herself - she just started talking. Wes had to interrupt her just to find out who she was. Needless to say, my friend was highly offended, and told the collector that she had to leave his property and not come back. I couldn't believe that a guy who was doing everything he could to settle his debts in a timely manner (even when it meant occasionally robbing Peter to pay Paul) would have to be subjected to such treatment, as if he were evading repayment.

This kind of harassment should be illegal!

The good news is that it is. However, when consumers don’t know that they have rights, they surrender them. The following video explains how to respond when a debt collector has gone too far:



The Fair Debt Collection Practices Act is designed to protect consumers against harassment, false claims, and fraud. You have the right to demand that creditors stop calling your home, to dispute the debt, and to receive, in writing, all the details concerning the debt owed. You also have the right to be treated respectfully and not harassed by debt collectors. Furthermore, if your consumer rights are violated by a creditor, you even have the right to sue them! The FTC says,

“You have the right to sue a collector in a state or federal court within one year from the date the law was violated. If you win, you may recover money for the damages you suffered plus an additional amount up to $1,000. Court costs and attorney' s fees also can be recovered.”

Ironically enough, if you won your claim, you’d probably have to turn right back around and hand it over to the guys you just sued.

Ouch…

But at the end of the day, your dignity and privacy are worth fighting for, even if you only break even.

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EDITORIAL: Why I Am Not Voting For Barack Obama

I am a rare and endangered species in America - I am Black, and I am not voting for Obama.

The racial undertones of this 2008 Presidential Election cannot be ignored…well, not by persons like myself. Although most Americans have done everything they can to stay away from the racial issues, the fact of the matter is that most Black people in America are voting for Obama simply because he is Black. As long as he doesn’t admit to worshipping the devil or being a serial killer, they will support his candidacy as the fulfillment of the dream that fostered the Civil Rights Movement and every struggle for justice that Black Americans have endured in this country. I get it; really, I do. I would hope that non-Black Americans are at least able to sympathize with that position, considering the circumstances. Such a unilateral and uncontested, even blind support of a candidate is charged almost purely by emotion, but in this case it is at least emotionally justifiable.

Nevertheless, I wouldn’t vote for Barack Obama if you paid me to, which ironically enough, is exactly what he is doing.

Barack Obama’s economic policies often offend me. He has re-branded all out socialism as “Change” and “Hope”, or as MadTV so eloquently put it, “Chope”.



Among Obama's flawed economic policies are a “Windfall Profits Tax”, a “tax on excessive oil company profits to give American families an immediate $1,000 emergency energy rebate”, an indexed minimum wage increase that automatically rises with inflation, and a federal ban on the permanent replacement of striking workers. If you have a one-sided view of the economy, this sounds great; more money in your inelastic pocket. However, these kinds of anti-capitalist policies would actually contribute to the destruction of the balance that makes our economy strong in the best of times because it unfairly assures the underdog that he will never experience the worst of times. America cannot be the “Land of Opportunity” if those who take advantage of the opportunities are penalized as a result. Minimum-wage jobs are not designed to support families of 3 or more; that‘s what professional degrees, skilled trades, and even second jobs are for. Strikes are risky, and an employer has every right to fire employees who don’t show up for work, whether it makes him a cold-hearted miser or not. Unfair redistribution of wealth is socialism, pure and simple.

If you want to be a socialist, move to China.

On the other hand, while McCain is not as conservative as I would like, his economic policies are far more fair and balanced. For example, McCain's remedy for victims of the sub-prime mortgage lending bubble is to adjust their loans to reflect the current value of their homes as opposed to the former, inflated value. They still have to pay the debt they signed up for, but there is a compassionate act of good will on behalf of the government that demanded the banks begin lending to the sub-prime market in the first place. Instead of penalizing Americans who make over $250,000 a year (which is not rich, by the way), he wants to reduce prices on gas and food, which is fair to everyone. McCain also lists a number of economists who approve his economic plan on his website, which lends to it’s greater realistic soundness compared to Obama’s plan.

I enjoy my freedom too much to have my vote bought by someone who would rather see me live as a poor, minimum-wage earning worker for the rest of my life than help empower me to become a business owner who can afford to hire employees and make profits without being unfairly taxed. I can’t sell out to someone like that.

I don’t care if he’s Black or not.

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Losing Track of Student Loans Can Wreak Havoc On Your Personal Finances

While having a big family is a wonderful blessing in and of itself, it’s especially rewarding during tax season. Don’t get me wrong; I value my family infinitely more than a tax refund, but it feels good to know that my commitment to my marriage and children is recognized by our government when tax time rolls around. We had twins last year, so when my husband and I realized that we would get a Child Tax Credit for both of them, we thought that was pretty nice. After deductions, we expected a return in the thousands, so we were happy campers.

During that same time, however, we were dealing with a frustrating issue that did not put smiles on our faces at all. Somehow, when I consolidated my federal student loans, one of them was not included. I didn’t understand how it could have happened, considering how informed the consolidation company was. Loan consolidators do all of the hard work for you - they call you out of the blue, offering to make your life easier by combining your student loans with a great interest rate and anything else you need, including forbearances. As they are explaining everything to you at the speed of light, they list all of your outstanding loans and help you to understand why making one easy monthly payment would ease your anxieties about student loan debt. They’re right; it does. So, I agreed with them and consolidated my loans. They reviewed the information with me again, reading back the information on each smaller loan that would be merged together into the big loan. So, I thought everything was taken care of.

And then we found the one that got away.

Actually, the one that got away found us; once the creditor discovered I had moved and gotten married, they politely called to let me know that I owed them money for a small student loan. It took a while to figure out what happened, but when we did, my heart sank. I was so young and I took out so many small loans while I was in school that I hadn’t been keeping track of them properly. So, when the consolidators did not have their facts and figures right, I should have been able to correct them, but I wasn‘t. I ended up with a defaulted loan because it went unpaid and unnoticed for quite some time. As many young Americans know, having a student loan in default is guaranteed to bring a lot of unwanted phone calls, anxiety, and grief that we did not want. One artist was so encumbered by Sallie Mae that he wrote a song about it:



So, we did everything we had to do to bring that loan back to current status, although it didn't happen until around the time we filed our taxes for the year. Thinking that everything was settled, we filed and waited, only to learn that the creditor had not reported the updated status of the loan, so our entire federal refund would be garnished to settle the debt.

Needless to say, that knocked the wind out of my sail.

Lots of people depend on their federal tax returns each year to cover large expenses or to revive their personal finances. However, outstanding student loans, if they are not current or at least in forbearance, can cause your federal income tax refund to be garnished. Although what we lost was actually enough to pay off the debt and would release us from it, we couldn‘t help but feel blindsided. Our tax preparer told us that we could have appealed the situation, considering that the return was garnished unnecessarily. We decided to just let it go. Although we mourned the loss of our beloved tax return, debt freedom, much like family, is simply too great a commitment to take lightly.

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My Three-Year-Old Thinks a Credit Card Can Solve Our Problems

One of my son’s favorite “toys” is his credit card. In actuality, it is a pre-paid Master Card that I received for the mail-in rebate on a PDA phone. The money long gone, I must have kept the card in my purse, because my excavating toddler found it and claimed it as his own. The card is bright orange, so it’s reasonable to believe that he would play with the small piece of plastic; however, the game he was playing was cause for alarm. My husband and I made the discovery one afternoon as he was leaving to run errands. We must have been discussing a bill of some sort because my son interrupted us, declaring, “Mom, it’ll be fine - I got my red car!” ‘Red car’, of course, is slurred toddler-speak for “credit card” - he pulled it out of his pocket to show us.

While the sentiment was heart warming, the premise was horrifying. First of all, how does my son know what a credit card is? We only have one credit card right now, and it’s locked away with the Hope Diamond as we rebuild our credit by paying off bills and living beneath our means. He may see us pay for items in retail stores with debit cards, but that’s only every now and then, as he rarely goes shopping with us. We knew that he understood that some plastic cards represent money, but to call it a “credit card” specifically and then assure me that everything would be okay because he had one was a leap in understanding that I did not predict or foster in my three-year-old son. Where did he get the idea that credit cards make everything alright?

Hubby and I laughed nervously, and then looked at each other, wondering how he could have formed such an idea. We talked about it and came to some realizations that we weren’t so happy with. Although we know that young children absorb new information like sponges, frequently learning things that their parents have not taught them directly, we were unaware of how acute his understanding of currency is…for a three-year-old, anyway. While he still thinks all paper money is worth $50, he comprehends that adults exchange money for items and services. He believes that money gets you things that you want; he usually wants food, and he sees us pay for food with money. However, to leap to the assumption that credit cards solve non-food related problems (my husband and I were not discussing food on the day in question) is a broad jump in my opinion. He is learning about money from some other sources, too. As a parent, I felt that it was time for me to take a closer look into his media exposure as it relates to money, credit, and how the economy works.

After I thought about it, I began to see how we in the Western world are so inundated with media messages promoting a consumer credit culture that there is no way to escape it without becoming a hermit. One of my son’s favorite cartoons has a main character who is rich, and she uses credit cards to fund her lifestyle - in elementary school. One CBS Evening News segment by Nancy Cordes explores how credit card companies are deliberately targeting children as young as three years old by integrating credit cards into children‘s games and toy accessories.



Then, even the safest of prime-time television shows are interrupted with commercial messages from credit card companies that promote lush, satisfying lifestyles that are made possible by the almighty plastic. While the television doesn’t baby sit my children, they see enough of it to possibly be affected by the onslaught of credit card marketing and comic characterizations of rich super-spenders who don’t carry cash.

What’s a mom to do?

I have to take a direct approach to teaching my toddler about money and credit, even now. Christian Credit One gives some great advice about how to begin exposing children to money management lessons, even in their pre-school years. Their website is at http://www.ccone.org/.



I plan on implementing some of those tactics in my daily routine with my little one. The first step is getting him a personalized piggy bank that he can cherish and keep as he gets older. I want him to be able to correlate responsible money management with fond family memories and family values. That way, instead of thinking that he is helping mommy by using his “red car,” he will remember the lessons that mommy and daddy taught him about saving and spending less than what you have in the bank, not more. We want him to think about how fun it was to go to the grocery store and help mom and dad pick out items based on cost to value comparisons, helping to spend the family money wisely. I have fond memories of learning about money in pre-school. I want his memories to be pleasant, too; not a reminder of how young he was when he first started on the road to ruining his credit through a warped understanding of money and red cars.

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Applying For Unemployment Benefits Can Blow Up In Your Face

Sometimes you just don’t finish on top. The last time I worked a job was quite a few years ago, and unfortunately, I was fired. I was chronically late, and at a call center, that’s very bad. Very bad. That last time that I was late, I had a great excuse for not making it on time, but there was no room for negotiation. I had acquired too many demerits in too short a period of time, so I was let go.

The next step for me was applying for unemployment benefits. I had always been warned that getting fired from a job could disqualify one from receiving them, but my mom advised me to apply anyway. “The worst thing that could happen is that you get denied, right?”, she asked. I agreed with her sentiment and went for it. They approved me, and I was relieved. I would be getting married in less than six months, so I couldn’t afford to go from a full-time income to no income at all. I figured that since I would be moving to a new city once I got married, never to work again, I could simply receive the unemployment benefits until they ran out, and life would go on.

And that’s exactly what happened.

That is, until I received a letter from the state at my new address 150 miles away letting me know that my unemployment benefits were being disputed. I couldn’t believe it; I didn’t even know that such a thing existed. I received unemployment checks for months - why would the company dispute my eligibility after they had already paid the money? I was so young at the time that I didn’t even realize that it was my former employer footing the bill to begin with, so the entire ordeal was a whirlwind of confusion and questions. It also hurt my feelings because my former manager and boss personally signed off on the dispute. It truly was business, and nothing personal, but it sure felt personal. I couldn’t understand the fairness in being approved for unemployment benefits by the state and then being denied after the fact. If I was receiving unemployment benefits, the assumption would logically be that I do not have enough money to pay them back, or else I wouldn’t have needed them to begin with! I felt like I was being robbed at gunpoint.

And that’s almost what happened.

There was a hearing, and it did not go well. My former employer had a lawyer present - I was totally blindsided. I didn’t even know I needed legal representation, considering that the hearing was not before a judge. They ran me through the mud, my former manager speaking about me as if we never had any camaraderie at all. I was ordered to pay back every dime of a benefit that I was told legally belonged to me. However, just spending all that we had on our wedding and post-nuptial activities, we didn’t have the few thousands dollars that my former employer demanded. And so our joint state tax returns were garnished for a few years.

I later found out that I was not the only person I knew who had experienced this. Another young friend of mine found himself behind the barrel of the same gun, except General Motors was conducting the stickup that time. Who knew that just like buckshot spraying from a barrel, applying for unemployment benefits could blow up in your face?

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Can You Get a Good Job With Bad Debt?

People generally go to college to get the tools they need to get a great job. A degree gives you the credentials you need for professional employment. However, the job hunt doesn’t start after graduation. One of the benefits of the college experience is the opportunity to attain internships and student positions that are designed to lead to permanent placement. They’re the diamonds in the rough that lead to the very job security people attend college to obtain. My best friend landed such a job, and despite how much her employers liked her and how qualified she was for the position, she was still very uneasy about her future.

It turns out that you need more than a great resume and an education to get a good job these days.

My friend applied for a student position with the U.S. Army as a civilian working on base. She would be hired as a technical writer, which was right up her alley. As an English major and a freelance résumé writer, my friend could create instruction manuals for equipment usage or artillery assembly in her sleep. Technical writing takes a skilled pen and an analytical mind, and she has both. So, from the moment my friend saw the listing, she got excited because she knew she had a real shot. The salary was nice and they offered tuition reimbursement. She knew that this was her job. Since she is a skilled résumé writer, she has never applied for a job and not received an interview (her résumés are that good), and she knew her résumé would also serve as a preliminary writing sample. She could kill two birds with one stone!

And that’s exactly what she did.

She got a callback and an interview. In fact, there were two interviews. In both of the panel interviews that she had to undergo, she absolutely shined. She’s just one of those people who knows how and when to turn on the charm, you know? I never did as well as she does in the standard, run of the mill, one-on-one interviews most people get from potential employers; yet in two separate panel interviews, she was able to handle the pressure and even impress them. If that scrutiny weren’t enough, there was the extreme background check; she had to fill out a form that was between 40 and 50 pages long, recounting almost every significant aspect of her life. It was so detailed that she had to give the names, addresses, and contact information of every person whom she had lived with for seven days or longer over the last ten years! How can you ask a college student who has had various roommates to give you that kind of information? It was a nightmare just gathering all of the information that they required. They looked into every job she ever had and anyone who she ever called a friend. It caused me to be a bit paranoid, being her best friend since childhood. I felt like I was under the microscope, too. Yet, despite it all, she passed the very extensive background check. She told me about how much her interviewers liked her. It was an exciting time for her.

That is, until she found out that they would also be checking her credit.

We both panicked - at the time she had a little over $10,000 in unsecured debt besides her student loans. It was also bad debt - as a full time college student she wasn’t making enough to may her bills, so those accounts were in collections. If the credit check was a part of the hiring process, my friend knew she was toast. We tried to remain optimistic about it, thinking that maybe they would let it slide or somehow the results would slip through the cracks. For a moment, there was a small ray of hope; she received an acceptance letter saying that she had been hired and received clearance to begin working. Then, the dreaded reminder at the end of the letter - she would start after her pending credit check was completed.

Of course, the credit check caused a problem.

My friend was called in and her would-be manager explained that her bad credit history posed a unique security risk that would prevent her from being employed by the Armed Forces. Because she would have access to extremely sensitive information, her financial woes could very well serve as a bargaining chip for terrorists seeking information. In a nutshell, they could not afford to have people who may be desperate for money walking around an army base with access to classified information and areas. They did, however, tell her that if she paid the debt off she could reapply. Without the job, she couldn’t afford to pay off the debt. So, a great opportunity was lost because of previous financial irresponsibility. Soon after this experience, my friend, an older student at the time, filed for bankruptcy.

Ironically enough, she was later hired by the IRS!

Go figure…

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Doubling Down On Debt: How I Became a Gambling Addict

One tidbit of information about me that most of my friends don't know is that I used to be a gambler. You may not think that's such a big deal, but my reasons were different than most. Many people visit casinos and play the slots and other games for recreation; still others enjoy the thrills and high drama that ensue with games of chance. Neither was the case for me. As young as nineteen years old, when I went to the casino, I was serious and focused because I was going there to make money. I gambled to make money because I was drowning in debt.

The legal age for gambling in Canada is nineteen years old, so many young Michiganders cross the Ambassador Bridge looking to have a grown up good time. That's why soon after my nineteenth birthday I began to study the game of Blackjack. The slot machines weren't much fun to me because they seemed to leave everything to chance, with most players losing their money in the end. That wasn't much fun at all. I had heard that Blackjack was the only casino card game in which the house could truly be vulnerable, so, in my free time away from my studies, I learned as much as I could about Blackjack. The more I learned, the more obsessed I became with getting good because it seemed that this form of gambling might really empower me to pay off my debts. By my sophomore year in college I was beginning to rack up lots in student loans, and I had a couple of credit cards that were close to being maxed out because I was not as fiscally responsible as I am today. Throw a new car with a note in the mix and you end up with one very frustrated young lady. I was mostly paying my own way through school, so I quickly learned about the stress that comes from high debts with low income.

I needed a quick way out.

So, I turned to gambling. Not being a real risk taker, I vowed to only gamble moderately, and to only play a game like Blackjack that could yield a reasonable return for my educated effort. In the beginning, my plan worked. My visits to the casino brought me some much needed prosperity. However, as time went on and my debts began to accumulate, my gambling trips became more frustrating and I became more desperate. I found myself addicted to playing Blackjack and addicted to winning. I would even play the slots that I disliked so much, just hoping for a break. I would take bill money to the casino to flip it so that I could pay more bills, and end up losing the little bit that I had. My youthful ingenuity had turned into a full blown gambling addiction, and it was doing more harm than good.

I needed a quick way out.

I thank God that at the height of my demise, my mom was in the picture with a watchful eye. She saw what I was doing, and she began to counsel me. She even helped me get my head back above water. Because I hated losing so much, her lifeline of encouragement and comfort was easy to grab a hold to. I was falling into deep depression, so her understandng and care nursed my poor spirits back to health. I really needed someone older to tell me it would be alright and offer me a helping hand. There are millions of struggling gamblers who are not so fortunate, however. Many gambling addicts do not have a shoulder to cry on, and many of them are so hooked on the thrill they get from high stakes that they aren't able to pull away the way that I did. I'm glad that I was able to get out of gambling before it truly became a lifestyle. I feel the same way about debt. Maybe if gambling and debt were part of my lifestyle today, I might still be trying to juggle them both. I suspect that many gambling addicts are performing such juggling acts right now.

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Check Writing Habits That Can Get You Prosecuted

I think that almost everyone who has a checkbook has written at least one check in their lifetime that they knew they could not cover at the time the check was written. Because there is usually a time lapse before the actual redemption of your check, sometimes people write checks for amounts they do not currently have in their accounts, knowing that by the time the check makes it to the bank, the money will be there.

This is not a good practice; my good friend found out the hard way.

Times got a little tight, and my friend found himself needing groceries before he received his regular paycheck. So, he went to his local grocery store and wrote a check that he couldn’t cover at the time, knowing that by the time the check was cashed, the funds would be available. The problem with this plan was that you must always expect the unexpected; some other bill payments that went through the same week maxed him out, and by the time the grocery check was processed, there were insufficient funds to cover that amount. My friend took care of the overdraft fees soon after the incident, but somehow managed to let a period of time go by without actually repaying the store for the bounced check.

Well, the huge regional grocery store chain did not forget.

By the time he returned to the store to settle the debt, they had sent him to collections. Who knew that grocery stores had collections departments? Collections had sent his information to the county prosecutor’s office, and my friend received a friendly notice in the mail stating that he had to attend and pass a class for check fraud offenders, or legal action would be taken against him!

The class, he told me, was an eye opener. Through group interaction, he learned that there were lots of people taking the class with him for a myriad of reasons. Little old ladies, young men and women, working class and professionals; all were there because of one bad check. Some were there because they were irresponsible, and some were there because they were so financially strapped that they had to pass a bad check to eat. Others, like my friend, just took a seemingly small risk and ended up on the losing side of the bet. The four-hour course was on money management and educated the attendees on the risks and legal ramifications of committing check fraud, which all of them were guilty of, whether intentionally or not.

My friend walked away from the experience having learned a lot about the importance of managing money meticulously when you are on a budget. Not only did this hard knock teach him a thing or two, but the class itself was actually very valuable, he says. Although his intentions were not malicious, what he did was still illegal. Otherwise honest people can participate in criminal activity because of a lack of prior planning and proper accounting.

Go figure...

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Does Aging Affect Financial Prudence?

During a recent phone conversation with my mother, I realized something that I apparently had been oblivious to – she really is getting older. My mother is swiftly approaching 70 years old, but is just as lively and sassy as ever. Now that I am a wife and mother, too, we talk all the time, and I lose sight of our age difference because our relationship has expanded into a genuine friendship. She will never be my peer, but she is timeless to me now.

Well, she was until she told me that somehow, while paying her monthly bills, she had miscalculated something somewhere and her bank account was slightly overdrawn.

My mom, who has always been a shrewd money manager, doesn’t go through these kinds of things. She harshly scolded me in my early twenties as I discovered the joys of the VISA check card and the pains of overspending because I had swiped my card too carelessly. Growing up, she always had bank books full of deposit and withdrawal notations – I thought that she was an accountant!

Simply put, my mom doesn’t ever, ever overspend. EVER.

So, when she told me that she had made this kind of error, it was a little rattling. What really made my heart sink was that she was so upset about it. It wasn’t because she was worried about money; she has good credit and still works, so she simply planned to charge her purchases to her VISA until her next payday. No problem. My mother’s worry was that she might be falling into the same kind of diminished financial prudence that many seniors her age experience.

Financial Advisor Magazine reports that “More than 14% of Americans—5.4 million senior men and women—have some form of dementia or Alzheimer’s disease by age 70, according to a 2007 NIH study,” and that “The AARP says that half a million folks 50 years of age or older already need assistance with their finances.” I’m sure that many of my mother’s friends need assistance in managing their finances due to diminished capacity. It’s easy, however, to dissociate yourself from others who need help with something when you are so good at it. Now, the queen o’ the balanced checkbook had fallen from her throne. I’m sure it was quite unsettling, and I hurried to assure her that everyone makes mistakes sometimes, so that she wouldn’t continue to worry.

I really do believe that this snafu was a one-time mishap for her. I may just be a loyal daughter. But it would be wise for both of us to remain open to the idea that my mother may not be the invincible Superwoman after all.

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"Aspire" For Good Credit, Not Fast Cash

The credit card industry has some of the most effective marketing I have ever seen. Albeit sleazy most of the time and misleading at best, people actually apply for the cards that are advertised with little to no caution or due diligence. The marketing messages grab them and compel them to act – that’s what “good” marketing does.

One of the best examples of this that I have ever seen was the Aspire VISA card. I even remember the first time I saw the commercial. The spokesperson is an average looking woman with a child in an urban area. She calmly describes how hard she works and what not, letting the viewer know that she is a salt-of-the-earth, working class American, just like them. After she convinces you that she is non-threatening and sympathetic to you, she begins to convey the heart of the marketing message – she tells you how you “deserve” to have a credit card.

I was instantly turned off and angered.

I know that I said this was “good” marketing, and technically, it is. It achieves all of the goals of a “good” marketing campaign. My problem with it was that it was an absolute lie.

Most people with bad credit have it because they were (and oftentimes still are) irresponsible and or ignorant concerning proper credit usage and the importance of creditworthiness. If you spend more than you make and you do not absolutely have to (some individuals do have extenuating circumstances), you don’t “deserve” a credit card until you clean up the mess you’ve made, period. If someone gives you a second chance, then it’s a blessing, not something you’re entitled to. Unfortunately, however, most people are so self absorbed that they don’t stop to think about the predatory nature of advertisers who appeal to their vanity instead of their rationale. As I watched the commercial, unable myself to get a credit card at that time because my credit was bad, I was still offended at how this company was obviously trying to take advantage of me and my situation.

Soon after I first saw this commercial, I got into a conversation about credit with a good friend of mine. We usually call each other to rant and rave, so I was sure that I would get a chance to tell her about this horrible commercial I had seen so that we could laugh at how obvious their ploy was. She, however, got the head start, going on about how she had just gotten the screws put to her with a credit card she had. She was on the phone with customer service all day for the second day in a row, trying to resolve issues concerning her credit limit. She was promised a limit of about $500, and when she tried to make a purchase over $300, her card was declined. It turned out that because the card she had acquired was a “bad credit” credit card, there were fees tacked on right at the very beginning, totaling about $250. She owed them $250 before she had spent a dime! What a rip-off! She had gotten the card because she wanted to rebuild her credit, and she was prepared to pay more than the minimum balance each month and everything, but now she was steamed and ready to pop. I was appalled. Because I had recently seen the horrible Aspire commercial, I asked, with more than a hint of sarcasm, “It isn’t that Aspire card, is it?”

She gasped and replied, “How did you know?”

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Why I Tend To Overspend

I am currently in credit card rehab – my loving husband, who admitted me, is also the chief of staff. We are in the process of getting out of debt for good, so there has been absolutely no credit card usage allowed, period. It’s been like this for quite some time now, and I have to say, I didn’t think that I would make it this long. Paying off debt while ceasing from creating new debt seems like an obvious solution, but putting such theory into practice is harder than it seems. When we abruptly stopped charging purchases, I began to show withdrawal symptoms, which is why I am here, cleaning up my act.

Although I went down kicking and screaming, I always understood that my husband was right for putting a halt to all credit card spending until we were ready to be responsible users. We did what many newlyweds do – we got a joint card almost as soon as we got married and bought things that we thought we needed for our new life together. The problem was that we didn’t have the money to get those things outright; thus, the use of credit. This kind of spending put us in a vice that really began to squeeze when unexpected situations arose, pinching our finances so hard that accounts became delinquent.

How did that happen?

I believe that, at least for me, the problem began when the foundation was laid for my conceptual understanding of credit. Besides the fact that my teacher was an eighteen year old girlfriend, there were negative influences and temptations on every side. College campuses are now lairs for predatory lenders with magic plastic cards, giving you a free t-shirt or tote bag for books in exchange for your credit application. Hip, trendy boutiques make it all too easy for young people to obtain store credit. So, my belief system concerning the purpose for and availability of consumer credit was corrupted from the very start.

I bought into the idea that credit was a pipeline as opposed to a lifeline. From what I had gathered from my friends and the credit card companies, consumer credit was there so that I could purchase things I couldn’t afford and simply pay for them later. As long as I made small monthly payments, I could buy whatever I wanted, up to my credit limit. Credit was a money pipeline, creating cash flow in the present based upon resources from the future. I could keep the pipeline going, so long as I put a little cash into it on a regular basis.

While that sounds good, it’s a shame that it’s completely untrue!

Consumer credit was originally developed as a lifeline, primarily for the well-to-do and business owners in order to purchase necessary equipment or other assets that would either appreciate in value or help them turn a profit. That’s a far cry from getting some new clothes (that I really can’t afford) this week, even though I don’t get paid until two weeks from now.

Well, after living a while with this “pipeline mentality”, I soon came face to face with the realities involved with racking up debts that I couldn’t pay, and then being denied the help I really did need in the future because of past indiscretions. Then, I turned around and started fresh again when I got married. Apparently, I hadn’t learned my lesson in college.

I sure did learn it during my stay in credit card rehab, though. It’s actually been a couple of years now. I honestly believe that I have been rehabilitated. But, just to be sure, we don’t plan on getting another credit card until we know exactly what we will use it for and that we will pay the balance off every month that we use it.

The pipeline is officially closed.

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Frugal Living Makes Headlines?

Apparently, living within one's means is so uncommon these days that the New York Times reports a 'cultural shift' moving Americans toward not living like debt is a lifestyle, but like the burdensome financial responsibility that it is. Because of the economic slow down stemming from increasing foreclosures and unemployment, fresh credit is harder to attain, so people are cutting back. That's what the New York Times is reporting.

Is being marginally responsible news now?

What happened to the values that we learned growing up? What happened to saving for a rainy day, not taking more than you needed, exercising restraint? I understand that sometimes people find themselves in a tough spot and often have no choice but to use credit to live, but most of us don't fall into that category. Most of us have financed lifestyles that our paychecks can't justify. Most of us have at some point or another lived as happy contributors to the debt carrying culture we call Western living.

Well, now the chickens have come home to roost. It's time for us to pay up and live like people did before consumer credit became mainstream.

It sounds good to me.

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My Personal Economic Stimulus

With tax season here and Bush's economic stimulus check on it's way (one day), I can see myself buying lots of great things I might not otherwise purchase without a lump sum of money at my disposal.

I think we all have such daydreams -

However, when I come back to reality, I realize that such splurging would be unwise. My husband and I are going to revitalize our savings, take care of some small remaining debts, and then get some necessities for the kids. And maybe a nice meal at a swanky restaurant.

That's it.

Consumer borrowing is up, up, up, and the outlook is so bleak that the Fed is helping banks hit by the mortage lending crisis by auctioning fresh cash so that short term borrowing isn't disproportionately funded by credit card debt. Apparently, many of us are carrying even more credit card debt because home refinancing is down. Strapped for cash, people are just charging it.

However, those of us with growing families, good jobs, and businesses (home businesses, too) should do well during refund season, helping to bring balance back to our personal finances. We are going to be as responsible as we can with ours. That's an economic stimulus that will continue to pay off in the future.

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Teaching Kids to Manage Credit: It's as Easy As ABC

Good credit starts at home and spreads abroad -

Well, the old adage actually says "charity" instead of "good credit", but the latter case still rings true. When kids are taught financial literacy and responsibility growing up, they take those lessons with them throughout their lives, eventually teaching their own children.

My mom and dad had no idea that I would need to become financially literate before I left home. My parents had children in their later years, so we are from two totally different generations. Sure, they taught us basic spending and savings skills, but there was not much mention of credit, investments, retirement funding, or anything that "grown up." They simply thought that we had time to learn those things.

They realized that they were wrong when I came home from college with a plummeting credit score and some serious unpaid bills.

There are lots of families, however, who are aware and are taking action early. This recent USA Today article highlights some great strategies that real parents are using to foster fiscal fitness in the lives of their children. I saw some things that I plan on implementing with my little ones when they come of age.

Hopefully, they will learn from my errors and omissions and provide even better training for their children...

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Can You Really Buy a Great FICO Score?

With every great industry comes subindustries; the housing industry is no different. From the traditional mortgage lending industry emerged the subprime mortgage industry. However, now that subprime lending is mainstream, companies who offer quick FICO fixes for individuals who have further damaged their credit through subprime borrowing abuses or other poor credit usage are now coming to the foreferont.

Yes, you can buy a good FICO score these days.

However, you might not be able to do it for long. These kinds of companies use legal loopholes to cosmetically establish good credit scores, and neither the Fair Isaac Corporation nor mortgage lending industry leaders are happy about it. These quick credit fixes are achieved by essentially attaching individuals with poor credit to the loans and credit accounts of others with good credit - and it's legal! This, opposers argue, will inevitably lead to more woes in mortgage lending scrutiny and foreclosures because people who really should not be approved for loans will be.

Furthermore, many think it to be unethical, as it is a false positive of sorts concerning one's creditworthiness. Fair Isaac is already changing it's formula to exclude some of these slick maneuvers from counting toward FICO score calculation. Industry whistleblowers are calling for further regulation. It seems like this 'insta-credit' subindustry might be of the "fly by night" sort with this level of opposition.

But what do I know - upon seeing the first episode or so, I predicted that the Power Rangers would flop, and I was absolutely sure that "Friends" wouldn't last.

Go figure...

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Cosigning for Kids - Is It Worth the Risk?

There are lots of parents who cosign for vehicles, apartments, and homes for their children who have little or bad credit. Sometimes a parent has to sign as a primary owner with the child as a secondary owner. My mother supported me in this way when I was younger. However, is it always worth the risk to go out on a limb for children and loved ones?

A friend of mine would be inclined to say no.

She took on the primary responsibility for her young daughter's car loan. The twenty-something daughter needed reliable transportation to move between freelance IT job opportunities, as that was how she made her living. She also was involved in weekly church activities that ended at night. No mother wants her daughter to be vulnerable, so she agreed to put her credit on the line for her daughter's protection and convenience.

Needless to say, this story does not have a happy ending.

In short, the daughter, who was also generally irresponsible, stuck her mother with the bill more often than not. The daughter was quite the diva, and her feelings of entitlement caused her mother to become financially strapped in order to keep from ruining her credit.

Sometimes kids need and appreciate a hand up. Sometimes parents can become enablers. My children aren't even old enough to ride bicycles yet, so I dread the day when they ask me for a set of keys. It must be difficult dealing with issues of whether or not to help certain children in certain ways. This must be another side of what people call "tough love."

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Alternative Lending Sources

What is the proper measure for creditworthiness in this day and age?

Apparently, it is no longer simply the credit report or the verdict of one's local banking institution. There are so many individuals who fall short of traditional standards of creditworthiness that the marketplace has naturally made room for non-traditional lenders. Besides the controversial subprime mortgage lending industry that most people are by now familiar with, there is a increasung trend in person-to-person lending organizations. Websites like Prosper.com facilitate lending transactions between individuals and other single or small group benefactors. Using such a service empowers people who may not otherwise receive loan funding to finance their dreams and goals.

I am still not sure how I feel about the rise in alternative lending resources. At first glance it looks great; power to the people, right? There is no reason why deserving people should have to remain at the mercy of the big bad traditional financial institutions, right? I'm not so sure that pumping more loans into the pipeline is the answer. Then again, I am one of the few who believes that people should begin to move away from financing instead of toward it. If enough people renounced the borrowing lifestyle and stopped applying for loans, the market would respond with more competetive rates and terms. Then we wouldn't need many of these alternative lending options.

Wouldn't that be something?

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What Will I Do With My Tax Refund Check?

So Bush is giving something back...

Approximately 1% of the Gross National Product will be distributed to middle America as an economic "shot in the arm." Refund checks for everyone; yipee! Although I know that this 'free money' won't actually make it to my doorstep until much later this year, I am already thinking about what my husband and I are going to do with it.

The responsible thing to do would be to pay down our debt with the money; we wouldn't miss it because it would not be coming out of our regular income. How simple is that? I know that most people will probably hit the malls and the car lots, which is what the government is hoping for - a jolt in consumer spending. Many will even convince themselves that they do so well paying their bills all year long that they deserve to splurge.

Maybe that's true; but is it wise?

I hope that my husband and I maintain the discipline we need to go ahead and invest that money in our freedom. It might make me feel free to go to the mall and spend $1600 on various wants and needs, but once I get home and see that unwaivering mountain of bills, the feeling will fade. Paying down or paying off a debt that we owe will be a step toward a freedom that lasts.

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Life Lessons: How Will Your Children Learn About Credit?

I remember my first credit card - it was a store card for a popular fashion outlet. I recall how nervous I was as I completed the application; I didn't think that I would be approved. Despite my financial advisor's assurance that I would easily attain this line of credit, I found myself anxious, uncertain if they would trust me that much. And why should they? I was an eighteen-year-old college freshman who's financial advice came from a nineteen-year-old.

My best friend was one year older and that much wiser, but she was my role model 500 miles away from our home in a brand new environment. She told me that I should have this card for emergency party clothes and other such dire necessities, and since I could also use it in their sister company's catalogue, it was an absolute must-have.

Who could argue with that?

A well educated, financially literate young adult could. My parents had no idea that I needed to be taught about the proper use of credit because they did not anticipate it even being an issue so soon. I was supposed to be a mature adult before anyone would even approve me for a line of credit. By then, I should have had the wisdom to know what to do.

Needless to say, I waltzed down a slippery slope that quickly led to bad credit. I am still recovering. Years later, I still have the same best friend, whom I still tease, accusing her of single handedly ruining my credit with her bad advice. However, it wasn't her poor advice that sealed my fate, but the lack of good advice from the proper sources.

Bottom line: I am not going to let my kids go down the same road I did. I am going to teach them about money and credit. If I don't, who's going to teach them? Predatory lenders, and teenaged peers who really have no idea what they are doing, that's who.

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Will You Walk The Road Alone?

The road to financial freedom is a lonely road, and sometimes it's a road one has to walk alone.

Our family grew significantly last year with the arrival of twins, so my husband and I knew that we could no longer evade the inevitable: we were going to have to get a minivan. With three small children and a dog, we could no longer afford the luxury of our mid-sized SUV; we needed more space, and we needed it ASAP. Many young couples like ourselves would have used such a family expansion as an excuse to take on more debt, rushing to get a brand new minivan in the name of necessity. We, however, are on the road to debt freedom, so financing a new vehicle was out of the question.

My husband found a very nice used minivan at a local dealership that he felt was reasonably priced and possibly worth more than what the dealer was asking. The only drawback was that it cost more than what we had in our savings. In order to get what we wanted, we would have to save very aggressively in addition to paying all of our current bills! Needless to say, it wasn't much fun at all.

There was no take-out, no movie night, and no clothes shopping for a while. Delicious wheat bread was replaced with not-so-appealing white. Some of our friends even thought that we had come upon hard times. We weren't paupers, we just conserved in every way possible, and those who are still in a debt-controlled lifestyle just didn't understand. However, when we had finished suffering for a little while, we were able to get what we needed without owing a dime. The van is gorgeous, and those who scoffed at our penny pinching have all since bitten their tongues. The best feeling, however, was not the feeling that we had received the fruits of our labor or even that we had done what others would not or could not do.

The best feeling was the freedom of knowing that we owned it - ownership is the strength that keeps us on this lonely road.

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