Financial Lessons From Dad

Sunday is Father’s Day.  Many fathers across the country will receive new ties, drills, silly hats or socks, stuff they need or stuff they don’t want.  Hopefully you will get your father a gift he really wants similar to the T-Mobile commercial that shows a Dad going to buy a cell phone for himself and signing his baby daughter’s name. 

Dads often don’t get the love or appreciation they deserve.  After all, they are the other half of the chromosome that creates life.  If you haven’t said thanks to your Dad even if you never met your Dad say thank you, he helped create you.  Just think what life would be life without you.

Now for my advice, Dads always provide advice to their children, no matter what age. Here are some financial words of wisdom from dads. 

1. Work hard.  Have a strong work ethic which will translate to all aspects of your life.  Your finances are an important aspect of your life and you should take great care to maintain your finances – take time to know how much you owe, how much you earn and how much you spend.  These basic things will help you to develop a plan to get out of debt and plan for retirement.
2. Save for a rainy day.  Life happens. Unexpected events will occur so why not be prepared.  Create an emergency fund to cover bills for 9-12 months so when something unforeseen happens you have the money to pay for it instead of using your credit card.
3. Make sacrifices.  Dads always make sacrifices for their family.  You should too, especially financially.  When making purchases consider the impact on your family. If you are single consider the impact to your future.   Determine if the item is a need or want.  Wants can be bought later. 
4. Pay with cash.  Dad always paid with cash.  He wasn’t too ashamed to skip buying something because he didn’t have the money.  He only bought want he needed and a few extras every now and then and he turned out fine.
5. Plan for the future. Dad thought about the future.  He went to work every day and paid his bills on time.  He didn’t spend money unnecessarily and lived a modest lifestyle.  He saved money and had a retirement account. He lived comfortably during retirement and his family’s needs were met.

7 Effective Ways to Use Debt Settlemnet

Approximately 43 million Americans have at least one account that is 90 days or more late. There are several methods that can be used to pay off a debt such as paying in installments, paying the debt in full or negotiating with the creditor or collection agency to offer a debt settlement. Apply for debt settlement if an account is more than 90 days late.  

Debt settlement is best used for unsecured debt such as: credit cards, medical bills, department store cards, student loans, personal loans or other small debt that have been reported to a collection agency.

Debt settlement can consist of offering a one-time payment or installment payment that is less than the full amount owed. The remaining debt owed is forgiven.

The advantages of a debt settlement are: it eliminates a monthly payment, puts you back in good standing with the company, and reduces the total amount of debt you owe, helps boost your credit score and helps you look more favorable to potential creditors and lenders.

The disadvantages of a debt settlement are: it may take months before an actual payment is applied to your debt, you may be subjected to legal action while waiting for a payment to be made on your account(s), using their service may be reported on your credit report which lowers your credit score, you will be required to participate in a payment plan for 3-5 years and will be required to pay a monthly fee plus setup or other fees. Here are 7 effective ways to negotiate a debt settlement.

1. Contact information. Prior to negotiating log the person’s name, direct phone number, email address, and the name of the company. Avoid providing your home or work phone number or employer name.
2. Negotiation type. Negotiate either over the phone or in writing. Keep accurate notes of what the representative says and everything you say.
3. Negotiate. Don’t agree to the first offer. Don’t offer to pay more than 50% of the outstanding balance.
4. Documentation. The company may ask for proof of income, assets or other debt owed to determine if you can the debt. Block out your bank account numbers, SSN, DOB, phone numbers and any other personal information when submitting documentation.
5. Proof. If they have informed you they are recording your conversation, you can also record the conversation and inform them you are doing so. Request a debt settlement agreement confirmation letter.
6. Don’t accept no. If your debt settlement offer is rejected consider asking the company to lower your interest rate, lower your monthly payment, and waive any late fees or other fees.
7. Payment. Pay by money order or cashier’s check which is the safest method. Avoid paying by personal check.

Free Credit Report Websites Are Not Free

Consumers were entitled to one free credit report from each major credit bureau – Equifax, Experian and TransUnion every 12 months. Consumers are allowed to obtain a free copy of a credit report denial of credit, receive public assistance, a victim of fraud or are unemployed.

Some websites provide a free credit score but they are not affiliated with the mandated government website and the credit score provided is not a FICO credit score which is used by 90% of companies to rate consumers for approval for credit. Credit scores provided by many free credit score websites offer an estimated credit score. Most major banks offer customers a free copy of their credit score.

Not all free credit report websites are the same and many of the websites display information that is confusing to consumers. In exchange for getting a free credit score or credit report, consumers risk their personal identity.

Many of these companies sell, rent or share consumers’ personal information that increases the risk of identity theft. Many of the free credit report websites offer a free credit report but require a credit card to sign up. The websites may also offer credit-monitoring services for a fee.

However, credit monitoring services can be received free of charge if you have been a victim of identity theft. The only reputable website to use is www.annualcreditreport.com to get a free copy of your credit report. The website charges a small fee to obtain a copy of your credit score.