Chapters

Mortgage Comparison Calculator

Posted on March 11, 2015 by Melissa Hart

Many home buyers do not shop around for a mortgage. Failing to comparison shop for a mortgage often means higher monthly payments and paying thousands of dollars more in interest over the life of the loan.  A recent survey of mortgage borrowers revealed that:

  • Nearly half of borrowers only consider one lender or broker before applying for a mortgage.
  • Over three-fourths of borrowers only apply to one lender.
  • Lenders and brokers were the most common mortgage information source; with real estate agent also used. Other source of information were websites, financial and housing counselors, friends, relatives and coworkers.

Home buyers should complete an application with multiple lenders or brokers in an effort to get a better deal.  Also, ask questions and take actions to help you find the best mortgage for you

For additional information on comparing mortgage rates, click here:

For the complete report on study, click here:

A mortgage comparison calculator is available, click here:

Teaching Suggestions

  • Have students interview people who own homes to obtain information about the mortgage process they used.
  • Have students prepare a data summary of mortgage rates for different lenders in their area.

Discussion Questions 

  1. What actions can be taken to reduce mortgage costs?
  2. Describe factors that a person should consider when choosing among several mortgage lenders.
Categories: Chapter 7, Financing a Home, Home Buying | Tags: , , | Leave a comment

Credit Report Accuracy

Posted on March 7, 2015 by Melissa Hart

Credit Report Accuracy

In late January 2015, The Federal Trade Commission issued a follow-up study of credit report accuracy and found that most consumers who previously reported an unresolved error on one of their three major credit reports believe that at least one piece of disputed information on their report is still inaccurate.

The study found that one if five consumers had an error that was corrected by a credit reporting agency after it was disputed on at least one of their three credit reports.  The study also found that about 20 percent of consumers who identified errors on one of their three major credit reports experienced an increase in their credit score that resulted in a decrease in their risk tier, making them more likely to be offered a lower auto loan interest rate.

For more information, Click Here.

Teaching Suggestions

  • Ask students what are their legal remedies if a credit reporting agency engages in unfair reporting practices.
  • Bring to class examples of credit-related problems of individuals and families. Suggest ways in which these problems might be solved.

Discussion Questions

  1. Why is it important for consumers to check their credit reports at least once a year?
  2. What can consumers do to ensure that their credit reports are free from errors?
Categories: Chapter 5, Credit Scores | Tags: | Leave a comment

Tax Scams

Posted on March 4, 2015 by Melissa Hart

Phone calls from criminals impersonating an Internal Revenue Service agent are the most common and serious tax scams reported by the IRS. Taxpayers should be aware the IRS never calls demanding payment or to ask for a credit card; the agency will first make contact by mail.

Phishing involves a taxpayer receiving an unsolicited email trying to obtain financial or personal information.  These phony emails often look very official with an IRS logo.  Tax-related identity theft occurs when a stolen a Social Security number is used to file a tax return for a refund.  Fraudulent tax preparation services prey on innocent taxpayers with promises of large refunds.  Be sure to investigate the credentials of the tax preparer and make sure the preparer will be available after April 15.  Avoid tax preparers who base their fees on a percentage of the refund or promise a large refund.

Other common tax scams include inflated refund claims, fake charities, filing false documents to hide income, abusive tax shelters, falsifying income to claim tax credits, and excessive claims for fuel tax credits.

For additional information on tax scams, click here:

Teaching Suggestions

  • Have students talk with others to obtain information about actions taken to file their taxes.
  • Have students prepare a list of warning signs of tax scams.

Discussion Questions 

  1. What attitudes and behaviors can result in a person being a victim of a tax scam?
  2. What actions can taxpayers take to avoid being a victim of a tax scam?
Categories: Chapter 3, Chapter 6, Frauds and Scams, Taxes | Tags: , , | Leave a comment

Your 2015 Tax Return and the Health Care Law

Posted on February 28, 2015 by Melissa Hart

Certain provisions of the Affordable Care Act will probably affect your federal income tax return when you file this year.  The law requires that you and each member of your family have qualifying health insurance coverage for each month of the year, qualify for an exemption from the coverage requirement, or make an individual shared responsibility payment when filing your federal income tax return.

Most taxpayers will simply check a box on the tax return to indicate that each member of their family had qualifying health coverage for the whole year.  Qualifying health insurance includes coverage for most, but not all, types of health care coverage plans.  If you bought coverage through the Health Insurance Marketplace, you should receive Form 1095A, Health Insurance Marketplace Statement from your Marketplace by early February.

For more information, Click Here.

Teaching Suggestions

  • Ask students to search the Internet to gather more information about the new IRS requirements and the Affordable Care Act.
  • What are provisions that might affect an individual and their families?

Discussion Questions

  1. What are the reporting requirements when you file your federal income tax return this year?
  2. How can you determine if you are eligible for an exemption?
  3. What should you do if you are expecting to receive 1095A and you don’t receive it by early February.
Categories: Chapter 3, Chapter 9, Health Insurance, insurance, Taxes | Tags: , , , | Leave a comment

Unscrupulous Debt Collectors

Posted on February 25, 2015 by Melissa Hart

In January 2015, the U.S. Department of Justice sued a Texas-based Commercial Recovery System, Inc., a debt collection company that allegedly impersonated attorneys, law firm staff, judicial employees and mediators.  The company threatened people with lawsuits, seizure of their property, or wage garnishment.  All these practices are against the law.  Under federal law, debt collectors–including collection agencies, lawyers who collect debts, and companies that buy delinquent debts and then try to collect them–can’t use abusive, deceptive or unfair practices to collect from you.

For additional information, click here.

Teaching Suggestions

  • Ask students to check a local Consumer Credit Counseling Service to learn about their services provided to consumers.
  • Ask students to compile a list of places a person can call to report dishonest credit practices, get advice and help with credit problems.

Discussion Questions

  1. Which federal law(s) protect your rights if you are ever contacted by a debt collector?
  2. If you need help regaining control of your finances, what resources are available to you?
Categories: Chapter 5, Consumer Complaints, Debt | Tags: , | Leave a comment

The One Financial Mistake that Could Cost Homeowners a Bundle

Posted on February 21, 2015 by Melissa Hart

“Interest rates have bounced around historical lows for years, yet a surprising number of homeowners who could benefit from a refinancing still haven’t taken advantage of the potential cost savings.”

In this article, Marine Cole points out some surprising facts about interest rates and the reasons why people don’t refinance their homes.  According to Ms. Cole and other experts, some people are simply unaware of their current rate or don’t have the get-up-and gumption to refinance.  Other factors include procrastination, mistrust, and the inability to understand complex decisions may also be barriers to refinancing.

The article also points out that the decision to refinance could result in thousands of dollars in savings for the homeowner.  For example, refinancing a 30-year, $200,000 mortgage from 6.5 percent to a current rate of 3.35 percent will save approximately $130,000 in interest payments over the life of the loan.

For more information, click here. 

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Stress the importance of making sound financial decisions not only when buying or refinancing a home, but other aspects of your financial life.
  • Discuss the reasons mentioned in this article that describe why people would not refinance and take advantage of lower interest rates for buying or refinancing a home.

Discussion Questions

  1. How important is comparing interest rates when either purchasing a home or refinancing an existing home mortgage?
  2. According to this article, there are many reasons why people don’t refinance their home. If you were refinancing a home mortgage, what would be your major obstacle to refinancing an existing home mortgage?  How could you overcome this obstacle?
  3. Assuming you had a chance to refinance your home and save $100,000 over the life of the loan, would you refinance? Explain the factors that would influence your decision.
Categories: Chapter 8, Financing a Home, Home Buying | Tags: , | Leave a comment

The Seven Baby Steps (Dave Ramsey)

Posted on February 18, 2015 by Melissa Hart

“Get out of debt the same way you learned to walk–one step at a time.”

This article describes Dave Ramsey’s seven steps that anyone can take to get out of debt and begin to manage their personal finances.  These seven basic principles have been taught by Mr. Ramsey via radio, books, Financial Peace University, live events, and online.  Listed below are the seven steps discussed in this article.  Note:  You can get more information about each step by clicking on the “Learn More” tab.

  1. Begin by creating a $1,000 emergency fund.
  2. Pay off all debt using the debt snowball .
  3. Save 3 to 6 months of expenses in a savings account.
  4. Invest 15 percent of household income into Roth IRAs and pre-tax retirement accounts.
  5. Create a college funding plan for your children.
  6. Pay off your home mortgage early.
  7. Build wealth and give.

For more information, click here. 

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Ask students visit the Dave Ramsey website.
  • Discuss some or all of the seven baby steps described in this article. Reminder:  Students can get more information by clicking on the “Learn More” tab.

Discussion Questions

  1. How can the seven baby steps help you manage your personal finances?
  2. Do the steps in this article make you want to change your priorities and what’s important in your life? Justify your answer.
Categories: Budget, Chapter 1, Chapter 2, Chapter 5, Debt, Financial Planning, Home Buying, Savings | Tags: , , , | Leave a comment

Newly Married with $52,000 of Debt

Posted on February 14, 2015 by Melissa Hart

My Wife and I Never Discussed Money Before Getting Married–and Ended Up with $52,000 of Debt

Prior to tallying up our debt, we’d talked about traveling internationally, starting a family, and, some day retiring comfortably. There was so much we wanted out of life, but . . .”

This is an excellent article that describes what can happen when a soon-to-be-married couple doesn’t talk about finances.  Fortunately, the two people in this article–Deacon and Kim Hayes–realized they had a problem and then took steps to get their finances back on track.

Specific steps this couple took can make a big difference over time.  Among the suggestions included in this article are:

  • Writing down all your assets, debts, income, and expenses.
  • Prepare a budget and review each item for opportunities to save money.
  • Replacing a newer, expensive car with an older car.
  • Selling unwanted or unneeded items online.
  • Using any extra money to repay debt.
  • Establishing an emergency fund.
  • Saving and investing a specific amount each month.

Consider This:  Deacon Hayes–the author of this article–became a financial planner and now shares his story with his clients.

For more information, Click Here. 

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Discuss why engaged couples need to discuss their finances before they get married.
  • Stress how easy it is to get in debt and how hard and how much time it takes to get out of debt.

Discussion Questions

  1. Assume you are dating someone who seems to spend more than they make. In this situation, would you continue to date this person?  Explain your answer.
  2. One of the suggestions included in this article is that people write down their assets, debts, income, and expenses. How can this suggestion help a young-married couple plan their financial future?
  3. Assume you have credit card debts and an automobile loan that total $75,000. What specific steps can you take to reduce or eliminate your debt?
Categories: Budget, Chapter 1, Chapter 2, Chapter 5, Chapter_11, Debt, Financial Planning, Financial Planning Topics, Investments, Savings | Tags: , , , , , | Leave a comment

Wedding Costs and Marriage Success

Posted on February 7, 2015 by Melissa Hart

The average cost of a wedding is nearly $30,000 and the average engagement ring cost is about $5,500.  However, a high-cost wedding does not ensure a long-term marriage.  A study by two economists at Emory University concluded that “marriage duration is inversely associated with spending on the engagement ring and wedding ceremony“.

Other findings of the research included:

  • spending between $2,000 and $4,000 on an engagement ring was associated with a 1.3 times greater chance of divorce compared to spending between $500 and $2,000.
  • spending between $2,000 and $4,000 on the engagement ring was associated with two to three times the probability of reporting being stressed about wedding-related debt relative to spending between $500 and $2,000.
  • spending less than $1,000 on the wedding is associated with an 82 to 93 percent decrease in the chance of reporting being stressed about wedding-related debt relative to spending between $5,000 and $10,000. 

While money is important in marriage and life, being materialistic can result in relational difficulties.

For additional information on the wedding costs and marriage success, click here:

For the research paper, click here:

Teaching Suggestions

  • Have students research actions that may be taken to reduce wedding costs.
  • Have students interview people about their experiences related to planning a wedding. 

Discussion Questions 

  1. What financial difficulties might result from overspending for a wedding?
  2. How might a couple reduce weddings costs?
  3. Describe actions that might be taken to as alternatives for an expensive wedding.
Categories: Chapter 1, Chapter 2, Chapter 6, Debt, Financial Planning, Wise Shopping | Tags: , , | Leave a comment

What is your Personal Savings Rate?

Posted on January 31, 2015 by Melissa Hart

The average personal savings, as a percentage of income, in the United States, has averaged about five percent.  To calculate your own personal savings rate, take these steps:

  1.  Total your savings for the year, including non-retirement savings, personal retirement contributions, and employer retirement contributions. The amount could be negative if you took on more debt than the total of your savings.
  1. Determine your total income by adding your take-home pay (after subtracting income taxes) to the amount your employer contributed to your retirement account.
  1. Calculate the personal savings rate by dividing (1) by (2).

For additional information on personal savings rates, click here.

Also, to see information about savings rates and other statistics, click here.

Teaching Suggestions

  • Have students calculate their person savings rate.
  • Have students interview several people to determine actions that are commonly taken to increase a person’s savings rate. 

Discussion Questions 

  1. What actions might be taken to increase savings?
  2. Describe financial difficulties that may occur when a person has inadequate savings.
Categories: Chapter 2, Chapter 4, Financial Planning, Savings | Tags: , | Leave a comment

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