Comparing Renting vs. Buying Your Home

Posted on June 11, 2016 by Melissa Hart

While more people are renting in recent years due to various economic and household situations, home ownership is still a financial goal for many.  A financial comparison between renting and buying often overlooks various factors.  An online calculator may be used to consider buying items such as the opportunity cost of investing your down payment (along with the taxes on capital gains), condo or home association fees, maintenance costs, and, of course, the tax benefits of property taxes and mortgage interest.  On the rental side, the calculator considers initial costs (such as a security deposit and any broker’s fee) along with the opportunity costs of the initial costs and recurring costs, such as renter’s insurance.

For additional information on calculating the renting vs. buying your home, click here.

Teaching Suggestions

  • Have students ask people to describe factors that affected whether they own or rent their housing.
  • Have students conduct a personal financial analysis for renting and buying a place to live.

Discussion Questions 

  1. What are benefits and drawbacks of renting and buying a place to live?
  2. Describe financial factors that might be overlooked when comparing renting and buying a place to live.
Categories: Chapter 7, Financing a Home, Home Buying, Wise Shopping | Tags: , | Leave a comment

Avoiding Payday Loans

Posted on June 4, 2016 by Melissa Hart

Payday lenders see borrowers as prey, people floundering in financial difficulty.

The Consumer Financial Protection Bureau is planning to release proposed rules related to loans and other short-term borrowing, such as auto title loans.  These efforts will include requirements that payday lenders make sure borrowers are able to repay the loans.

Payday loans are usually viewed as a temporary financial solution.  However, quite often borrowers need more time.  As a result, consumers get trapped in rolling over their debt and may be charged as high as 700 percent on an annual basis.  According to the Pew Charitable Trusts, 12 million Americans use payday loans each year, resulting in $7 billion of interest and fees.

For additional information on payday loans, click here.

Teaching Suggestions

  • Have students ask people to describe situations in which a person might use a payday loan.
  • Have students create a list of methods that might be used to inform others of alternatives to payday loans.

Discussion Questions 

  1. What are benefits and drawbacks of payback loans?
  2. What alternatives might be considered instead of a payday loan?
Categories: Chapter 4, Financial Services | Tags: | Leave a comment

Ways to Reduce Environmental Impact and Save Money

Posted on May 28, 2016 by Melissa Hart

To save money and help improve the environment, 20SomethingFinance.com suggests that you:

  • grow your own food and buy from local sources.
  • replace meat in meals with beans and vegetables.
  • bring your own containers to buy bulk items.
  • use refillable drink bottles.
  • ride a bike instead of driving.
  • use a low-flow showerhead.
  • sell items not being used; buy used items instead of new.

For additional information on saving the environment and money, click here.

Teaching Suggestions

  • Have students ask people to describe environmental-saving actions commonly used.
  • Have students create a promotional plan to create awareness of money-saving actions that are also environmental friendly.

Discussion Questions 

  1. What are benefits and drawbacks of environmental-saving actions?
  2. What factors might be considered when taking actions that save money and improve the environment?
Categories: Budget, Chapter 2, Chapter 6, Purchasing Strategies, Wise Shopping | Tags: , | Leave a comment

Fraudulent Debt Relief Operation

Posted on May 14, 2016 by Melissa Hart

The Federal Trade Commission (FTC) has charged a debt relief company with falsely representing to financially distressed homeowners and student loan borrowers that it would help get their mortgages and student loans modified.  At the FTC’s request, a federal court has temporarily halted the operation.  The FTC seeks to permanently stop the alleged illegal practices and obtain refunds for affected consumers.

According to the FTC’s complaint, Good EBusiness LLC deceptively marketed home loan modification services and illegally charged an advance fee of 1,000 to $5,000.  The agency alleges that the company falsely claims that it can lower monthly mortgage payments, reduce mortgage interest rates usually within a few months, and falsely promise full refunds if they fail.  The FTC’s complaint also alleges that Good EBusiness, using the names Student Loan Help Direct and Select Student Loan; Select Student Loan Help LLC; Select Document Preparation Inc.; illegally charged a fee of $500 to $800 for student loan relief services.

For more information, click here.

Teaching Suggestions

  • Ask students to make a list of sources they may rely on for help when they are overburdened with debt problems.
  • What questions should you ask in finding the best credit or debt counselor?

Discussion Questions

  1. Which federal consumer credit law regulates debt collection practices and what are its major provisions?
  2. What options of solving credit and debt problems are available to individuals?
Categories: Chapter 5, Debt, Frauds and Scams | Tags: , | Leave a comment

Beware of Illegal Student Debt Relief Schemes

Posted on May 7, 2016 by Melissa Hart

In March 2016, the Consumer Financial Protection Bureau requested a federal court to shut down a student debt relief company that charged borrowers millions of dollars in illegal upfront fees and for federal student loan services.  The court order would also require the company, Student Loan Processing.US, to pay refunds to thousands of harmed consumers and civil money penalty.  If the proposed judgement is entered by the court, the company must:

  • Shut down illegal operations: Student Loan Processing.US must shut down all operations within 45 days of the entry of the court’s judgement.
  • Cancel all contracts with consumers and stop charging them.
  • Pay consumer refunds.
  • Stop participating in the debt relief and student loan industries.
  • Ensure student loan borrowers do not miss important repayment benefits.
  • Pay a civil penalty.

For more information, click here.

Teaching Suggestions

Discussion Questions

  1. How can you protect yourself from companies engaged in deceptive marketing practices, or otherwise violate federal consumer protection laws?
  2. Is it possible for government agencies to permanently shut down companies that defraud consumers?
Categories: Debt, _Appendix A | Tags: | Leave a comment

Protecting Your Privacy and Security When Making Mobile Payments

Posted on April 30, 2016 by Melissa Hart

For most consumers, the biggest benefit of mobile payments is convenience.  No need to pull out your wallet for cash or plastic—especially if you’ve got your phone at hand anyway.  No need to type your payment information to buy online.  But what if your financial and other personal information isn’t safe?

Security is important since you usually carry your mobile device with you, it’s on most of the time, and it may contain sensitive information.  Consumer Federation of America (CFA) offers advice on how to avoid security pitfalls, what features keep your mobile device and your payments safe, and how to prevent others from making mobile payments without your permission.

For more information, click here.

 Teaching Suggestions

  • Ask students to read the privacy policies of the companies whose services they are using to make mobile payments.
  • What are your options if you don’t like a company’s privacy policy?

Discussion Questions

  1. Should you voluntarily provide information that is not necessary to use a product or service or make a payment?
  2. Why is it important to use extreme care when you use free public Wi-Fi?
Categories: Chapter 5, Credit Cards | Tags: , | Leave a comment

Securities and Exchange Commission (SEC) Warns of Government Impersonators

Posted on April 23, 2016 by Melissa Hart

The SEC has issued an investor alert warning people about fraudulent solicitations that purport to be affiliated with or sponsored by the Securities and Exchange Commission.

The SEC does not endorse investment offers, assist in the purchase or sale of securities, or participate in money transfers.  SEC staff will not, for example, contact individuals by telephone or e-mail for purposes of:

  • seeking assistance with a fund transfer
  • forwarding investment offers to them
  • advising individuals that they own certain securities
  • telling investors that they are eligible to receive disbursements from an investor claims fund or class action settlement; or
  • offering grants or other financial assistance (especially for an upfront fee).

If you receive a telephone call or e-mail from someone claiming to be from the SEC (or other government agency), always verify the person’s identity.  Use the SEC’s personnel locator, (202) 551-6000, to verify whether the caller is an SEC staff member and to speak with him or her directly.  In addition, you can call the SEC at (800) SEC-0330 for general information, including information about SEC enforcement actions and any investor claims funds.

For more information, click here.

Teaching Suggestions

  • Ask students to visit other websites, such as, consumer.gov and investor.gov for additional tips on investing wisely and avoiding fraud.
  • Ask students to find a list of international securities regulators on the website of the International Organization of Securities Commissions (IOSCO) and a directory of state and provincial regulators in Canada, Mexico, and the U.S. on the website of the North American Securities Administrators Association (NASAA).

Discussion Questions

  1. What actions can you take to protect yourself from government imposters?
  2. What are the tell-tale signs that an impersonator is contacting you to steal your financial information?
Categories: Chapters, Frauds and Scams, Identity Theft | Tags: , , | Leave a comment

Tips and tricks for Impulse purchases

Posted on April 9, 2016 by Melissa Hart

You are in line at your local grocery store and all the snacks, candy, and cheap gadgets are beckoning to be picked up and added to your shopping bag.  You are shopping on-line and you only need to spend $8 more to get free shipping.  How do you avoid falling prey to impulse buying?  How are marketers reducing friction to get you to buy more stuff?  As a consumer, factoring in additional transaction costs will help you avoid making impulse purchases.

The following article provides way to help you avoid adding impulse purchases, such as:

  1. Carrying cash.
  2. Making it a struggle to get out your credit card.
  3. No more one-click purchasing.
  4. No more e-tailer memberships.
  5. Having an accountability buddy.

Teaching Suggestions

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

  • Stress the importance of carefully watching your spending.
  • Have the students record all purchases for one week and see how much money is spent by the class in total on impulse purchases.
  • Stress the importance of having a budget and sticking to it.

Discussion Questions

  1.  Ask students to recall a time when they were able to resist the urge to make impulse purchases. What were some techniques that they used?
  2. Poll students about e-tailer memberships, such as Amazon. Why did they choose to acquire the membership?  Free shipping? On-demand viewing options.
Categories: Budget, Chapter 6, Financial Planning, Wise Shopping | Tags: , | Leave a comment

Want to save money on gas?

Posted on April 2, 2016 by Melissa Hart

Gas prices have been low for a few years but, it is always good to save a few more dollars!

What if you are in a new city?  Gas prices can vary by 10-15 cents per gallon in a matter of a few blocks.  How would you know where to find the cheapest gas?  Good news!  The GasBuddy app can help you find the best prices on the go.

Use this article to help you save gas money near home or away.

Did you know that you can?

  1. Use apps to find the best prices no matter where you are.
  2. Get cheaper gas by buying at certain times of day.
  3. Improve your driving and save gas money.
  4. Maintain your vehicle and save gas money.
  5. Get more rewards with your gas prices.

Teaching Suggestions

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

  • Stress the importance of saving small and large amounts of money.
  • Calculate the miles a sample of students have driven in the past year and multiply by varying amounts saved (5-15 cents per gallon) to demonstrate the dollar savings potential.
Categories: Budget, Chapter 6, Financial Planning, Wise Shopping | Tags: , | Leave a comment

Home Mortgage Calculator

Posted on March 26, 2016 by Melissa Hart

“Finally, simple mortgage calculators that anyone can use.”

The mortgage calculators on this website can help home buyers estimate how much their monthly payments will be when they purchase a home.  To use the calculator, enter the following information and then click “Calculate.”  It’s that simple.

  • Home Value
  • Loan Amount
  • Interest Rate
  • Loan Start Date
  • A Percentage for Property Tax
  • A Percentage for Private Mortgage Insurance

In addition, there is information to help homebuyers compare a 30-year and a 15-year mortgage, make a rent or buy decision, and valuable information about other home purchase decisions.

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 finding the right mortgage when purchasing a home.
  • Calculate monthly home mortgage payments when different interest rates are chosen.
  • Illustrate the difference for the total repayment amount and monthly payment amount when the home buyer chooses a 15 year or 30 year mortgage.

Discussion Questions

  1. How important is choosing the right mortgage when you buy a home?
  2. Using the mortgage calculator at http://www.mortgagecalculator.org, determine the monthly payment for a 30-year loan for $180,000 if the interest rate is 5 percent. Assume the home purchase price is $210,000, property tax is 1.5 percent, and the PMI is 0.5 percent.
  3. What is the monthly payment for the above loan if the interest rate decreases to 4 percent? Over the 30-year period, how much did you save if the interest rate is 4 percent compared to 5 percent?
Categories: Chapter 7, Home Buying | Tags: , , | Leave a comment

Blog at WordPress.com.