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

Ongoing Career Assistance

Posted on February 11, 2015 by Melissa Hart

Offering career information on a daily basis, SmartBrief on Your Career provides brief summaries and links to articles and other information.  These resources cover topics ranging from resumes and interviews to leadership and effective communication.  This service would be of value to those looking for their first job as well as seasoned professionals with a desire for ongoing career advancement. 

For samples of SmartBrief on YourCareer and to sign up, click here:

Teaching Suggestions

  • Have students conduct online research to determine the most valuable websites for keeping up to date on career planning activities.
  • Have students select an online career source and create an elevator speech with a summary of the information presented. 

Discussion Questions 

  1. What topics might be most valuable for keeping up to date with career planning?
  2. Explain how social media might be used for career planning activities.
  3. Describe how career information needs differ between entry-level employees and those who are at an advanced stage of their careers.
Categories: Career, Career_Appendix | 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

The Case Interview

Posted on February 4, 2015 by Melissa Hart

In many types of job interviews, a person will encounter decision-making situations.  A case interview is one example, in which a prospective employee has the opportunity to demonstrate a capacity to think in a structured, creative manner when presented with a real-world problem.

When involved in a case interview, consider these actions:

  1. Carefully read the case to understand the background and the main problem of the situation.
  2. Plan a framework to organize your analysis and to show the relationship among key issues.
  3. Prepare alternative courses of action to show varied approaches and versatility in thinking.
  4. Use evidence to support your analysis and suggested actions.
  5. Clearly communicate your analysis process, conclusions, and recommendations.

For improved success in a case interview:

  • prepare by using practice cases online and researching the organization’s culture.
  • talk with people who have experienced the case interview process.
  • ask questions of the interviewer to clarify key points.
  • stay focused on the key question for the situation and main issues.
  • avoid stock answers; popular frameworks and buzzwords may not be appropriate.
  • emphasize the process, analysis, and actions rather than finding the “right” answer.
  • prepare by researching current business events and organizational trends.
  • practice the process with others who are willing to help.

For additional information on case interviews, click on the following links:

Case Interview Prep Guide

Interview Prep_McKinsey

Video-Preparing for a Case Interview

Teaching Suggestions

  • Have students describe business situations that might be the basis of case interviews.
  • Have students create possible responses for potential case interview situations that they might be asked when applying for a job.

Discussion Questions 

  1. For what types of employment positions might a case interview be used as part of the selection process?
  2. Explain how case interviews help employers select the best candidate for a job.
  3. What actions should be taken to prepare for a case interview?
Categories: Career, Career_Appendix | 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

Free Credit Scores

Posted on January 28, 2015 by Melissa Hart

“Free credit scores” sounds good, right?  But what if you signed up for “free credit scores,” then found out you were enrolled in a credit monitoring program that costs $29.95 per month?  Not so good.  That’s what the FTC says happened with a company called One Technologies, Inc.  Now the company has agreed to settle the FTC’s charges that it misled consumers by advertising “free credit scores” but failing to tell them that they would be enrolled in a credit monitoring program for a monthly fee.

One Technologies, Inc. offered people “free” online access to their credit scores through at least fifty websites, including freescore360.com, freescoreonline.com , and scorescense.com.  But according to the FTC, the company didn’t clearly inform people that once they got their score, they would pay $29.95 per month for a credit monitoring program.  You could only get out of that monthly fee by calling to cancel.  Some people had to call multiple times.  Others were denied refunds.  One Technologies, Inc. will pay $22 million to compensate its customers and must get their consent before billing them.  Also, it must provide the customers with an easy way to cancel.

For additional information, click here.

Discussion Questions

  1. What can you do if you become victim of a deceptive marketing practice?
  2. Where can you get your free credit report at least once every year?

Teaching Suggestions

  1. Ask students to obtain their credit reports from Experian, TransUnion, and Equifax.
  2. Ask students to search the Internet for “free credit scores” and summarize their findings.
Categories: Chapter 5, Credit Scores, Frauds and Scams | Tags: | Leave a comment

Refinancing Loans: Not Just for Mortgages

Posted on January 24, 2015 by Melissa Hart

Most people know they can refinance a mortgage—that is, replace an existing loan with a new one that may offer better terms.  But did you know you can also refinance personal loans, including auto loans, credit cards and student loans?

“Refinancing a personal loan may save you money, especially if you get a lower interest rate, a lower monthly payment or other benefits,” notes Susan Boenau, Chief of the FDIC’s Consumer Affairs Section.  “However, refinancing does not always equate to saving money or better terms.”

Understand potential pitfalls in refinancing a personal loan.  For example:

  • You may have a higher APR than what you were originally paying when the promotional rate ends.
  • Closing a credit card account also reduces your available credit and may adversely affect your credit score.
  • A balance transfer may result in your account having multiple interest rates.
  • You may be assessed a prepayment penalty if you refinance a loan before it matures.
  • If your credit score is low, wait to refinance until you can raise it.

For more information, click here.

Teaching Suggestions

  • Ask students to prepare a list of similarities and differences between a home equity loan and refinancing personal loans.
  • Ask students to use the Internet to obtain information about refinancing.

Discussion Questions

  1. What are the possible advantages and disadvantages of refinancing?
  2. What are your legal remedies if a credit reporting agency engages in unfair reporting practices?
Categories: Chapter 5, Debt | Tags: | Leave a comment

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