Financial Literacy- Parental Financial Abuse

For most of us our parents are the people who protect and take care of us. They are our first love relationship and they teach us what trust is all about. When we think of  “abuse” we may think of a physical attack from one person to another. But there are many types of abuse so I have decided to call this one “Parental Financial Abuse.”   My definition of “Parental Financial Abuse” is the act of one or both parents using their child’s identity as well as social security number to get credit and/or services in their name for the purpose of avoiding high deposits or being denied access to credit.  Usually a parent does this act to get services such as a phone or utilities and sometimes credit because they have ruined their own identity and made bad financial choices in the past. So in most cases their bad decisions continue on with the stolen identity and the child’s credit profile is also destroyed.   The sad part of Parental Financial Abuse is the victim in most cases does not even know of the abuse until years later when they themselves are ready to start a financial life. They are shocked when they apply for credit or services for school loans, an apartment or a vehicle.  Another hurtful outcome of this type of abuse is that it is actually a criminal act due to the identity theft and fraud laws.  But who wants to press charges against their own parents?   Recently, while working with many individuals and couples facing Parental Financial Abuse I have witnessed how violated this financial crime has made them feel. They are extremely angry, hurt, and baffled about what they should do to create a more stable financial life after such a catastrophe. They are also concerned about how to repair the trust and respect they once had for their parent, the perpetrator.   I never tell my clients exactly what to do, but I try to give them choices based on their individual scenario. The sensitivity of this situation requires me to operate with extreme caution. Here are a few of my options depending on the details and the time frame of the incident.   Talk to your parents about the situation before doing the following:   Contact the creditors and report the fraud Contact the police and make a report Seek out a repayment plan with your parents if the items are delinquent Write an “Explanation Letter” to the credit agencies explaining the fraud   In most cases parents are shameful of their actions while others may feels a sense of entitlement because you are their child. In either case, use your best judgment regarding the matter and I pray that everything works out for the best and that the relationship heals! Warm regards, Dina Harbour, Extraordinaire CEO & Host of Women Obtaining Wealth Women Obtaining Wealth Organization W.O.W. Conversations on Internet Radio, Sundays @ 9p EST Call-In # for show: (646) 478-5836 Stay Connected to W.O.W. download our customized toolbar today! Recommend Me!

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Financial Literacy - Back to the Basics With Budgeting

Every year I offer a free budgeting class be it on-line or at local libraries to help people get their finances in order. Although you hear many financial professionals giving the advice to others that they should create and stick to a budget, they never really explain how to actually accomplish this task. A budget basically tells your income what to do. You start with a 100% of your net income and then by priorities you need to subtract your expenses until the money is gone. Now here is the part that confuses some people. Certain categories should NOT exceed over a certain percentage of your income. Housing for instance should be no more than 35%, debt 15%, savings10%, charity/tithe 10%, and other 30%. You may have several categories that fit your particular family needs. The example in the paragraph above is just a snap short of a general budget. Regardless of which categories you might use most of us will have some basic ones like housing and food. If for any reason you are having trouble keeping up with your monthly expenses make sure you are paying your bills in this order: 1. Food 2. Housing 3. Utilities 4. Transportation 5. Insurance 6. Clothing 7. Other Remember if your housing exceeds 35% of your income you must address this discrepancy and if budgeting is still overwhelming seek out professional help. The goal of budgeting is to be able to pay all your expenses, save money and to live within your means. Warm regards, Dina Harbour, Extraordinaire CEO & Host of Women Obtaining Wealth Women Obtaining Wealth Organization W.O.W. Conversations on Internet Radio, Sundays @ 9p EST Call-In # for show: (646) 478-5836 Stay Connected to W.O.W. download our customized toolbar today! Recommend Me!

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Financial Literacy-Does Reaching For The Stars Mean Driving An Expensive Car?

I cannot help but notice that many working class people spend so much money on purchasing new expensive vehicles with payments that are exceeding more than 30-40% of their net income. In my hometown this scenario is not uncommon and I too got caught up in the nice, new, and expensive car charade in my twenties. Between movies, music videos, and friends my thought process at that time was that a nice car was a sign of success and status. It never occurred to me that my car was depreciating rapidly in value over time and by financing my cars I was doing the opposite of what “WEALTHY” people do. According to an article entitled "Knowing The Deal On Auto Depreciation" by Lucy Lazarony on average a vehicle loses about 12-15% of it's value per year and for a brand new car the depreciating value is huge. This happens because as soon as the person drives off the lot the car's value goes from retail to a wholesale price. When I started becoming what I call "financially focused" I made sure I paid cash for my car after I sold my home in 2004. Sure it wasn't a brand new car with that great luxury never touched smell, but I immediately became the owner and the title came directly to me. It was truly an accomplishment as well as a great empowering feeling. So now when I return home to visit family and friends I am always amazed at how many beautiful new luxury cars I see in the parking stalls of apartment buildings. I wonder to myself if the drivers of these beautiful cars realize that their monthly payments over time could have went towards the down payment of a home instead of being thrown away by what some call “dummy depreciation”? Warm regards, Dina Harbour, Extraordinaire CEO & Host of Women Obtaining Wealth Women Obtaining Wealth Organization W.O.W. Conversations on Internet Radio, Sundays @ 9p EST Call-In # for show: (646) 478-5836 Stay Connected to W.O.W. download our customized toolbar today! Recommend Me!

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Financial Literacy: Breaking The Cycle Of Being Broke

Now that I'm older I can look back on some financial decisions I've made and shake my head. Luckily for me I was able to break the cycle of "being broke." The sad part of my past is that I wasted so much time and money on things that had no REAL value.  It started with my first credit card at the age of 18 and escalated to cars and stupid material things in between. Being a financially responsible adult wasn't at the top of my radar. However being successful and looking the part was. So like many young adults I accepted the job that offered me the most money while purchasing the latest gadgets, designer clothing, and must haves. Hence, racking up consumer debt with things I really could not afford.  My weakness was cars. I decided to purchase one almost every year.  I did this by trading them in and carrying over the negative equity to the new vehicle. Doing these transactions was a form of financial rush in roulette in which I later learned a valuable lesson. But one of my ultimate car sins happened when I upgrading into a luxury vehicle by going into a lease agreement. It wasn't until I got tired of not having money after just getting paid or moving from apartment to apartment because I did not like the area or my neighbors that I realized I was doing something terribly wrong. I started looking around for answers and examples of the things that I TRULY wanted out of life.  I call these things my core goals.   I knew I wanted stability, which for me meant a home of my own, the second thing was a career doing something I was truly passionate about, and the third was to have enough money to help me achieve what I needed and wanted out of life without relying solely on borrowing money from banks, family or friends. My simple action steps begin at the library where I started reading about budgeting and saving money, next the book store, seminars, radio programs etcetera. The light switch came on when I heard the voice of Larry Burkett on the airwaves.  Mr. Burkett was one of the founders of Crown Ministries.  He passed away July 4, 2003, but his teachings will live on within many others and me. Suze Orman's tough and straightforward style put the "no excuse" motto in front of my "broke" mentality and I really got focused about being a financially empowered women.  I can name many others that helped me see the light but the two I mentioned were my first mentors and teachers. Luckily in my quest to be financially fit, I was able to brake the cycle as well as reach some of my core goals by finding security in my first home purchase, doing what I’m passionate about with writing and teaching others about financial literacy, saving, and giving money towards the things that I believe in. Throughout my journey I've learned that buying things that only decrease in value or that looks flashy in most cases are really not worth the money.  Find out what TRUE wealth means and start by educating yourself about money, it’s never to late! Warm regards, Dina Harbour, Extraordinaire CEO & Host of Women Obtaining Wealth Women Obtaining Wealth Organization W.O.W. Conversations on Internet Radio, Sundays @ 9p EST Call-In # for show: (646) 478-5836 Stay Connected to W.O.W. download our customized toolbar today! Recommend Me!

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Managing Mootherhood

A Mother is torn between raising her children, and going to school. She explains that both her husband and herself are working and going to school part-time. Meanwhile her 5 & 7 year old children are being raised by her parents. The demands of her job is such that she must work overtime twice a week. She will have no t...ime to spend with her kids.  What should she do? Warm regards, Dina Harbour, Extraordinaire CEO & Host of Women Obtaining Wealth Women Obtaining Wealth Organization W.O.W. Conversations on Internet Radio, Sundays @ 9p EST Call-In # for show: (646) 478-5836 Stay Connected to W.O.W. download our customized toolbar today! Recommend Me!

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With Friends Like These Who Needs Enemies

A friend loans her best friend 15K to pay taxes and avoid possible jail time. The friend pays about 3K back but now says she can no longer pay her friend. Seeing that the friend who borrowed the money has valuable antiques on her home, the friend ask her to sell them to pay the debt. The friend refuses. What should the friend that lend the loan do? Warm regards, Dina Harbour, Extraordinaire CEO & Host of Women Obtaining Wealth Women Obtaining Wealth Organization W.O.W. Conversations on Internet Radio, Sundays @ 9p EST Call-In # for show: (646) 478-5836 Stay Connected to W.O.W. download our customized toolbar today! Recommend Me!

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A Retired Couple Regreats Playing Banker To Their Son

Retired couple thought it was a good idea to finance a 540K mortgage for their son. Now, 5 years later he is behind on his mortgage payments as well as 3 years behind on his property taxes. Oh yea and he took out an equity line of credit for 50K and is behind on that loan as well. What should his parents do? Warm regards, Dina Harbour, Extraordinaire CEO & Host of Women Obtaining Wealth Women Obtaining Wealth Organization W.O.W. Conversations on Internet Radio, Sundays @ 9p EST Call-In # for show: (646) 478-5836 Stay Connected to W.O.W. download our customized toolbar today! Recommend Me!

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Debt After Divorce

Debt & Divorce A woman calls in on the Dave Ramsey radio show: My husband and I have been divorced for years. I recently got a collection letter stating that I owe money on our once joint Lowe's account. I never used this card but it was in both of our names. Am I still responsible for this debt? -YES Closing all JOINT accounts is an essential as well as important part of ending the marriage. Regardless of how your debts are divided in you Divorce Decree you will still be liable for any and all joint loan and/or credit card accounts. Make sure you close these accounts and stay on top of the payments until the debt is fully paid off. Remember if these debts go unpaid they can damage your credit scores and profile! Warm regards, Dina Harbour, Extraordinaire CEO & Host of Women Obtaining Wealth Women Obtaining Wealth Organization W.O.W. Conversations on Internet Radio, Sundays @ 9p EST Call-In # for show: (646) 478-5836 Stay Connected to W.O.W. download our customized toolbar today! Recommend Me!

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