What is Your Debt-to-Income Ratio?

What is Your Debt-to-Income Ratio?
Eileen St. Pierre, The Everyday Financial Planner

family vacationAh, those lazy summer days. There are vacations to plan, theme parks to visit, summer sales to check out at the mall. All these activities cost money. It’s real easy to get in over your head. This spending can have a snowball effect, leading to a debt spiral that is hard to stop. The first step is to recognize if you have a debt problem.

Here are some warning signs:

  • You are stressing over money.
  • You have depleted or neglected your savings.
  • You are thinking about tapping accounts like your 401(k) that you have always considered off-limits.
  • You are starting to pay bills late each month.
  • You are making debt payments with your rent money.
  • Creditors are starting to call and send you threatening notices.
  • You are transferring balances from one credit card to another.
  • Every year you have to use your tax refund to pay your bills.

Calculate your debt-to-income (DTI) ratio:

  • Calculate the amount of debt you owe each month, including your mortgage or rent, car payment, and minimum credit card payments.
  • Divide this amount by your monthly income.

Here are some calculators that do the math for you:

If your DTI is 20% or less, you are doing an excellent job managing your debt! According to Gerri Detweiler, Director of Consumer Education at Credit.com, a DTI ≤ 36% is a healthy debt load to carry for most people. If your DTI is

  • 37% – 42%, that’s not bad but you should start focusing on reducing debt now before you get in real trouble.
  • 43%-49%, you need to take immediate action to avoid serious financial difficulties.
  • 50% or more, you have a debt problem. You need to seek professional help to aggressively reduce debt.

If you need professional help, check out these organizations:

Please read my column Choosing a Credit Counselor to make sure you do not choose an organization that will take advantage of you in your moment of need.

Visit my Debt Management page for more information.

The Pros and Cons of Using SoFi to Refinance Your Student Loans

The Pros and Cons of Using SoFi to Refinance Your Student Loans

Eileen St. Pierre, The Everyday Financial Planner

A friend of mine recently asked my thoughts about using SoFi to refinance student loans. SoFi was started in 2011 by four Stanford graduates to provide more affordable options to repaying student loans. Everything is pretty much done online. They have since expanded to mortgages and financial advisory services to keep their customers as clients as they move through life.

Here are my pros and cons of using SoFi to refinance your student loans.

money-case-163495_1280Pros

Like all things digital, it’s quick and you can submit an application anytime and in your pajamas. They do offer lower interest rates than their competitors and a 0.25% discount if you set up automatic payments. Humans are available if you need them.

Bottom Line: If you have very good credit (credit score above 700) and a high income (over $100,000), and your case is straightforward, you may have a good experience.

Cons

One of the advantages of having federal student loans (versus private loans) is that you get many protections with them. If you refinance at SoFi, you will lose these protections. SoFi is a private company. To keep your federal protections, you need to follow the federal student loan consolidation process.

If you lose your job or have a hard time paying your loan, SoFi only offers up to 12 months of forbearance. Their competitors offer longer periods.

Your credit score matters!

They perform a soft inquiry first based on the information you submit to them (which does not hurt your credit score) and give you an estimate.

  • After you fill out the application and formally apply, they perform a hard credit inquiry (which does affect your credit score) and verify all your information.
  • What they actually give can be much different from what they originally quoted.
  • This has led to a lot of negative reviews. Of course, these people may not have been upfront about their information.

Bottom Line: Like all lenders, they will verify your information. If you are considered a risk, you will pay more. Many applicants have complained about their documents getting lost, not handled properly, or not interpreted properly. This is what can happen when you do things digitally.

Remember, SoFi was created by Stanford graduates. It’s not for those borrowers who need the help most – those who never finished their college degrees, are saddled with high levels of private loans, have screwed up paperwork, and are un- or underemployed. If we can find a way to help these student loan borrowers, then our society will really be better off.

 Get more info!

Student loans will cost more next school year

Student loans will cost more next school year
Eileen St. Pierre, The Everyday Financial Planner

The Federal Reserve has started raising interest rates again. What does that mean for student loans? In August 2013, Congress passed legislation pegging the interest rate on Direct loans to the 10-year Treasury note. Every July 1, student loan rates are updated.

student loan pictureIf you take out a student loan for the 2017-2018 school year,

  • The interest rate on a Direct (Stafford) undergraduate loan will be 4.45%, up from 3.76%.
  • The interest rate on Direct (Stafford) loans for graduate students will be 6%, up from 5.31%.
  • The interest rate on Direct PLUS loans for parents and graduate students will be 7%, up from 6.31%.

These are fixed rates, so once you accept the loan, the rate is set.

  • This means that rates on your existing student loans will not change.
  • If you take out a loan for the 2017-2018 school year, these rates only apply to those loans.
  • However, if you need to take out another loan in future years, you may have to pay even more. The Federal Reserve is expected to keep raising interest rates.

For one $10,000 loan repaid in 10 years, this increased cost will probably be less than $500 over the life of the loan. That’s not too bad. What makes it a bad deal is if you keep taking out loans and/or take too long to pay the loan back.

That’s when you need some strong financial guidance to understand what you are getting yourself into before signing the loan papers. Visit my post K is for Knocking Out Student Loans for information on different repayment plans, how to pay off your loans faster, and the consequences of defaulting on your loans.

More information can be found at my College Planning page.

Free Webinar: Negotiating Webinar Bills

Free Webinar: Negotiating Medical Bills
Eileen St. Pierre, The Everyday Financial Planner

After a five month hiatus, I am once again giving my free monthly webinar for the Choctaw Nation’s Asset Building Program. Join me on Thursday, May 18 from 3:30 to 4:00 (Central Time).

Summary

It happens to all of us. At some point in our lives we will incur high medical bills. It’s important to understand how much your insurance will cover, what you are expected to pay, and what happens when you don’t pay your bills. Join us for this free webinar to learn about negotiating medical bills. Topics covered include:

  • Determining the impact on your budget.
  • Setting up payment plans.
  • Asking for a settlement or discount.
  • Applying for financial assistance.
  • Avoiding negative impacts on your credit score

Click HERE to register. Upcoming webinars include “Which Bill Should I Pay First?” in June and “Back-to-School Budgeting” in July.

Choctaw CAB

Top Ten Reasons to Save for a Rainy Day

Top Ten Reasons to Save for a Rainy Day
Eileen St. Pierre, The Everyday Financial Planner

I am sitting in my office on a stormy Friday in Oklahoma (no tornadoes as of yet) trying to get inspired to write. It’s a good time for another top ten list. Here are my top ten reasons to save for a rainy day. Enjoy!

  1. Need the money to do something fun while it’s pouring buckets outside.
  1. Roof is leaking again…guess it’s time to finally fix it.
  1. Stupid rain fade – can’t watch satellite TV – have to get cable.
  1. Feeling frisky??
  1. My old car won’t start.
  1. Rain is as good of a reason as any to buy new shoes!
  1. Just two words – Amazon Prime.
  1. Our landscaping just washed down the street.
  1. Your kid was playing in a puddle, slipped, and broke his ankle.
  1. Have you seen how terrible people drive in the rain?

Remember,

april-showers-bring-may-flowers-clip-art-eiMKMxB6T

 

 

 

 

 

 

 

Happy Spring from The Everyday Financial Planner!

Three Tips for Handling Medical Bills

Three Tips for Handling Medical Bills
Eileen St. Pierre, The Everyday Financial Planner

One hospital visit or procedure can turn your budget upside down. If you have an emergency fund, it will drain it quickly. Financial experts will tell you to read your health insurance policy and make sure you know what it will and will not cover. But life has a way of disrupting the best laid financial plans. You may not have time to research which hospital or clinic is most affordable or right for your situation. An emergency is just that.

medical billsOnce the bills start coming in, it is important to get a handle on them. Here are three tips:

  1. Know how many bills you can expect to get.

I needed to get a CT scan and a MRI last year. I got three bills for this one trip to the hospital:

  • A fee for using the equipment from the hospital.
  • A bill from the technician (an independent contractor) for performing the procedure.
  • A bill from the physician (also an independent contractor) for creating the report sent to my doctor who never looked at it.

If I had also needed lab work done, there would have been a few more bills.

Can you imagine all the bills that would arrive if you need an operation? This MRI/CT scan led to two surgeries for me. I had to create a special folder to keep all the bills organized. There were bills from providers who I never knew were involved in my surgery. How can I dispute these bills? I was unconscious!

  1. Call your medical provider to make financial arrangements.

I had the money saved to cover the medical bills from my surgeries. But I knew from counseling others that I could set up a 0% payment plan with the hospital. All I had to do was call them. After making just one payment, they offered me a discount on the remaining balance if I would pay it in full. I jumped at this offer and ended up saving almost $1,400.

Be honest if you are having trouble paying. Many hospitals offer charity care. You will need to apply for it. The amount of charity care you are offered depends on where your income falls as a % of the federal poverty level.

  • The hospital knows if you have a large out-of-pocket expense left to cover.
  • Be prepared for someone to visit you in the hospital to discuss any programs you may be eligible for to help you pay.
  • If you don’t feel comfortable discussing the subject at the time, ask for a contact number to call after you are released. Don’t sign anything if you aren’t well enough to understand what you are signing.
  1. Don’t let medical bills hurt your credit score.

Medical debt only hurts your credit score when it becomes 90 days past due. That’s when it goes to collections. If you still don’t pay, the holder of the debt may take you to court and get a judgment against you. Then your wages may be garnished or your bank account frozen. This negative information will stay on your credit report at least seven years.

The FICO 9 credit score gives less weight to medical debt in collections. However, many lenders do not use this credit score, particularly mortgage providers. The bottom line is to contact your medical providers before you are 90 days past due on your debts. They will work with you if you make the effort.

Visit my Debt Management page for more information.

Everyone is worthy of financial redemption

Everyone is worthy of financial redemption
Eileen St. Pierre, The Everyday Financial Planner

This Easter Sunday is the perfect time to deliver a very simple message. Everyone is worthy of financial redemption. You may have made some bad financial decisions in the past. Perhaps your financial problems were caused by a series of events that were not your fault. Regardless of the cause, it is not too late to fix things.

All you have to do is ask for help. Yes, it is hard admitting you need help. Financial counselors are not here to judge you. They want to help. If you are not willing to take responsibility for your financial problems, then financial counseling will not work. You have to be open to changing your financial behavior.

Improving your financial life will not take place overnight. It is a process. But there is light at the end of the tunnel if you are willing to look for it.

Faith

The St. Pierre Auto Insurance Checkup

The St. Pierre Auto Insurance Checkup
Eileen St. Pierre, The Everyday Financial Planner

Health-Insurance-2It’s like clockwork. Every six months the auto insurance comes due. This time around, my husband Jeff wanted to practice what he preached and trim our auto insurance coverage on his 1991 Chevy truck. One of his pet peeves is being over-insured. I concurred.

It’s ok to drop some coverages on older vehicles.

We dropped collision coverage on Jeff’s truck years ago. His view was “If I cause an accident, then I deserve to pay for it.” Jeff is the world’s best driver. He doesn’t cause accidents. I am perfectly happy being a passenger and letting him do all the driving.

  • If you are financing a vehicle, your lender will require you to have collision coverage with a maximum deductible amount. They do this to protect their collateral.
  • Once you pay off the loan, you can increase your deductible and lower your auto insurance payments.
  • Once the blue book value drops below a certain level, you are better off dropping collision coverage because the insurance company isn’t going to give you much for the vehicle. Take the money you save on insurance payments and put it in a savings account for a new vehicle.

How much will the insurance company really pay on an old vehicle?

This year, we decided to drop comprehensive coverage. This part of your policy covers damage caused by acts of nature and theft. Because the truck is now 26 years old, the insurance company would not give him much if it got caught in an Oklahoma hail storm. Jeff could get more money for it selling it damaged – he still gets complements on it. Even an old truck has value to someone.

Insurance companies never tell you to drop coverage.

Just for the heck of it, Jeff inquired about the medical payments coverage (MPC) on the truck. This coverage would pay the medical expenses of any passengers in the truck, in our case up to $10,000. While it’s not required under Oklahoma law, it can be useful to have.

In a prior post, I talked about how important it was for us to have MPC in Oklahoma. But it turned out that we never really needed it on the truck, just our every day vehicle. The truck is not driven that often and when it is, I am the only passenger. Apparently we’re both covered already since we have MPC on our other car. The insurance company never told us this.

This year’s auto insurance checkup will end up saving us about $100 a year.

The moral of this story is to ask questions about what you really need.

Many people still pay way too much for insurance. Remember, insurance is needed for high severity events. You need to weigh the cost of the loss with the probability of the loss. The best way to handle low severity losses is not by purchasing more insurance – it’s by building an emergency savings fund.

Visit my Basic Financial Management page for more information.

Do I still owe a penalty if I choose to go without health insurance?

Do I still owe a penalty if I choose to go without health insurance?
Eileen St. Pierre, The Everyday Financial Planner

Thinking man picThe failure of the House of Representatives to pass the initial Affordable Care Act (ACA) or Obamacare “repeal and replace” bill has left more questions than answers. As it stands now, the ACA is still in force. This means the individual mandate that requires all Americans to have health insurance still stands, unless you qualify for an exemption. However, an executive order signed on January 20 to reduce the burden of the ACA has made things a lot murkier.

You are now allowed to file a “silent” 2016 federal income tax return.

Before this executive order, the IRS was automatically rejecting 2016 returns where the taxpayer failed to indicate health insurance coverage. After the order, the IRS starting accepting “silent” returns where the box essentially goes unchecked. By not indicating whether or not you had mandated health insurance, taxpayers can avoid paying the penalty, also referred to as the shared responsibility payment. If you still plan on using a paid tax preparer to file your 2016 taxes (the deadline is April 18), keep in mind that not all preparers will file a silent return for you.

You are still required to pay the penalty.

Be prepared for the IRS to send you a notice, asking for more information regarding your health insurance coverage. You could also face an increased risk of audit. Depending on how the politics work out later this year, you may still have to pay the penalty. The IRS is not allowed to garnish your wages if you do not pay it, but they can deduct it from future tax refunds.

The penalty for not having coverage in 2016 can be steep.

The penalty is calculated two different ways – per person or as a % of income. You pay the higher amount:

  • $695 per adult + $347.50 per child under age 18, up to a maximum of $2085
  • 2.5% of household income, up to a maximum of the yearly premium for the national average price of a Bronze plan sold through the Marketplace

Expect things to get even more confusing as the open enrollment period for 2017 approaches this fall. I will do my best to keep you up to date.

Visit my Taxes and Health Care Reform pages for more information.

The Waitress, Her Spare Change, and a Trip to Vegas

The Waitress, Her Spare Change, and a Trip to Vegas
Eileen St. Pierre, The Everyday Financial Planner

Spring Break means vacations are starting. Recently my husband and I visited my family in Albuquerque. During a visit to our favorite breakfast place, we couldn’t help overhearing a waitress talking to one of her regular customers. She had saved all of her spare change for January and February – $200 worth. She was talking about using it to take a trip to Las Vegas.

Las VegasHer case highlights how simple change can really add up.

If she continues to save her change estimated at $100 a month, she’ll have $600 to spend on a July 4th getaway. If she keeps saving, she’ll have $1,100 to spend on Christmas gifts.

Can you think of how you would use an extra $100 a month?

Having a savings goal gets you more focused.

Our waitress talked about how long it had been since she took a vacation. This trip to Vegas means a lot to her. Who knows, perhaps she will start saving a few of those $1 bills in addition to her change to get a better hotel room. Maybe she’ll go online and search for hotel discounts and restaurant coupons. If she plans her itinerary she’ll get a better handle on her costs, and be able to enjoy her vacation more.

Set up a separate savings account and label it with your savings goal.

I have a feeling our waitress just puts all her spare change in a jar. But if you set up a separate savings account, you can automatically transfer a little bit over there every time you get paid. For all you online bankers, if you name that account with your savings goal (i.e. vacation, Christmas, new car), you will see it every time you make the transfer.

I started my business savings account in early 2014. I was amazed how quickly it grew. Turns out, I got used to never using the money I earned as The Everyday Financial Planner. Other work paid the bills. I used some to pay for my spine surgeries, but a good chunk remains. I turn 50 this year and my 25th wedding anniversary is coming up next year…

For more savings tips, visit my Basic Financial Management page.

4 Retirement Planning Tips for Women

4 Retirement Planning Tips for Women
Eileen St. Pierre, The Everyday Financial Planner

March is Women’s History Month. Regardless of their race, religion, or line of work, all women deserve to have a secure retirement. For many, retirement planning feels like a daunting task. Here are 4 tips to help you get started.

Pay Yourself First

Drinking coffee picAccording to the Walmart Moms Research Project, 39% prioritize saving for their children’s college over saving for their own retirement. Moms, it’s time to save for retirement first, then put any excess contributions towards saving for your children’s college educations.  While there are other ways for your kids to pay for college, you do not want your kids to have to support you in your retirement. Having your child pay some college costs will help him/her realize the value of his/her education.

Start Your Own Retirement Account

If you work, take advantage of your employer’s retirement plan. You can invest up to $1,500/month or $18,000/year (plus an additional $500/month or $6,000/year if you are age 50 and over). If your employer offers a match, invest enough to get the full match – that’s free money you are leaving on the table. If your employer does not offer a retirement plan, you can open up an IRA and put in up to $5,500/year (plus an additional $1,000 if you are over age 50).

If you are a stay-at-home Mom, you can still open up an IRA as long as your spouse has earned income. Both of you can put away $5,500/year (plus an additional $1,000 if you are over age 50).

If you are getting divorced, make sure your lawyer argues for a portion of your husband’s retirement assets. You are not automatically entitled to them. If your husband has an employer-provided retirement plan such as a pension or 401(k), your lawyer can petition for a Qualified Domestic Relations Order (QDRO) that tells the company’s plan administrator how to divide the plan assets between you and your ex-husband.

Keep a Portion Invested in Stocks

You want to make sure your retirement assets grow enough to cover all your expenses in retirement, especially if you started saving later in life. A simple yet conservative rule of thumb is to put (100-age)% in stock funds and the rest in bond funds.

  • If you are 45 years old, this means put at least 55% of your money in stocks and 45% in bonds.
  • If you got a late start towards retirement savings, you may want to invest a little more aggressively. Perhaps put (110-age)% in stocks and the rest in bonds. In the case above, our 45 year old would increase her allocation to 65% in stocks.

Understand Your Social Security Benefits

When it comes time to collect Social Security, you are entitled to the larger of: Benefits based on your own earnings record, or 50% of your husband’s benefit, even if you’ve never worked.

If you are divorced, you can claim 50% of your ex-husband’s benefit if it would be larger than what you would get based on your own earnings record. He will never know you are doing this unless you tell him. You are not required to tell him. Just remember that the following conditions need to apply:

  • You were married at least 10 years.
  • Both of you are at least age 62.
  • You will need to wait until you have been divorced for at least two years before receiving checks.

Take charge of your own retirement. Don’t rely on your husband, or anyone else, no matter how loving, to take care of you.

Visit my Retirement Planning and Financial Planning for Later in Life pages for more information.

Don’t Throw It Way, Part 2 – The Food Edition

Don’t Throw It Way, Part 2 – The Food Edition
Eileen St. Pierre, The Everyday Financial Planner

It’s been over four years since I first wrote my column Don’t Throw It Away. After reading a recent study by Hloom about financial waste in America, I thought it was time to write an update. This time I want to focus on food waste. My husband and I usually eat out twice a week. Look around and you’ll see people leaving uneaten food on their plates. It especially  bothers me to see college students doing this – the teacher in me wants to take them aside and give them a finance lesson. Take that half-eaten chicken fried steak home and make a nice sandwich for lunch at work the next day – you’ll be the envy of the office.

It’s universal – Americans feel they waste the most amount of money eating out.

According to Hloom, both women and men, Baby Boomers to Gen Xers to Millennials, and all income classes felt this way. If you are going to spend your hard-earned money eating out, please take home the food you don’t eat. Think about how much you spent on the meal.

  • Let’s say you paid $15 for dinner and normally pay $7.50 for lunch out.
  • You eat leftovers for lunch once a week, saving that $7.50.
  • At the end of the year, that’s $390 you’ve saved on lunches out.
  • Or another way to look at it, by not taking your leftovers home, you had to pay an additional $390 a year for lunches.

Can you think of a better use for that $390? How about an additional car payment or a weekend getaway?

Many people are not willing to reduce the amount of uneaten or expired food they throw away at home.

According to Hloom, uneaten and expired food is the biggest financial waste category (32%) Americans are not willing to reduce. Women, Millenials, and those in the middle class admit to wasting the most money on thrown away food. On average, this amounted to $265 a year (I got a feeling the number is a lot higher).  Add this to the money wasted eating out, and you’re up to $655 wasted for the year!

  • At a minimum, keep a mental inventory of what food you have on had.
  • Before you start buying food that expires or goes bad quickly, plan your menu for the week. Why buy a bunch of broccoli or lunch meat if you don’t plan on using it that week?
  • Before you throw out the heels of the bread because no one will eat them, think about all the work that went into growing, harvesting, and milling the wheat into flour for the bread. Then someone had to bake the bread. Someone had to deliver it to the grocery store. Make some toast or home made bread crumbs while you ponder this.
  • Just because the expiration or “best by” date has passed doesn’t mean it’s not edible. Use some common sense folks.

Food waste pictureWhen I sit down with clients and create a budget for them, the biggest unknowns are how much money they spend on groceries and meals eaten out. By getting a handle on these expenses, you can really increase your monthly cash flow. That in turn makes for a much more stress-free life.

For more budgeting tips, visit my Basic Financial Management page.

Save Automatically: America Saves Week Begins Tomorrow

Save Automatically: America Saves Week Begins Tomorrow
Eileen St. Pierre, The Everyday Financial Planner

As a rule, I always write my own blog posts, but this week I am breaking my rule.  Here is Tammy Bruzon from America Saves  with Simple Steps to Save Successfully During America Saves Week 2017.

America Saves 2017

America Saves Week (February 27 – March 4, 2017) is an annual opportunity for individuals to assess their savings and take financial action. Each year, we encourage savers – or potential savers – just like you to set a goal, make a plan, and save automatically.

This America Saves Week, try these five simple steps to help yourself save automatically – and successfully:

  1. Assess Your Savings
    Like your health, you should assess your savings annually to make sure your savings priorities are on the right track. Complete this simple 12-question assessment to find out your current standing and help you plan for the future.
  2. Evaluate your Savings Preparedness 
    Check off your savings accomplishments on the Saver Checklist to further evaluate where your savings habits need strengthening for your future goals.
  3. Take the America Saves Pledge
    Those with a savings plan are two times as likely to save for emergencies and retirement than those without one. Join more than 500,000 American Savers who have already committed to save. When you take the pledge, you can choose to receive text message tips and reminders to help you save towards your goals.
  4. Share Your Savings Goal
    Take part in the 2017 #ImSavingFor photo contest. Share a selfie or video that shows what you’re saving for on Facebook, Twitter, or Instagram. Then check americasaves.org to learn more about contest entry details and prizes. Savings never looked so good.
  5. Make Your Savings Social
    Are you on Twitter or Facebook? Join America Saves and the American Savings Education Council in encouraging your friends, family, and colleagues to save this week. Better yet, join one of the many Twitter chats that America Saves will be a part of this week to get real-time savings tips and advice.

 America Saves Week is coordinated by America Saves and the American Savings Education Council. Started in 2007, the Week is an annual opportunity for organizations to promote good savings behavior and a chance for individuals to assess their own saving status.

This annual savings campaign also includes Military Saves Week, a special outreach effort at our military installations here in the U.S. and around the world.

For more help on saving money, visit my Basic Financial Management page.

Hey lawmakers – the CFPB has done a lot of good!

Hey lawmakers – the CFPB has done a lot of good!
Eileen St. Pierre, The Everyday Financial Planner

I’ve lost count of all the times I’ve found myself yelling at a computer or television screen about a group (from either side of the political spectrum) bashing some kind of government program/law and demanding its repeal. There are good and bad parts to most laws. Before we decide that a law is simply terrible needs to go, we need to educate ourselves on all the facets of the legislation before making the decision. Can we keep the good parts and tweak the bad?

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 is one such law. It is a huge piece of legislation with many parts. One part created the Consumer Financial Protection Bureau (CFPB). I’m not an expert on Dodd-Frank, but what I can tell you is that I have seen first hand the good things done by the CFPB.

Many Republicans don’t like the CFPB because it has a single director who is very difficult to fire. They wanted a 5-member commission instead because they felt it would be more accountable. Supporters of the current system say that having one decision maker makes it easier to get stuff done. Sound familiar?

Let’s put politics aside. I just want to list some of the good that I have seen the CFPB do in the 6 years it’s been around:

  • To date, the CFPB has received over 1 million complaints from consumers. If you have ever felt at the end of your rope when dealing with a company over a financial issue, it is nice to have some one you can contact that actually has the power to do something. I have referred many clients to the CFPB complaint process
  • I have heard from military service members who have been personally contacted by the CFPB investigating their complaints. The CFPB has protected our nation’s finest from lenders abusing the military allotment system and using abusive debt collection practices.   
  • It was a complaint submitted to the CFPB that led to the discovery of Wells Fargo secretly opening unauthorized accounts.
  • The CFPB is in the process of suing the largest student loan company for failing students at every stage of the repayment process.  
  • $11.7 billion has been returned to customers through cancelled or reduced debts and direct payments from offending companies.
  • cfpb_tax-prep_share_fbThe CFPB puts fines it receives into a special fund called the Civil Penalty Fund that it uses to pay consumers if an offending company cannot pay. It also uses the fund for educational purposes.

If lawmakers can think of a better system to help consumers, I’m willing to listen. Just acknowledge that the CFPB has done some good – is that too much to ask?

 

Consider using your talents to help our service members

Consider using your talents to help our service members
Eileen St. Pierre, The Everyday Financial Planner

“Thank you for your service.” We say this a lot to service members and veterans. Then many of us walk away. How many of us have remained, and used our talents to help our service members? Almost four years ago I left career #2 to start The Everyday Financial Planner working for myself. So far, it has been more of a part-time job. I’ve found myself spending most of my time providing financial counseling services to the military. I really, really enjoy it.

Here are some tips on becoming a subcontractor or employee for a military contractor:

Get certified in your area.

This is the starting point. Determine what you are good at, and then find out how you can get certified or provide the federal government with a way of validating your expertise. In my case, becoming a Certified Financial Planner (CFP®) was what I needed. Other certifications such as the AFC® and ChFC® were also acceptable. I then looked on the job boards that cater to job seekers with these credentials and found federal contractors offering personal financial counselor jobs. Being on LinkedIn also helps – I have been contacted by various recruiters.

Be prepared to travel to service members.

You may live near a military installation but many of us do not. You need to have an entrepreneurial spirit and not be afraid to travel to various military installations and centers. Some assignments may only be one day or over a weekend, and be close to your home. Others may be regional and last several months or a year. Some may have you travelling constantly. You may need to travel overseas.

I am fortunate in that my husband travels with me. However, some contractors may not allow family to come with you. It depends what you are doing.

Be flexible.

Boy, have I heard this a lot! This is a polite way of saying be prepared for anything. Your assigned duties may change. I remember being given an office to work out of, and by the end of the week it was being converted to a break room. I’ve counseled service members in a broom closet, where two chairs could barely fit and our knees were touching. I’ve been asked to work in the winter in a portable trailer without heat. Our service members have to work in these conditions and they never complain – so neither should I!

Remember also that contracts need to be extended or renegotiated. This means a military contractor may only be able to guarantee employment for a certain period of time. Ask when their contract year ends and when their contract is up for renegotiation.

Be ready when called upon.

Just like our service members, you will go through periods when you are not that busy. You need to be ready for when you become busy. The most rewarding assignment I have had as a military financial counselor was helping an Army brigade deploy to the Middle East. I worked non-stop for over a month getting my soldiers ready to go. Then felt their loss after they left when the base looked so empty. Then I got to help their families when the financial realities of deployment set in. What an amazing privilege!

Financial Mgmt PictureIf you are interested in becoming a personal financial counselor (PFC) for the military, we need you. The Department of Defense is introducing a new retirement system called Blended Retirement and we need PFCs to educate service members on their options.

Please email me at everydayfinancialplanner@gmail.com if you would like more information.