Investing Mistakes that Will Lose You Money or Make You Cry

Over the past eleven years, I’ve seen many mistakes in the world of investing. I’ve certainly made a few myself. In just this short period of time, we’ve had the tech run and subsequent collapse. There was 9/11 and the pullback related to that. There was the emergence of BRIC (Brazil, Russia, India, China) as well as other emerging markets. Most recently there was what I like to call the Crash of ’08.

Throughout this roller coaster ride, some people have been wiped out by the fluctuations, where others have been very successful. Some of this has to do with luck, both good and bad, but a large portion of this has to do with knowledge and awareness. The mistakes listed below are not in any particular order. They each have their own sharp teeth that have taken very large bites out of portfolios.

Chasing Historical Returns

There’s a saying in the financial world, “Yesterday’s winners are today’s losers.” One major mistake made constantly in the financial world is the act of chasing performance. Investors who do this usually get burned twice on the same investment.

For example, in 1999, the ING Russia Fund was created. In the first year it was up almost 160%. Many investors started to rush into it in the second half of the year, and while they did get some of that big upswing, not nearly the whole thing. In 2000, the fund was down almost 18%. These same investors rush out of the fund at either a loss or a somewhat small gain. In 2001, the fund was up 80%. Generally those who chase performance don’t stick around long enough to actually enjoy it.

Misjudging Risk Tolerance

What do you see when you look in the mirror? Do you see someone who base jumps off of high rises and does stunts on motorcycles while doing 100mph on the freeway? Or do you see someone who brings their own anti-bacterial wipe to clean a restaurant chair? Can you be honest with yourself when you stare at that person in the mirror?

Another big mistake is when people can’t be brutally honest with themselves in regards to risk. It is very easy for someone to say they are an aggressive investor when the market is up 15%. However, when the market is down 12% and that person’s portfolio is down 20%, it’s usually a different tune they are singing. Investors must realize the reality of these risks. If you can’t sleep at night when the market is down, then you need to be more conservative.

Listening to Bad Advice

How many times have you heard this line, “My brother-in-law got this stock tip…” Choosing an investment because your brother-in-law, college roommate, pharmacist, etc., told you about it has disaster written all over it. You must do your own due diligence or hire a professional to do it for you.

I remember back in the late 90’s before the bubble burst on techs, a colleague of mine told a friend of his to buy this great stock called Lucent. He had purchased it at $35/per share and doubled his money. His friend purchased the stock at $81. It doesn’t take a lot of effort to find out what has happened to the company since…and that’s about how well the friendship is doing as well.

Lack of Diversification

There was a client of mine not so long ago that was a MCI WorldCom employee. She had worked for them for almost 20 years. She invested in her 401K up to the maximum allowed every year.

She was building a very nice retirement for herself through the 90’s. When the bubble burst and her company disappeared, so did over 80% of her nest egg. She had been putting the bulk of her money in WorldCom stock…

This is a good example of why diversification and asset allocation are so important. A properly allocated portfolio will take a hit in a bad market, but can generally weather the storm much better than a portfolio that has the bulk of it in one asset or type of assets. An investor should try to avoid having more than 10% of their portfolio in any one individual stock, bond, or other holding.

Listening to Media Spin

Booyah!!! Jim Cramer, the CNBC crew and any other station or website are there to provide you with news, but we all know what kind of news sells…the bad kind. There’s a reason why Britney Spears is on TV every other day. Everybody wants to watch a train wreck.

An investor must be able to filter through all of the “noise” and use the right information when trying to make an investment decision. Using what you hear on TV or read on an investment site can be very helpful, but it is not a substitute for your own due diligence.

There are many more mistakes that can be, and have been made. The two biggest enemies to investing are fear and greed. The third is ignorance. Make sure you understand what you’re buying before you make the decision to do so.

Contributed by Victor Alfieri

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Wanted: One Full Time Mother

Job Description
Seeking one full time mother to raise a baby. No experience necessary.

Screening Process
The job requires an initial nine month screening process during which you’ll be puking, uncomfortable, and sometimes miserable while carrying a baby to full term. Your body will do things you didn’t think possible and the nine months will end with some of the worst pain you’ve ever experienced.

Required Skills
Here are the skills necessary to be considered for the job of full time mom.

• Change diapers at any time of day or night
• Decipher baby’s cry and calm crying baby
• Setup & organize a baby’s room
• Cook with a kid on your hip or under your feet
• Fast cleaner, able to clean entire house before kid starts making next mess
• Shop for bargains on kids clothes, diapers, etc
• Keep kid entertained with non stop activities
• Ability to discipline kid
• Must teach kid to walk, talk count, eat with silverware, use the toilet, & be polite
• Whatever else is necessary to keep kid alive, healthy, and happy…

Job Hazards
This job will not be easy, you will have to endure:

• Stress
• Pain
• Guilt
• Worry
• Lack of Sleep
• Petulant Children

Qualifications
To do this job well you must exhibit:

• Unconditional Love
• Compassion
• Patience

Compensation
This is a non-paid position but it does come with benefits you won’t find anywhere else such as undying love of the child and eternal gratitude from the father.

Thank You!
Of course it’s impossible to list all the amazing things you do. When you look at all that’s required it’s a wonder anybody wants the job of full time mom; BUT you do it so well and take such good care of our kids! We’re so lucky to have you in our lives. Happy Mother’s Day!

Note: This is the mothers day card I wrote for my wife today.  This afternoon I took both little ones while she headed out on her own for some time away from the kids.  After only a few hours of a demanding three year old and a crying newborn I am reminded of how tough a mother’s job can be.  Hats off to all the mothers out there!

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College Graduate Jobs and Money Tips

Jobs for college graduates are hard to come by so here’s a list of money tips for recent college graduates to help them manage their finances while they’re looking for their first job with no money coming in.

College Graduation Gifts

Friends and family will likely be looking for college graduation gift ideas to help you celebrate your degree.  Why not suggest these gift ideas for college grads to help you get a financial headstart?

Best Jobs for College Grads

Where you decide to live can have a big impact on the jobs available to you.  Here’s a list of the some of the best cities to live in the US and here’s a rating of available jobs by state.  Since the economy is pretty sluggish right now, here are some suggestions for the best careers in a recession.

Investing for College Grads

The stock market has taken a beating the last several years which really stinks for people about to retire but it could be a great buying opportunity for people just starting to make money in their new careers.  Here are some investing tips for college grads.

Student Loan Payments

Unfortunately you’ll have to start paying back the student loans that helped pay for college.  Here are some student loan tips on delaying your payments, lowering your payments, and consolidating your student loans.

College Graduate Finances

Spending, saving, and budgeting are going to be pretty important skills as you start off with little money from either no job or an entry level job.  Check out the best personal finance software online, all of which are free!  Here are some tips on saving and budgeting for college grads.

Find out how you can start building up your credit score with secured credit cards and secured loans.  If you already have some credit established, here are some of the best credit cards for college graduates.

Health Insurance for College Grads

Once you leave school you’ll have to worry about getting your own health insurance.  You can always look into short term insurance until you find a job that offers insurance coverage. You can read more about your options in health insurance for college graduates.

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How Do You Cope With Fear?

How do you cope with fear?  Whether it’s a nagging worry in the back of your brain or a full blown terrifying revelation, fear can eat away at your psyche and make your life miserable… if you let it.

There are many things to be afraid of in this down economy: being laid off, losing money in the market, swine flu, not having health insurance, bankruptcy, home foreclosure.  Of course our fears aren’t always realized, in fact I bet the majority of times the things we fear don’t materialize and if they do, things aren’t as bad as we had feared.

Fearing Fear
You’ve probably heard the famous quote from Franklin Roosevelt, “Fear All, for Anything Bad is Possible”.

Wow, what a negative thought.  Of course, that’s not what FDR said, his actual line was that the “Only Thing We Have to Fear Is Fear Itself”.  I certainly like that thought much better. 

Trying to Worry Less
Instead of spending all our time worrying about what might happen, or what could happen we should focus on the cards we’re dealt.  As Kenny Rogers sang in the Gambler, “Every hand’s a winner, and every hand’s a loser and the best you can hope for is to die in your sleep.”  All we can do is make the best of what we have, how we react to these situations has a lot to do with how they turn out in the end.

Reacting to Fear
Looking back on various times I’ve been majorly worried or fearful the term “clouded mind” is a pretty good description of how I reacted initially; or perhaps as though I was having an “out of body experience”.

I was going through the motions but everything was hazy and I was so consumed with thinking about my fear that I felt like I wasn’t really “all there”. Kind of like I was watching myself interact with others but in my mind all I could think was “I can’t believe this is happening”.

Usually after a while I snap out of it and try and focus on forgetting my fear.

Forget Your Fear
Of course, it’s hard to put things you’re afraid of out of your mind all together but there’s no point in wasting time, spending every minute or hour worrying about something that might not even happen.

My best formula for this is to come up with alternative plans and figure out how those would work. Keep your mind busy going through various contingencies. If you never need them, great, at least it took your mind off of worrying.  If you do need them, you’ll certainly be glad you’ve thought up some options.

Looking for the Bright Spot
We fear change because it’s different than what we had planned; the goal we’ve worked so hard towards has suddenly shifted.  But remember, many times the change we fear also holds opportunity.

Some of the best stories I know are tales of creating triumph out of despair. Of course the stories tend to gloss over all the hard work, worrying, and pain involved since the happy ending is often what we focus on.

We all cope with fear differently but the main thing to remember is not to dwell on what we fear. So if you’re feeling full of despair about your depleted 401(k) or impending lay offs the best tip I can give is to expend your enegry figuring out what steps you’ll take next rather than spending all your time worrying about it.

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Angies List Tips to Hiring a Contractor

Angies List founder, Angie Hicks, offered some tips recently on an ABC station on hiring a contractor to do work on your home.  According to polls taken by Angie’s List members, homeowners are spending more on home improvement than in recent years. A contractor interviewed on the news segment concurred that a lot of people are choosing to remodel their homes instead of buying or building new homes due to the tough real estate market.

Lower Prices for Home Improvement?

The same poll on Angies List indicated that due to the recession, a lot of members have found contractors dropping their prices by at least 10% in order to get the work. Despite the discounts, remodeling your house isn’t cheap so the advice Angie gives is that you typically need to stay in your home for a few years to recoup the cost of the job. She re-iterated the advice I’ve heard before that work on kitchens and bathrooms often brings the best return on investment.

To help with the cost of the job she suggests getting several estimates and negotiating with the contractors to see who can offer the best price.

Quality of Work

Of course, it’s not all about the price, the quality of the work is just as important.  To find someone who will do a good job, Angie recommends using a contractor you found on a referral, whether through friends or family or via a service like Angies List.

I think this is one of her best pieces of advice.  We have a friend who got some really low price quotes from a contractor who came to her door offering to do some work.  Of course she was excited due to the low cost but to me it was a red flag to do some further investigation. 

If the price seems too good to be true it pays to dig deeper and find out the reason for good deal.  It could be that the contractor is really hurting for work, however, it could also be that they do a horrible job and can only compete on price. 

I know a guy that runs a local concrete business and he says about 30–40% of the work he does is fixing the mistakes of other contractors.

Common Sense Hiring Tips

The tips the news segment offered are pretty common sense.  Double check that the contractor is licensed and insured and ask for references of other work they’ve done. Before you pay any money or have them start on a job get a contract with all of the work spelled out. 

Another good reason to research a contractor, especially in a bad economy, is that you don’t want to have them start on a project and then have them go out of business on you part way through.  Apparently Angies List offers a service called ContractorCheck in partnership with Experian that allows it’s members to check the credit of businesses and contractors before hiring them.

When I researched joining the service I discovered you can use Angies List promo codes to save money on membership if you want to signup and try it out.  Right now you can use the promo code of HOMEWORK to save $20.

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Swine Flu Symptoms Affecting the US Economy?

As the swine flu virus continues to grab headlines across the nation, it’s still uncertain how wide it will spread and what impact it will have on the US economy.  One thing we can do is look at how it has affected the Mexican economy.

Swine Flu in Mexico
While it’s too early to say with any degree of certainty what effects the swine flu (H1N1 virus), will have on the economy, there is some anecdotal and common sense analysis that can take place. Time magazine, for example, has reported Mexico has taken a hit of more than $2 billion in economic losses due to the swine flu.

Many of these loses have come in the form of reduced trade and tourism, others have simply resulted from a loss of productivity as major citites shut down.  The markets in Mexico did jump 5 percent after the government announced it believed the swine flu epidemic had peaked on Monday but of course nearly all world markets gained significantly that day 5/4 , so it’s hard to say whether it was a result of a global uptick, promise of easing travel and trade restrictions, or both.

Industry Impacts
So what are the economic implications in the United States? There are certainly portions of the market that may have to deal with side effects of the swine flu, especially if the scare continues into the early summer

Already, some schools have shut down, many for a week or more at a time.  The extension of the school year to make up the lost time could impact the beginning of the busy summer travel season. Families who did plan vacations for the first portion of the summer may now find they have to either cancel or pull their children out of school and risk missing year end tests.

The flu could affect tourists coming into the US as well.  The European Union suggests Europeans postpone travel to North America. During televised remarks April 27, EU Health Commissioner Androulla Vassiliou said,

“Personally, I’d try to avoid any non-essential travel to the areas which are reported to be in the center [of the crisis].”

She followed that up by saying those in Europe “should avoid traveling to Mexico or the US, unless it’s very urgent for them.”

Thus, as with any pandemic, the travel industry looks to be one of the most vulnerable. This includes not only airlines but also resort vacation destinations, cruise lines, and theme parks.

Another area that may be affected are some of the commodities markets. If people are doing less traveling the reduced demand could add to the already existing surpluses in the oil market.  The pork industry has also been hit hard, its estimated to have lost $30 million since the swine flu outbreak began.

The Jury is Out
If you look at Delta Air Lines stock, an American carrier with a significant presence in Mexico, it’s share price is up considerably despite the swine flu outbreak.  Of course there are many things that factor into a stock’s share price but the fact that it’s going up seems to suggest Delta investors aren’t too worried about the long term effect of swine flu on the travel industry.

Of course in a global economy where international travel and trade are key to stability and growth anything that hinders them can have a far reaching affect.  The SARS outbreak made a mess in the Asian economy a few years ago so hopefully the actions of the CDC and governments around the world will contain the H1N1 virus and limit deaths and the economic impact.

Contributed by Ken Black

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Financial Confession – I Don’t Budget

My wife and I don’t make or follow a budget, at least not formally.  We own a copy of Quicken and Microsoft Money and I’ve played around with some of the best personal finance software online but we don’t sit down every week or month, figure out what we’re going to spend, and track it to the penny.

Non Budgeting Strategy

This approach has worked with us for some of the reasons that Mighty Bargain Hunter describes and a few others.

Stable Costs

We have relatively fixed costs; our spending doesn’t fluctuate a lot from month to month.  We don’t make a list of all the costs we need to cover each month but we have a pretty good idea how much is coming in and how much we need for expenses.

Frugal Habits

I don’t like to spend money; perhaps this is why I’m a bad tipper. (By the way, I got a lot of heat for that one but if you read the whole thing I explain that I know I’m a bad tipper so I let my wife do the tipping for me since she does it fairly.  When she’s not around, I tip more than I think she would just to be safe.)

Thanks to her frugal Midwest roots my wife isn’t a big spender. Although sometimes she spends money on things I that I wouldn’t, I can’t really blame her since I don’t like to spend at all : )

Psychological Cushion

We have about 6 months of savings built up in our FNBO Direct and ING Direct accounts so we have a reasonable cushion.  Of course we don’t want to tap into it for monthly expenses but we don’t worry that we’re not counting every penny since we have something to fall back on if we were to need it.

Slow Spenders

We don’t rush into any major spending decisions.  It takes us months to decide on big purchases, which helps us make sure we really need what we’re thinking about buying and gives us time to save up for it.

Budgeting Strategy Shift

All that being said, we’ve been down to a single income family since 2007.  Although my wife does earn money with her part time job, she doesn’t work in the summers and she took off extra time this year for our new baby.

The new baby means higher insurance costs and now two kids in diapers.  To top it off, I took a pay cut for a better job.  So rising costs and shrinking incomes mean we’ll need to start counting our pennies more closely.

We sat down and had a money discussion before the baby came and will come up with a new budgeting strategy in the coming weeks once the initial baby blitzkrieg has subsided somewhat.

What about you?  Do you budget or do you “spend by the seat of your pants”.

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Adjustable Rate Mortgages

Adjustable rate mortgages may not be as popular as they were only a few short years ago but they can still be beneficial if you only need to borrow money for real estate for a relatively short time period.  Here’s a look at what adjustable rate mortgages are and who they can benefit.

Adjustable Rate Mortgages

The adjustable rate mortgage does exactly what its name implies. It adjusts the interest rate of the mortgage during the life of the loan. Many adjustable rate mortgages have a fixed rate period of 1, 3, 5, or 7 years, and then the interest rate adjusts to a specified rate index

These loans are often referred to using the format, a 3/1 or 5/1 ARM. This means that the interest rate is fixed for 3 or 5 years, and then it adjusts to an index rate, such as LIBOR, plus some margin amount added on by the lender.

During the fixed period, the loan acts like a fixed rate mortgage. It charges the initial interest rate agreed to in the mortgage note. Once the fixed rate period is over, the interest rate and the monthly payments due are re-calculated based on the index rate.

Most adjustable rate mortgages have caps in place which limit the scope of the potential rate changes.  These caps typically determine how often the interest rate for the mortgage is allowed to change and maximum amounts that the interest rate is allowed to reach over time.  For example, the caps may say that interest rate can only be adjusted every six months and can’t be adjusted by more than 1% a year.

Adjustable Rate Benefits

Although interest rates are historically low right now, in times when rates are higher, adjustable rate mortgages can offer advantages for shorter term loans. When rates are higher the introductory interest rate on ARMs are significantly lower than they would be on a fixed rate loan. For investors or consumers who only plan on owning a piece of real estate for a several year time frame an adjustable rate mortgage allows them to pay lower interest rates.

For example, if you move to a new town and know you’ll be moving back in few years there is no need to borrow the money to buy a home for a 30 year term.  Lenders charge more for 30 year loans to compensate for the additional risk they take on by lending you money for a longer term.

If you only need the money for a shorter time period, you can pay less in interest if you borrow it for a shorter period with an adjustable rate mortgage.

Adjustable Rate Cautions

During the 1990’s and early 2000’s, adjustable rate mortgages became popular for buyers with less than perfect credit or little capital. The lower inital interest rate was used as a means to help buyers qualify for more house than their income could support long term. 

Of course we’ve all seen what happened to the housing market and the economy when too many people tried to borrow more than they could afford. An adjustable rate mortgage can be a useful tool for lowering your interest payments if you’ll only own real estate for a short period of years.  However, if you use it simply to get lower initial monthly payments on a piece of property that you couldn’t afford at higher interest rates, the adjustable rate mortgage probably isn’t the best financing option for you.

 

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Credit Card Scammers

Credit card scammers are using the recent news of President Obama’s meeting with credit card companies to trick consumers into doing business with them.

The Hook

Yesterday I got a phone call from an unknown number, 408–587–2105, at my desk at work.  As soon as I answered an automated message started to play from a women claiming her name was Jamie. She started off saying she was calling about my credit card payment; my first thought was I had somehow missed a payment so her intro really caught my attention.

The Story

Then “virtual Jamie” said that after the recent meetings between banks and President Obama, the federal government had directed them to lower my interest rates. I didn’t capture it word for word but the way she worded it made it sound as though she was calling from my credit card company.  The purpose of the call was to lower the interest rate I was paying on my credit card and all I needed to do to get started was press 1.

This was a pretty sneaky approach since many people have probably heard the news about Obama cracking down on credit card fees.  Some people are probably hopeful enough that their interest rate will be lowered that they press 1.

The Close

By then I realized it was a scam of some sort but I was curious to find out more about what was behind it.  She went on to ask in three different ways for me to press 1, each time more urgently than the last.  I didn’t do anything just waited to see what would happen.

After no response from me to the the last request of “Please press 1 now so we can lower your interest rates”, virtual Jamie hung up on me.  I wish I’d have pressed 1 just to hear what they were offering and how they would try and sell me so I could share it here.

The whole call took less than a minute. Obviously these scammers have the system figured out; the more calls they make, the more money they make.  If someone doesn’t respond within 20 seconds after hearing the message they simply move onto the next phone number.

Anyhow, just a reminder to be wary of cold callers they have lots of tricks to get past your defenses and convince you to take the action they want.

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Filing for Bankruptcy – Chapter 7 vs Chapter 13 Bankruptcy

Filing for bankruptcy can eliminate or reduce your debt but there are major consequences you should be aware of before you file for bankruptcy. Unmanageable debt is a huge problem in the U.S., bankruptcies totaled over 1.1 million last year; a 31% increase from the previous year.  Here is a look at the two most common forms of personal bankruptcy, Chapter 7 vs Chapter 13, and what they mean for your finances.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is the most common type of bankruptcy for individual filers, the epitome of what people think of when they hear the term “bankruptcy”. Chapter 7 is basically a liquidation of all your assets that aren’t protected against creditors during bankruptcy proceedings.

In some states like Florida, the judge cannot force you to liquidate your principal residence if you are in good standing with your mortgage; however that is not the case in all states. With Chapter 7 your assets are liquidated to pay off your debts.  Any remaining debt not covered by the sale of your assets is no longer your responsibility; your debt slate is “wiped clean”.

I don’t like that term, because there is nothing clean about bankruptcy. It is a long, painful process and it tarnishes your credit for many years to come. Also, keep in mind that federal student loans never go away since judges cannot dismiss federal student loan balances. 

Chapter 7 bankruptcy is like starting over with your financial life, but the consequences for starting over are that you lose your possessions and you have a big asterisk on your credit report for the next 10 years.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is a reorganization of your debts supervised by a federal court; basically a way to renegotiate your debts and come up with a plan to repay them. Unlike Chapter 7, the debts are not dismissed by the court. Instead, your attorney and the judge work out a repayment plan to get you out of debt. In some cases the reorganization involves a reduction of the debt you’re required to pay but the debts are not completely eliminated.

Once your lawyer has negotiated the terms, you start paying monthly installment payments to a trustee appointed by the court and they distribute the funds to pay off creditors. In order to file for Chapter 13, you must show that you have income coming in on a regularly or fairly regular basis. How much you earn will determine the length of time over which they structure the repayment plan.

There are debt limits for Chapter 13 bankruptcy, if your debt is higher than a certain amount then the current laws won’t allow you to file for Chapter 13.

Chapter 7 vs Chapter 13

The advantage of chapter 7 is that you start over with no debt. Obviously a big disadvantage of chapter 7 is that creditors will take anything and everything they are allowed to get their hands on to pay off as much of your debt as possible before the courts wipe away the rest of it.

Of course, if you’re so deep in debt that you could never pay it all back you may be willing to sell everything you have to be free of it. A recent CNN Money article describes Chapter 7 as “often the best option for consumers saddled with insurmountable debt”.

Not having to sell all of your possessions is the upside to Chapter 13. One big advantage of chapter 13 for home owners that can work out a repayment plan with their bank is that you can keep your house.  Another benefit is that a Chapter 13 stays on your credit report for a shorter time period than a Chapter 7; although they will both ruin your credit until they fall off your history.

Filing for Bankruptcy

If you are considering filing for bankruptcy, remember it is one of the biggest financial decisions you’ll ever make. The CNN Money article cautions against filing for bankruptcy without first doing your research.

“be wary of any potential conflicts of interest from credit counseling agencies or bankruptcy lawyers that could potentially profit from your position”

Not only should you consult with an attorney, it would be smart to talk it through with close friends and family.  Another suggestion is to sit down and talk with people that have gone through a bankruptcy filing to hear their experience and what they learned from it.

Alternatives to Bankruptcy

As we’ve covered, bankruptcy is not an easy solution to getting out of debt.  There are definitely other options you should look into before considering filing for bankruptcy.

Negotiating with Creditors – Your creditors would rather recieve a portion of the money you owe them than none of it so they may be willing to work with you.  You can call the companies you owe money to, explain your situation, and try to work out a payment plan that will allow you to pay off the debt rather than simply defaulting on it.

Credit Counseling – The surge of debt problems in the U.S. has given rise to many credit counseling organizations that can work with you to help address your debt.  A lot of them have education options where they’ll show you how to better manage your money and some of them will help you negotiate with your creditors.

Not all organizations claiming to be credit counselors have your best interest in mind, beware of fraudulent debt reduction companies. The US Trustee Program can help you find credible credit counseling services.  The Trustee Program is:

“the component of the Department of Justice responsible for overseeing the administration of bankruptcy cases and private trustees under 28 U.S.C. § 586 and 11 U.S.C. § 101”

They have a portion of their website dedicated to credit counseling & debtor education information where you’ll find a list of approved credit counseling agencies.

Borrowing from Friends & Family – You can’t borrow your way out of debt but if you need some money to get through a tight spot one option is borrowing money from people you know.  It’s certainly a tricky proposal that could ultimately ruin a relationship if not handled properly.  However, if both parties are up front about what’s expected and responsible about meeting the agreed upon terms it could be a workable option.  Here’s an article about borrowing money from family.

Resources

• Approved Credit Counseling Agencies
• Credit Counseling Frequently Asked Questions
• Approved Debtor Education Counselors
• Choosing a Credit Counselor

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