By Sarah Clark Oster

This week one of our CCCS staff members received great news – she was notified that she had won $150,000 through the UK’s Mega Lottery! Accompanying the letter she had received was a check for $3,990 (a portion of her winnings). All she needs to do is send $1,995 to the lottery claim agent to cover taxes on her winnings.

Was our staff member excited? Did she treat everyone to lunch because she’s now $150,000 richer?

No, she didn’t – she recognized that this is a scam.

Many, though, are duped by such ploys. Con artists are adept at generating notifications that look official and quite legitimate. The letter that our staff member received tells her that this information is highly confidential, and that she shouldn’t share the news with anyone. It tells her that they’ve tried to reach her many times, and that this is her final notification. If she doesn’t act now, she’ll miss out.  Click here to see the actual letter that our staff member received.

Here’s what the Federal Trade Commission says about Fake Check scams: “The check is no good, even though it appears to be a legitimate cashier’s check. The lottery angle is a trick to get you to wire money to someone you don’t know. If you were to deposit the check and wire the money your bank would soon learn that the check was a fake. And, you’re out the money because the money you wired can’t be retrieved, and you’re responsible for the checks you deposit — even though you don’t know they’re fake. This is just one example of a counterfeit check scam that could leave you scratching your head.”

For more information on how con artists use this scam to take advantage of consumers, check out the FTC’s full article on their Scam Alert blog.

Sarah Clark Oster is the Director of Marketing and Education Outreach at Consumer Credit Counseling Service of the Tennessee River Valley, a non-profit organization committed to helping individuals resolve their financial difficulties. Consumer Credit Counseling Service of the Tennessee River Valley is a member of the National Foundation for Credit Counseling. To schedule an appointment contact CCCS of the Tennessee River Valley at 888.381.8178 or visit them online at www.credithelptoday.org.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

By Barb Miller

Most people I work with are very concerned about improving their credit scores post-bankruptcy. This is a good thing since nearly all important transactions like finding a job, buying insurance, financing a car or home, or even renting an apartment may well depend on your credit score. The good news is you can have excellent credit again! But, it will take time and hard work to get there. If you’re groaning over the “time and hard work” comment, simply recall how long it took to get to the point of filing bankruptcy and all your hard work to avoid that step. In comparison, working on your credit should be a piece of cake.

First Things First
Start by checking your credit report for accuracy. You can get your credit reports free at AnnualCreditReport.com or by calling the toll free number (1-877-322-8228). If you received free copies within a year of your request, you must pay a small fee. When you get your credit reports, review them carefully to make sure your name, address, and employment information are correct. Look over the account information carefully. Any account you included in the bankruptcy should show a zero balance, and may have a notation that the account was part of a bankruptcy.

In addition, your bankruptcy will show under the “Public Record” section of each credit report. You should know that the bankruptcy filing can legally stay on your credit report up to 10 years, although it can fall off sooner. As time goes by and your credit improves, new creditors will be more concerned about how you used credit since your bankruptcy discharge rather than the bankruptcy itself.

Ongoing Secured Loan Obligations
If you filed bankruptcy and had car loans or mortgages but were current (or got current) during the bankruptcy, continuing those payments on time every month will help to rebuild credit faster. The key is on time payments since 35% of your credit score is based on whether you pay bills when they are due. Paying early is even better if at all possible.

Be Ready to Use Credit Again
Although it helps your credit score to have a payment history, don’t rush out looking for new credit until you are certain you can handle it responsibly. This means you can stick to a budget, and save money every month for emergencies. Only then should you consider using small amounts of credit that you pay in full when the bill arrives. Start small, perhaps getting a gas card or one for a retail store. But beware! These creditors typically charge double digit interest rates so be sure to pay the bill in full each month to avoid expensive interest charges.

Existing Credit Cards
You may have an open credit card account from before your bankruptcy. If so, use the card but keep balances low. Again, make monthly payments on time. Ideally, you should be able to repay the monthly balance in full because you are simply using credit as a tool to rebuild your score, not to supplement income or in place of emergency savings. On the other hand, you must use credit to rebuild credit. Consumers who use credit moderately are considered a better risk than those who don’t use credit at all.

Secured Credit Cards
If all else fails, talk with a local bank or credit union about getting a secured credit card. Secured means you must deposit money into an account which becomes collateral for using the credit card. Your line of credit depends on the amount you deposit. Make sure the lender reports your account activity each month to the 3 credit reporting bureaus. Without a solid payment history being documented on your credit reports, no one will know what a terrific job you are doing. When creditors don’t report, your new and improved credit history will remain a mystery.

Use the card for small purchases each month and again, pay your bill in full when due. You can’t use the funds in the account for payments so be sure not to charge more than your budget allows you to pay in full. After a year, talk with the lender again to see if you qualify for an unsecured credit card. Before signing on the dotted line, make sure the interest rate and other terms are affordable for you.

How Long to Rebuild Credit
Anyone who promises they can repair your credit quickly is likely a scammer or con artist. Building good credit takes time and patience. But, time will pass regardless so you may as well make good use of it. Once actively trying to improve your credit, it typically takes 2 years before you’re accepted for a major credit card at decent interest rates. To qualify for a mortgage with reasonable terms, it takes about 4 years.

Barb Miller is a Certified Financial Counselor and Bankruptcy Specialist with LSS Financial Counseling. She specializes in blogging about bankruptcy, student loans, and financial education. LSS Financial Counseling is a member of the National Foundation for Credit Counseling. To schedule an appointment with a certified financial counselor call 877.577.2227 or visit their website at ConquerYourDebt.org.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

By John Ulzheimer

Ok, I get it…the world of financial services can be complicated and confusing. It’s hard to calculate APRs, and it’s hard to forecast interest paid on long term credit card debt. And, according to a recent survey by VantageScore Solutions and The Consumer Federation of America, consumers don’t know very much about credit scores. But nothing, and I mean nothing, has caused more confusion lately than the misuse of terminology as it pertains to plastic. The goal of this article is to provide a clear definition and proper terminology as it pertains to commonly used “plastic.”  Here goes…

Prepaid Debit Card – A prepaid debit card is a card that has value loaded straight to the card. You can load your paycheck, or pay a service like Western Union to add funds to the card. Prepaid Debit Cards are not credit products. You buy them, like a gift card. You don’t apply for them, like a credit card. They usually are loaded with fees and offer no credit building benefit, regardless of what you may hear or read. A prepaid debit card is not a….

Debit Card – A debit card is basically a plastic check. There are no funds loaded onto a debit card. The funds are in your account with a bank or credit union. When you swipe your debit card the funds are transferred from your bank to the merchant. Debit cards, like prepaid debit cards, are not credit products and do not offer credit building benefits. A debit card is not a…

Secured Credit Card – A secured credit card is actually a real credit card. But, the issuer requires that you make a deposit with their bank or credit union and then issues the card with a credit limit of an equal amount. Because it is a credit product you do have to apply for them, and they are commonly reported to the credit reporting agencies. A secured credit card actually IS a…

Prepaid Credit Card – A prepaid credit card is the same thing as a secured credit card. It just seems like some folks would rather call them “prepaid” than “secured” despite the entire secured card industry referring to them as “secured credit cards.”  And yes, calling them “prepaid credit cards” is causing people to believe that you’re actually referring to prepaid debit cards, which they are not.  A prepaid credit card is not an…

Unsecured Credit Card - An unsecured credit card is what most of us carry in our wallets, and we almost always refer to them simply as, “credit cards.” We had to apply for it, and the issuer had to approve us for it. And, we have a credit limit, a due date, an interest rate, and we get a statement once a month. We have late fees, over limit fees, and other fees…if we mismanage the card. Most of us have plenty of these credit cards on our credit reports. An unsecured credit card is not a…

Charge Card – A charge card is a “pay in full” product, like the American Express Green Card. These are sometimes referred to as “Open” accounts, as that’s the standard credit industry “Account Type” designation for a pay in full account. And no, “open” in this case does not mean the opposite of “closed.” If you charge $500 on a charge card then you must pay $500 by the due date. You can’t roll part of the balance to the next month like you can with a credit card. A charge card is not a…

Gift Card – A gift card is just that…a card you buy for someone as a gift. You probably got some for your birthday, or for Christmas as they’re the most common gift given each year. A gift card is a piece of plastic that has some dollar amount loaded onto it, like a prepaid debit card. But, there are no fees other than the fee to initially purchase the card (unless you never use it). Gift cards can either be “general use”, like the American Express Gift Card (able to be used wherever Amex is accepted) or they can be “chain specific”, like a Macy’s Gift Card (able to used only at Macy’s)

By the way, the reason some people are calling secured cards “Prepaid Credit Cards” is because of SEO (Search Engine Optimization). The folks that are marketing secured credit cards want the “rankings” and traffic for the term “prepaid” as it pertains the plastic. We can partially thank keyword ranking desires for this intentional misuse of “plastic” terminology.

This article originally appeared on Credit Card Insider.

John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a contributor for the National Foundation for Credit Counseling. He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, Ulzheimer is the only recognized credit expert who actually comes from the credit industry. Follow John Ulzheimer on Twitter: http://twitter.com/johnulzheimer.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

By Jason Alderman

Most people who grew up during the Great Depression and World War II learned to scrimp and save as a matter of necessity. Many also gained financial security during subsequent decades when pension plans were more common, homeownership became the norm, and government programs like Social Security and Medicare expanded. For a time, it seemed their Baby Boomer children stood to inherit amounts unheard of for previous generations.

However, many economic factors have taken their toll on seniors’ nest eggs in recent years. Thus, if you were counting on a sizeable inheritance to help finance your own retirement, you may want to rethink that strategy. Here are several reasons why many seniors have been forced to revise their estate distribution plans (and indeed, to reevaluate how to fund their remaining retirement years) – and why their heirs may need to rethink their own savings and retirement plans if they were relying on an inheritance:

Plunging retirement account values. Most people who invested heavily in the stock market during the Great Recession watched helplessly as their accounts lost significant value. Although the market has mostly recovered, many people – especially those in or approaching retirement – stashed their remaining balances in safer investments earning very low interest, worried the market might plunge further. 

Younger savers still have many years to catch up, but it may be very difficult for retirees. Unless they reentered the stock market a few years ago, chances are they’ve missed out on much of its resurgence and their accounts are thus doubly dinged. Many likely will have to draw on their account principal to make ends meet, thereby depleting their savings much more rapidly than planned.

Home equity woes. One primary cause of the stock market crash was an out-of-control housing market where prices rose unrealistically, and people acquired risky mortgages they couldn’t afford. Many seniors, hoping their home’s equity would help fund retirement, instead found its value drastically reduced. Fortunately, the housing market has begun to recover. But many tapped-out seniors have turned to reverse mortgages and home equity loans to draw on their home’s equity to cover living expenses, thereby lessening their estate’s future value.

We’re living longer. As average life spans increase, so does the period we’ll need to survive on our retirement savings. According to Social Security calculations, a 65-year-old man today will live until 83 on average; for women it jumps to 85. And a quarter of 65-year-olds will live past age 90. Many people never imagined their savings would have to last that long and didn’t plan accordingly.

Skyrocketing healthcare costs. Even if they buy Medicare prescription drug and Medigap coverage, seniors, like everyone else, spend an ever-increasing percentage of their income on medical care. Such costs usually far outpace benefit cost-of-living increases and interest earned on investments – especially from low-risk investment vehicles many seniors favor.

Government programs are overburdened. Baby Boomers have begun tapping Social Security and Medicare benefits, and that number will grow rapidly. Plus, far fewer younger workers now fund those programs, so it’s possible that benefits will decrease, premiums will rise or taxes will increase – or a combination of all three; all options would strain fixed incomes.

Misguided early retirement. When the market was booming, many people retired early, assuming they could afford to bridge the gap before receiving Social Security and Medicare. But plummeting home equity and reduced 401(k) balances have forced many retirees to aggressively withdraw from savings, trim expenses, or even return to work.

Spreading the wealth early. Many seniors help their children and grandchildren pay for high-ticket expenses like home down payments and college. Although such gifts reduce the eventual value of their estate, there are certain tax advantages (lower estate taxes, state tax deductions for 529 Plan contributions, etc.); not to mention the joy of being able to help loved ones.

Just be sure that if you’re the recipient you don’t take such assistance as license to take on additional debt. And if you’re on the giving end, be sure to consult a financial planning expert to help properly structure any such gifts. If you don’t have a trusted referral, good resources include the Financial Planning Association, the National Association of Personal Financial Advisors and the Certified Financial Planner Board of Standards.

Long-term care. Unless they’ve purchased comprehensive long-term care insurance (which is quite expensive and can be difficult to qualify for), your parents will likely burn through most of their savings should they ever require assisted living. And keep in mind that Medicaid will only pay for a nursing home once they’ve exhausted most of their assets.

Bottom line: With seniors facing increasing financial challenges, don’t depend on an inheritance to provide your financial security.

Follow Jason Alderman on Twitter: http://twitter.com/PracticalMoney

This article is intended to provide general information and should not be considered legal, tax, or financial advice. It’s always a good idea to consult a legal, tax, or financial advisor for specific information on how certain laws apply to you and about your individual financial situation.

Jason Alderman is Senior Director, Global Financial Education, with Visa, Inc.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

By Jana Castanon

Finances are a hot topic for any couple, and one that must be discussed prior to making a permanent commitment to each other. There are three basic money management styles that a couple could choose – they could combine all their resources into joint accounts, have completely separate accounts, or a combination of the two. There’s isn’t one right way to do it. It depends on personalities, upbringing, and values.

Joint Finances
Mark and Rebecca deposit their money into a joint account where there is no division of who it belongs to. They did not have a discussion prior to getting married on how they were going to handle their finances. Rebecca assumed that task because she was taught at an early age the importance of having a plan in place in order to reach financial goals. Mark is rarely involved in the details of their finances, but is aware of what the bills are, when they are paid, where the money is, and current account balances in case he would have to assume that responsibility. Having a plan in place is critical for their financial success. “I don’t like surprises”, states Rebecca, “so at the beginning of every year, I re-evaluate our spending plan and review the progress towards our goals and make adjustments accordingly. Tweaks need to be made here and there, but it is helpful to have an overall picture”.   

Tips for Success:

Have a spending plan.

• Include spending money for each spouse in the plan.
• Determine a threshold, and discuss purchases over that threshold.
• Set joint savings goals.

Yours, Mine, and Ours
When Jim and Mary met they both had an established financial life – credit cards, student loans, saving accounts. When they started to acquire bills together they decided to open a joint checking account, and allocate a percentage of their income to pay those debts. This style works well for them because they have their own discretionary money to spend how they please. “I like that I can buy a pair of shoes and not feel guilty”, says Mary. “But, I also like that when it comes to major purchases that I have someone to discuss it with. I can be impulse, so this is a big plus!” Lastly, when it comes to setting a goal, for example, to take a vacation, they each put an established dollar amount in an account until they reach the desired amount.   

Tips for Success:

• Contribute to savings and retirement individually.
• Acknowledge that one may be saving their money and the other spending it.
• Discuss long term goals and plans for retirement.
• Research tax implications if filing a joint return.

Independent Finances
Pete and Angela married in their mid-thirties and had seen what worked, and didn’t, in previous relationships. They felt they were in a place in their lives that they liked being financially independent. Based on income they divided up their expenses, and each pays their own separate bills each month. “The only problem we have using this system is that we have a hard time looking at the ‘big picture’. We need to do a better job, and sit down more often and discuss things like retirement”, states Pete.   

Tips for Success:

• Contribute to savings and retirement individually.
• Be watchful that all bills are being paid, especially in community property states.
• Discuss long term goals and plans for retirement.
• Research tax implications if filing a joint return.

Jana Castanon is the Community Outreach Coordinator for Apprisen. Apprisen is a member of the National Foundation for Credit Counseling. To schedule an appointment with a certified financial counselor call 800.355.2227, or visit Apprisen’s website at www.apprisen.com.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

By Mark Foster

As school lets out for the summer vacations are on many families’ minds. A Credit Counseling of Arkansas (CCOA) website poll showed that 84 percent of families haven’t had a vacation in the past year. Many can’t afford to take one unless they pinch their pennies. But, whether someone plans an elaborate vacation or something close to home, it is vital to first create a vacation budget to avoid overspending as spending too much will ultimately just add more stress to a family and their finances. 

As CCOA’s website poll shows, people are still feeling pinched by the economy so in order to take a vacation they have to look at affordable options. But, a family’s first step is to take a look at their budget and see how much vacation they can afford. If credit cards will be used to finance the trip it’s important not to charge any more debt than can be paid off within a few months’ time so families aren’t still paying on the vacation when next summer comes around.

Because of tight budgets many families vacation close to home, opting to travel to nearby places they can drive to in the morning to visit and return to their home by night. This is called a staycation. It eliminates lodging costs, and can significantly reduce travel and meal costs. There are probably numerous fun choices within a three-hour drive from home – perhaps a zoo, a science museum, a park, an aquarium, or sporting events. For those who think no vacation is financially possible for them, a staycation can be doable for many on very tight budgets. Instead of going anywhere, staycationers can plan something fun at home, such as renting movies, camping in their backyard, or grilling on their patio.

More vacation savings tips from CCOA: 

•      Pack your own food, drinks, and snacks rather than paying $3 for a bottled water at a park, hotel, or convenience store. Taking snacks, food, or drinks can save a small fortune.

•      Eat at restaurants where kids eat free. Also, stick with water and no dessert. A family of four can easily spend $10 a meal just on drinks alone.

•      Give children a trip allowance. Kids will learn to manage their money as they contemplate buying souvenirs and snacks.

•      Look in the newspaper and the Internet for discounts and coupons to area events and attractions.

The most important thing is to first find out how much vacation you can afford and then plan from there.

Mark Foster is Director of Education with Credit Counseling of Arkansas (CCOA). CCOA is a member of the National Foundation for Credit Counseling. Contact CCOA at 800.889.4916, or visit CCOA online at www.CCOAcares.com.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

By Melinda Opperman

Often when people turn to credit counseling it’s because they have experienced a financial crisis, sometimes caused by an unexpected reduction in income, or a medical emergency. Credit counseling educates consumers about creating a spending plan, and saving money, while reducing one’s dependence on credit. While the decision to borrow money whether it’s a credit card, a mortgage, or a student loan always carries a level of risk, there are certain borrowing methods that can be particularly troublesome. Be cautious before borrowing money via the following ways:

Credit Card Cash Advance
This is when a borrower uses their credit card to withdraw cash up to a certain amount. Why it’s risky: Like with a regular credit card purchase, interest will accrue on the borrowed money. The difference is when you charge a purchase to your credit card you have about 30 days to pay the bill before interest starts to accrue. With most cash advances interest will start to accrue right away. The interest rates for cash advances are typically much higher than for purchases. Plus, many banks charge cash advance fees.

Pawnshop
A borrower can obtain a loan from a pawnbroker to be repaid at a certain interest rate after securing the loan with a personal item to serve as collateral. If the borrower doesn’t repay the loan as agreed, the pawnbroker can sell the item held as collateral. Why it’s risky: The interest rates charged by pawnshops are generally very high. Plus, if you’re unable to repay the loan, you could lose the item you put up for collateral.

Payday Loans
A payday loan is when an individual borrows a small sum of money, and writes a post-dated check to the lender to repay the loan plus the interest charged for borrowing the money. Why it’s risky: The interest rates on payday loans are incredibly high. According to the FTC, the APR of a payday loan can be over 390%. If by the time payday rolls around, the borrower still doesn’t have the money to pay the loan, they will be charged more interest and fees. The longer it takes to repay the loan, the more finance charges are added, and what started as a small loan can quickly spiral into a massive debt. If you’re in a pinch and you need cash, you may think about turning to one of these options. But, whenever high interest rates are involved, you run the risk of getting into a situation where your balance grows to an unmanageable amount. Instead, try to focus on budgeting and creating an emergency fund so you’ll be better prepared if faced with a crisis.

If you feel like you’re overwhelmed with debt certified credit counselors are available for a free credit counseling session.

Melinda Opperman is Senior Vice President of Community Outreach & Industry Relations, Springboard Nonprofit Consumer Credit Management, Inc; and Executive Director, Springboard Education Foundation. Springboard Nonprofit Consumer Credit Management is a member of the National Foundation for Credit Counseling. To schedule an appointment with a certified financial counselor call 800.431.8157, or visit Springboard’s website at www.credit.org.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

By Ashley Hagelin

I am a dog person. Like, my dogs are my kid’s kind of person. When people ask me about my family and how many kids I have I always include my pups. It’s the way it should be! So when I hear about people that get a puppy and get rid of it after a certain amount of time, my heart breaks. Maybe they were surprised by the cost of a pet. Or maybe the dog didn’t blend with their other pets.

When you adopt a pet you are committing to care for your pet’s lifetime of needs, so making sure that you are ready for pet ownership, and finding a pet that is a good fit for you and your family is important. In addition, planning for the expense is important because according to PetMD you are looking at a lifespan from 11-22 years. Here are some short-term and long-term costs to consider as you prepare for the transition to the wonderful world of pet parenthood.

Adoption Fees
A lot of people don’t know that there is a fee to adopt an animal. These fees cover the much needed care for a pet before they find their forever home. Adoption fees can vary widely depending on the type of animal you are adopting, the demand for that type of pet, and care and services that have been provided to the animal (i.e. spay, neuter, microchip etc). Make sure that you are adopting within your budget. Locally adoption fees are anywhere from $25-$400…so set a limit. Going into debt to adopt an animal is not a good way to start your new relationship.

Pet Registration Fees
Most communities require you to register your pet…another one that isn’t widely known! This fee can be a one-time fee or an annual fee of usually less than $20. This is something you can talk about with your adoption facility, or contact your local city or county offices for more information about the requirements in your area.

Pet Deposits
If you are renting a home or apartment or are looking to rent, it is important to know that having a pet will narrow your search to those rentals that allow pets. You will also likely need to put a pet deposit down in order to rent the home with a pet. This can also apply to hotels because if you are traveling with a pet, you may need to pay a little more for the hotel that allows your furry travel companion.

Kennel or Pet Sitters
This is the biggie! As much as I wish they could be, dogs are not people, and therefore aren’t welcome in everyone’s home or business. So, ultimately, most people eventually have to leave their dogs for an extended period of time. And if you don’t have family or neighbors that you can trust, you may need to kennel your pet or hire a pet sitter. Kennel costs average $20-$50 per day. Plus most, if not all, kennels require certain vaccinations that can add up. This will add to your travel expenses, but it is good to know that your pet is in good hands if you are away.

Food and Supplies
It may seem obvious that quality food will keep your dog healthy, but the right supplies are important too. Having the appropriate collars, leashes, and fencing or runner will keep your pet safe. So make sure that you have a plan for their outdoor safety. You will also want to make sure you are providing suitable toys for your pets. This is money well spent because if you don’t provide something for them to chew on or scratch at they will find something of yours to fill the void.

Vet
Regular visits to the vet can add up. Depending on the age and type of pet you have, you will likely see the vet once or twice a year. I can think of a few times in my life where my vet bills topped $500! But don’t skip out. Regular trips to the vet for blood tests and screenings will allow your vet to spot a health issue with your pet before it become an emergency. A trip to the emergency vet will be double what you spend at your regular vet clinic so if you notice there might be something wrong get your pet, go to the vet right away. Something else to keep in mind: as your pet ages, the cost for their healthcare will likely increase.

Preventative Care
Another way to keep your pet healthy is to make sure they are protected from common diseases that can affect your pet. For example, heartworm and tick prevention can be very important for dogs. There is a cost for these treatments, but the good news is you can shop around for the best deal on these on-going medications.

My goal here is not to scare you out of getting a dog or other pet. I just want people to be prepared for the financial responsibility that comes with adopting a pet because there is NOTHING better than owning a dog. Good luck and happy adopting!

Ashley Hagelin is a Certified Financial Counselor and Reverse Mortgage Specialist with LSS Financial Counseling. LSS Financial Counseling is a member of the National Foundation for Credit Counseling.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.

By Gail Cunningham

The NFCC surveyed peoples’ opinions of their mother’s personal finance skills. An overwhelming majority, 67 percent, saw their mother as either someone who is intimidated by money, views managing money as a necessary evil, or has never managed money.

Perhaps the ideal gift this Mother’s Day is a lesson in personal finance. What mothers may not realize is that a lack of financial skills has the potential to negatively impact not only their future, but also that of their children, as negative habits are picked up as readily as positive ones. Mothers have the opportunity to influence multiple generations by improving their own personal financial abilities.

Consider the following statistics:

•             The NFCC’s 2013 Financial Literacy Survey (FLS) results revealed that most people, 33 percent, learned their financial skills at home. 

•             The typical single parent is the mother; therefore the sole responsibility is placed on her to demonstrate and teach sound financial habits.

•             Fewer than half of the states require a course in personal finance for graduation from high school. Accordingly, only five percent of FLS respondents indicated schools were their main source of personal finance skills.

There is no lack of personal finance education materials. The bookshelves are filled with financial self-help information; solid advice can be found online, and NFCC Member Agencies offer free or low-cost education on a variety of topics delivered one-on-one, in a group setting or online. 

It’s never too late to start. The first step is for mothers to take advantage of the opportunities available to improve their grasp of personal finance; then look for teachable moments to demonstrate those new skills to the children. After all, the gift of financial literacy is a gift that lasts a lifetime.

Gail Cunningham is Vice President of Membership & Public Relations with the NFCC.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.