7 Steps to Building (or Rebuilding) Your Credit Rating

September 22, 2016

Building and Rebuilding Credit RatingIt’s a question I hear regularly for people of all walks of life: How to I build (or rebuild) my credit? Follow are some simple steps that can contribute to better credit ratings, whether you’re starting with no credit or have some bad credit history already. The list is not exhaustive nor are the guaranteed to help you (state and federal regulators require that I tell you that).

Free and Easy Steps and Can Help a Little

1. Ask a family member with good credit to add you as an authorized user to their current credit card account(s). You do not even have to use the card (or even ever see it). It has no impact on the family member’s rating, and their good account activity can help your own standing before creditors. Keep in mind, though, that the family member is responsible for any charges made on the authorized user’s card.

2. Some states allow utility companies to report your history of payments to the credit bureaus. You do have to ask, though, and the utility companies are not necessarily required to report, so ask nicely… with sugar and a cherry on top.

3. Correct errors on your credit report. We all have the right to a free credit report from each of the three main credit bureaus (Equifax, Experian and TransUnion) every twelve months through www.AnnualCreditReport.com. You can access your report for free and immediately online, or you can order them by phone or by mail. Check the report for accuracy and dispute negative information that is older than 7 years, that is reporting a balance that has been paid off, or that shows late payments when there were no late payments. Please feel free to contact me, one of our credit counselors, or another nonprofit credit counseling agency for a free credit report review to help you understand what is on your report.

Simple and No- or Low-cost Steps

4. Generally, I suggest that you do not apply for more than one or two new accounts each year, but to start, you might consider a tire/brake store that has its own finance department. Gas station cards are other possible places to start. They tend to be a little more liberal in their application approvals, but they compensate for this risk by charging higher interest rates. If you need to purchase tires for your vehicle anyway, save up the cash, apply for the loan at the tire store, and then pay off the loan almost immediately. Some well-meaning so called experts will tell you that you should not pay off the loan because you need to establish a history of on time payments. To maximize your credit rating, this may be true, but you do not need to maximize your rating; you just need to build it. If maximizing is your chosen way, it means you’ll end up paying interest, so to minimize interest payments try this. Once your account is approved, register with the lender for an online account, link it to your bank account, pay off all but $50 or so, and then make $15 or so payments until the account is at $0. This will give you 6 or more months of payment history while also minimizing the interest you are charged.

5. Retail store cards are also generally easier to qualify for. Just do not make purchases for the sake of building your credit. Make purchases that you would have made anyway. JC Penney is one example. Let’s say you were going to may a $50 purchase there and that you already had the monBuilding and Rebuilding Credit Reportey saved in your checking account or in cash in your purse or wallet. When applying for an account, they might give you a discount on your first purchase. Don’t go crazy. Keep the purchase to way you would have purchased without the discount. Then, after being approved, do not even leave the line. Inform the cashier that you would like to pay off your account balance right then and there. This way, you leave the store with a new open account in good standing with no balance and a payment history. If you waited to pay until the bill came in the mail, chances are you would have spent that money elsewhere and would then be in trouble trying to come up with the minimum amount due. Other stores that tend to have lower approval standards include Ann Taylor, Bath & Body Works, Express, Gamestop, Loft, and Victoria’s Secret, among others using Comenity Bank. Target’s Red Card can also be an effective place to start.

More Expensive but Effective Steps

6. Finding a secured credit card can help, although they usually come with high annual fees (sometimes even monthly fees). Just make sure that you get it in writing that the card company will report your credit usage history to all three consumer reporting agencies.

7. Some banks and credit unions offer credit building loans of $500 to $2,000. They typically require proof of employment. After approving your application, they place all or part of the loan into a secured savings account that you cannot access until you have paid the entire balance due. While the secured savings account earns interest (pittance), you are likely paying 8% to 15% or even more on the loan. Still, that’s better than the corner finance store that will charge 20% to 30% or more and makes it as difficult as possible to pay off the loan.

Don’t Forget the Basics

Regardless of the above steps, the fundamentals of building (or rebuilding) credit remain in place:

  • Make at least your minimum payments on time
  • Pay down (or even better, off) your balance every month
  • Don’t apply for too many accounts within a short period of time (1 to 2 a year is reasonable)
  • Get current on accounts that are late
  • Do not close accounts that are in good standing

These do not account for all possible ways to build or rebuild credit, but they provide a generally good strategy. If you have some ways of your own, please feel free to share.

Have a great week!

Todd Christensen-Author of Everyday Money for Everyday People, Todd ChristensenTodd Christensen
Everyday Money for Everyday People

Ever maxed out your card? How quickly?

Have you ever maxed out a credit card?

Ever maxed out your card?I have shared in my book, Everyday Money for Everyday People, and often in my workshops, that I learned about credit cards the hard way. I maxed out my first credit card in a matter of hours (36, from what I recall, at a music store buying a keyboard synthesizer, stand, and studio monitors). I missed payments, was sent to the card company’s internal collections department, and eventually worked out a repayment plan for less than what I owed. And that was just one of several cards I had in my twenties. Needless to say, my credit rating spent most of my twenties in the tank. Fortunately, experience can be a great teacher, and I’ve learned a thing or two since.

How about you? Have you ever maxed out a credit card? If so, how quickly? Please fill out the following poll and then consider sharing an experience in the comments below.


Thank you!

Todd Christensen-Author of Everyday Money for Everyday People, Todd ChristensenTodd Christensen
Everyday Money for Everyday People

Everyday Money for Everyday People Webinars Now Available

We are thrilled to announce that as of Monday, June 27, all eight webinars in our Everyday Money for Everyday People series of free online workshops is available at www.debtreductionservices.org/resources/education/webinars. Click here.

Everyday Money for Everyday People Webinars

Ranging from 27 to 57 minutes in length, these webinars are pre-recorded, available 24/7 and may be accessed from any device that can play Youtube media.

Also available without charge are the corresponding handouts and a certificate of achievement for anyone who successfully completes all eight corresponding 5-question quizzes with scores of 80% or better.

Ideas for using this certified education program include:Everyday Money for Everyday People Webinars

  1. Family self-sufficiency clients of housing authorities can take them to show progress in financial education
  2. Teenaged children can take the webinars in support of a parental discussion about personal finance
  3. Teenaged children can complete the webinars as a pre-requisite for being “ungrounded” wink-pixabay-100x100
  4. Case managers can include the completion of this series of webinars as part of the client’s case requirements
  5. Employers can require repeat paycheck advance employees to complete this series as a pre-requisite for further assistance
  6. Nonprofits can incorporate one or more or all of these webinars into their service programs

Topics include:

  1. Establishing a Financial Vision: Giving motivation and direction to our financial goals
  2. Turning our Budget from Foe to Frenemy: Housing budgets
  3. Credit or Debit or Cash? Oh My! How to match your spending methods to your personality
  4. Building credit: Understanding your reports and scores and what tools are available for building them
  5. Dealing with Debt: Prevenging, Minimizing, and Eliminating Excessive Consumer Debts
  6. Simplified Savings Strategies: Automating the NUMBER ONE most important financial habit you can develop
  7. Dollar Dumps and Spending Barriers: Plugging Spending Leaks in our Household Budgets
  8. Money Spouse Child: Family Relationships and Money
  9. Bonus: From I Owe U to I Owe Nobody: Minimizing and Eliminating Student Loans
  10. Surviving Unemployment: Minimizing the Financial Impact of Being Unemployed

Everyday Money Certificate of AchievementUpon successful completion of the eight webinars and their quizzes, you will receipt an emailed  Certificate of Achievement as proof of your accomplishment.

If you have any questions about this course or our other free online courses (Real Solutions and Financial Empowerment), please do not hesitate to contact us.

All the best,

Todd Christensen
Everyday Money for Everyday People

And the First Bennie Award Winner Is…

Bennie Award for Financial Responsibility

The First Bennie Award: Zootopia

Over the weekend, I watched the newest addition to our family’s Blu-Ray library: Zootopia. How could you go wrong with a movie about having a dream and working hard to achieve that dream, especially when it involves a cute-as-a-button (I know, not PC) bunny and a smooth talking fox thrown together as partners to solve a sinister plot of savagery? If you have not seen it, don’t worry. I’m not going to reveal the plot line.

Here are a few of the reasons why Zootopia deserves a Bennie Award:

  1. Goals: Whether you’re wanting to become the first bunny in the police department or whether you want to improve your financial situation, goals are critical. A goal unwritten remains a wish unfulfilled. So write it down, share it and then report on your progress to someone you trust. Click here to check out this study from Dominican University in Northern California about how to increase the likelihood of achieving your goals.
  2. Frugality: When “Carrots” gets her first apartment in the big city, she revels in the minimalist lifestyle, noisy neighbors and all. Too many young people (myself included decades ago) are too intent on starting at the top. They want the best apartment, the pool, the weight room, the new furniture and more. Unfortunately, the cost becomes burdensome and can lead to financial frustrations and challenges. Kudos to you, Officer Hopps, for your realistic and practical start to your independence!
  3. ResourcesZootopia does a great job of teaching us the importance of maximizing our resources, financial or not. Officer Hopps, left without the support of her superiors, turns to community resources (human resources… so to speak) to find assistance in cracking the case.
  4. Integrity: Did you notice that Office Hopps made sure to play by the same rules by which she expected others to play? To whom did she give parking ticket 201? Too often, we start out by thinking that the “system” does not pertain to us and that we need to find ways around it. Integrity in the face of the system leads to trusting relationships with those around us. We absolutely need trusted friends, coworkers, and colleagues to reach most of our life goals.

There you go! Bennie Award #1. Congratulations, Zootopia and Walt Disney Pictures, for such an enjoyable and financially educational film. It is a lesson in understatement with regards to personal finance, but it remains an effective classroom.


Todd Christensen-Author of Everyday Money for Everyday People, Todd ChristensenTodd Christensen
Everyday Money for Everyday People

Bennies and Burnies – Awards for Personal Finance in Entertainment

BurnieBennieIntroducing the Bennies and Burnies

Have you ever seen a movie, heard a song, watched a TV show, video game or come away from an entertaining Youtube video thinking, “Yah, right! Real people can’t afford to live like that!”

Yes, I recognize that our experience with entertainment, particularly with movies and TV shows, requires us to willingly suspend our disbelief. We know monkeys cannot fly. But dress ’em up in shiny vests and show them flying into the sunset in pursuit of our sweet and innocent protagonist, and they can make cameo appearances in our own adult nightmares decades after seeing them pull apart a talking scarecrow.Debt Reduction Services Inc

When it comes to money, though, many movies, TV shows, and even songs and Youtube videos ask us to go way beyond this call of duty. They may ask us to believe that money is not even part of life, that working is too minor an issue to even mention, or that it’s simple to become a millionaire (or the opposite, that it’s impossible for a “normal person” to build financial security through hard work and persistent investing). Granted, it is entertainment, and it requires that the story be packed into a 20-minute show or a 90-minute movie or a 3-minute song.

Still, every once in a while, I see a movie or show or hear a song that makes me want to stand up and cheer for its realistic AND motivational portrayal of how to build financial stability or to build wealth. I just feel like someone should to give them an award.

Then, there are those that make me cringe, that perpetuate the attitudes and behaviors that keep or lead so many of us into financial hardships. Again, I want to shout it from the rooftops, “Why?! Why?! Would a little financial reality and literacy really be that hard to incorporate into entertainment?” Someone, again, needs to recognize such “achievements.”

So, in the spirit of the great American tradition of critiquing virtually anything and everything, I present our newest tradition here at Debt Reduction Services Inc:

The Bennies and Burnies awards!

BennieThe Bennie Award: A Bennie, in honor of that great American patriot and purveyor of sound financial wisdom and life skills times, Benjamin Franklin, will recognize movies, shows, plays, books, video games and songs (works of fiction) that promote sound financial capacity building habits, attitudes and behaviors.

BurnieThe Burnie Award: A Burnie will recognize movies, shows, plays, books, video games and songs (works of fiction) that promote unsound and even dangerous habits, attitudes and behaviors with regards to financial capacity building. Why the name “Burnie?” Take your pick. We can burn through money. We can get burned by scammers. There is even a guy with a similar name that is forever linked with poor investment choices.


“Buy Me a Boat” Chris Janson Song (2015)

The First Burnie Award

Okay, so I started working on a Bennie award program back around 2010 or so, but it never panned out. I was overly ambition and I see the wisdom my executives had in curbing my enthusiasm a bit. Everyday Money for Everyday People blog, though, provides the perfect medium for these awards.

Last week, as I was being served by an establishment in Boise, Idaho, they had a country station playing on the radio. The song that I remember hearing is entitled, “Buy Me a Boat,” by Chris Janson (2015, iHeart Radio Award for Country Song of the Year). As I listened, I was transported by to days of my youth, waterskiing on the lakes and waterways of northern California in the summertime.

Then, I began to pay attention to the lyrics beyond the catchy chorus. Here are the reasons why “Buy Me a Boat” has earned a Burnie award as a song promoting behaviors, attitudes and habits that distract from a healthy relationship to money and from the ability to build financial stability:

  1. “I damn sure wanna be working like a dog all day, ain’t working for me.”
    Why: Sounds cliché, but discouraging a hard work ethic virtually guarantees you won’t have a very financially stable adulthood.
  2. “I wish I had a rich uncle that’d kick the bucket.”
    Okay, beyond the morbid reference, this speaks to the base desire to have everything we want for free. Consider your neighbor’s  spoiled brats. You already know why they’re spoiled. They get everything they want without working for it and don’t appreciate what they get. We be spoiled too if we were given everything for nothing (sounds like a line from a country music song).
  3. “And that I was sitting on a pile like Warren Buffett.”
    As if to suggest that Mr. Buffett, the Oracle of Omaha, didn’t earn that money the hard way? By the way, Mr. Buffett doesn’t sit on a pile of money. He still lives in the same nice but modest home he purchased decades ago before becoming America’s second wealthiest man. He is past retirement age and still loves to work his tale off for the company he built.
  4. “I could change all that if I had a couple million dollars.” This is one of the most pervasive attitudes I wish we could change in this country. Every American knows that  throwing money at a problem does not solve the problem. Administrations at local, state and federal levels, of all parties, have proven this point time and again over the years. It is no different at the personal level. I could almost guarantee that if someone who is not disciplined with a small income all of the sudden had a couple million dollars to spend, they would be broke or even further in debt within a year. Don’t believe me? Do an Internet search for “Lottery winner back where they started,” and you’ll find plenty of stories.
  5. “Money is the root of all evil.”
    Let’s get this straight, please. The correct quote from 1 Timothy 6:10 is, “For the love of money is the root of all evil…” Money is a tool. Having a lot of it is not evil. It’s the greed for money that leads to problems (like wanting a truck and a boat so bad, you might be willing to do what for it?)
  6. “I hear the Powerball Lotto is a-sittin’ on a hundred mill…”
    See #4 above. That’s all I’m sayin’.

There you go! Burnie Award #1. Congratulations of such a low achievement! Enjoy the boat while you may. The repo man is on his way.

Sounds like the perfect start to the next verse.


Todd Christensen-Author of Everyday Money for Everyday People, Todd ChristensenTodd Christensen
Everyday Money for Everyday People

Debt Repayment Options

The Visual

DMP vs Other Repayment Options

If there were an option to get out of debt quickly, painlessly and in a way that was likely to succeed, there really would not be so much confusion about how to get out of debt. There would be a tiny gleaming gold star in the top right hand corner of the above graph. Unfortunately, there is no such option. Paying off debt, unlike getting into it, takes time or effort or extra money, or more likely all three.

Anyone wanting to get out of debt needs to answer the questions for themselves about how patient they are willing to be in paying off their debt, how much risk they’re willing to take to do so, and if they understand the potential consequences (pain and costs) associated with the option of their choice.

What Are the Options?

  1. Card-Barbed WirePay as Agreed: Generally, this is the best option for most people. It is highly effective and, unless there are penalty (“default”) rates and late or over limit fees involved, it is also typically one of the cheaper options. If the debts involve interest rates in the mid-teens or higher, though, repaying an average $10,000 credit card debt will mean spending at least twice as much in interest to get rid of the debt (plus 25 to 30 years).
  2. Credit Counseling Agency (Debt Management Program): (Disclosure: I am an employee of a nonprofit credit counseling agency called, Debt Reduction Services, Inc.) A Debt Management Program (DMP) through a nonprofit credit counseling agency (CCA) can be highly effective, especially for consumers with regular income and high interest rates. The CCA negotiates lower interest rates and better repayment terms for the consumer with credit card debt, collections (medical or otherwise), payday loans, personal loans, old utility and cell phone accounts, etc. (exceptions are home loans and car loans, while students loan counseling may be provided separately). The debt has to be paid off in 5 years or less. There are some reasonable fees involved, though they are typically counterbalanced by the lower interest rates and the elimination of late fees. Of course, I’m going to highly recommend our agency, Debt Reduction Services, Inc. To find other trusted credit counseling agencies, check out the Financial Counseling Association of America or the National Foundation for Credit Counseling.
  3. Bankruptcy: Among the quickest and most reliable ways of getting rid of debt, bankruptcy is also generally held to be the most painful. It is the single worst event on our credit reports, meaning that any mortgage or other loan we try to qualify for in the following decade will be more expensive if even approved at all. Bankruptcy may also negatively impact one’s ability to get jobs (e.g. law enforcement, finance, government), one’s military security clearance, and even the premiums we pay for car insurance. While you can file for bankruptcy on your own, we highly recommend contacting an attorney who specializes in bankruptcy law. Yes, they charge a fee for their service, but you can call around and find a professional that will help you and work out the best payment arrangement for your circumstances.
  4. Consolidation Loan (Including a Home Equity Loan, a Line of Credit or a Credit Card Balance Transfer): There is a misconception that someone with a lot of credit card debt can find a consolidation loan to simplify the repayment process. There are three reasons consolidation loans are not usually a good option: 1) They are difficult to qualify for, since most lenders see them as highly risky loans, 2) They can carry some pretty hefty interest rates because of the risk the lender is taking, and/or 3) Most importantly, 70% of people who pay off their credit card debt with a consolidation loan or another credit card will run their credit card debts back up to their original balances within just two years.
  5. Debt Settlement: Debt settlement companies (for profit or nonprofit) advise their clients to tell creditors to cease all contact.  They then collect a monthly payment (including their own not insignificant fees)  until they feel they can offer about 50% of the original debt amount to the creditor in order to “settle” the debts. Settlement companies typically require their clients to owe at least $10,000 in debts. It’s certainly common that such clients end up sued by their creditors, who then can garnish the consumer’s wages and take a portion of their tax refund. Even in the small number of cases where such events are successful (usually held to be in the single-digit range), such an action has a significantly negative impact on the consumer’s credit rating. Finally, consumers have a difficult time finding a legitimate settlement company because regulators can hardly keep up with the fraudulent services. See the FTC warning here.
  6. Lottery: The odds of winning are so remote that I wish I didn’t have to address it. Unfortunately, millions still think they’re going to be the one, because, “hey, somebody’s got to win, right?” One or two people usually win and make it on TV. What about the other 100 Million people? Do yourself a favor, see if you can win Deal or No Deal 3,000 times in a row without missing a single case, or get struck by lightening 7 times in a 15 year period and survive, and then you might just be lucky enough to play and win the lottery. Otherwise, take the $10 a week you might be spending on such gambling and invest it. You have probably a 95% chance of doubling your money. There’s probably even a 1% chance that you will have quadrupled it or more. Compared to the lottery, that’s as much of a sure bet as you’re going to get.
  7. Ignore: Closing your eyes in the midday sun does not make it night time. Unfortunately, too many consumers with debt essentially do the same thing. They hope that “something” will come along and help fix their debt problem. The reality is that the longer you wait, the worse the debt gets and the fewer the options you’ll have. After a couple months of late payments, credit card companies will likely raise their interest rates so high that Paying as Agreed will no longer be a possibility. After three or four months without making a payment, the consumer may not be able to get their account on a debt management program (although many collection agencies may still work with the CCAs).

Debt Reduction Services IncCall Debt Reduction Services Inc TODAY toll-free (877) 688-3328 and get started on the road to living debt free. Whether we can help you with our free budget and credit review counseling so you can pay off your debts on your own, or we can help get you started on a Debt Management Program, or even if you think you might be looking at bankruptcy, each of these options can begin with a conversation with our certified counselors.


Todd Christensen-Author of Everyday Money for Everyday People, Todd ChristensenTodd Christensen
Everyday Money for Everyday People

Best Odds of Winning with your Powerball Money

Savings is a commitment, not an amount.A Sure Bet to Lose Your Money

One in nearly three hundred MILLION!!! 282,201,338 to be fairly exact. Those are your chances of winning the grand prize (tonight’s Powerball Powerplay jackpot of $1.5B). If you’d be happy with the $1M prize, then your chances are just one in 11,688,053.

For perspective, if you were to buy 4 Powerball tickets a week ($12 total) for 15 years, you might think your chances are pretty good of winning, right? In such a case, you have the same chance of winning the Powerball jackpot at some point during those 15 years as you do of picking the top $1,000,000 briefcase in Howie Mandel’s Deal or No Deal gameshow 3,600 times IN A ROW!!! Yeah, good luck with that.

Go stand next to a tall tree four times a week during a lightning storm, and your chances of being injured by lightning are still 343 times greater than winning the Powerball. Or you could just stay inside and not rely on chance at all.

Play nine holes of par 3 golf every week for fifteen years, and you might be lucky enough to get 2 holes in one to brag about (and the bar tab in the clubhouse to go with it). Those odds are still nearly 53 thousand times better than winning the Powerball in the above scenario.

A Better Way to Double Your Money

Piggy-Bank-Fast-100pxPut that same $12 a week ($52 a month) away into an average mutual fund (returning 9% a year), and you have a nearly sure bet that you will have 100% MORE money after 15 years. You put in $9,360, and, after a few fees, the market turns it into nearly $19,000. There’s even a pretty small chance (although huge compared to the Powerball odds) that the stocks you pick will return 40% a year, turning your investment into over $500,000 over a 15 year period.

Just keep in mind:


Start today with $12. Add another $12 next week, another $12 the week after, and you’re already putting $52 a month into savings. That’s over $600 a year! Couldn’t you use $600 when the car needs tires? The washer needs replacing? The kids head back to school?


Have a great day!

Todd Christensen-Author of Everyday Money for Everyday People, Todd ChristensenTodd Christensen
Everyday Money for Everyday People


Better Odds of Being Happy Now than Winning Powerball Tonight

Savings is a commitment, not an amount.A full 60% of Americans have NO habit of savings (www.usfinancialcapability.org). Yet how many such Americans are playing the lottery this week?

If you find yourself among those 60% who have no emergency savings plan, please do us all a favor and start your savings habit today with the money you would have spent on that ridiculous lottery ticket. A favor to us all? Yes, our collective lack of savings means we – fellow consumers and sometimes even as tax payers – foot the bill for many bankruptcies and uncollected debts that individuals and households might otherwise have been able to handle had they had even a small savings account fund. Billions of dollars are discharged in personal bankruptcies every year, meaning our favorite places of business must raise prices, loan rates, and other costs in order to compensate.


Powerball LotteryTo the winners of the upcoming lottery, may your unearned and unmerited new wealth bring you more happiness than you have now, although the odds indicate that a large percentage of lottery winners (already unaccustomed to and uncomfortable with any amount of wealth) find themselves in just the opposite situation. Check out some of their stories:

Gambling-GreedDo yourself a favor. Put a few dollars in a savings account. It will bring you a small measure of satisfaction. Otherwise, if you’re not happy with who you are currently and the financial direction you’re headed now, playing the lottery (and even winning the lottery) to change that is not going to make you a better person or necessarily even a happier person. What it will do is press all of the social cockroaches out of the walls of your past and send them scurrying to your door looking for an equal cut of your money. After all, what did you do any different than they to actually earn the money? Pure luck! And luck is a tough sell to the desperate and to the greedy alike.

The winner’s initial exhilaration will likely be followed by a lifetime of the same worries about money they now have, just multiplied many times over. Compared to the lottery odds, that’s a pretty sure bet!

Have a great day (and save your money)!

Todd Christensen-Author of Everyday Money for Everyday People, Todd ChristensenTodd Christensen
Everyday Money for Everyday People


From Time Share Paradise to Time Share Hell

I recently received a question about selling a time share that had become a financial burden, and rather than respond to just the one reader, I think this topic deserves more attention.

Several years ago, following a bankruptcy attorney conference where I was an exhibitor (I’m not an attorney), I shared a cab back to the airport with a gentleman who was an attorney. During our conversation, I asked him about the “minimum” consumer debt attorneys usually look for before counseling a consumer to file for bankruptcy. His response was apropos: 1) $15,000 or more in credit card debt, 2) a home loan, 3) probably a car loan, and… oh yeah, 4) a time share.

These numbers obviously vary from attorney to attorney and case to case, but his wry remark about the headaches of owning a time share has made my wife and me think twice about pursuing new time share and vacation club opportunities ourselves.

AirplaneIn basic terms, Time Shares are real estate ownership agreements that give the buyer(s) a specified number of days or weeks at the time share resort each year. There are purchase fees and annual maintenance fees. Deeded timeshares (actual property ownership) do not expire and require the owner to pay annual fees in perpetuity. Non-deeded timeshares may eventually expire but still give the owner the right to use the resort for the specified amount of time each year.

Here’s the problem: unlike most real estate ownership, time share values decrease over time, since demand is usually higher for newer, bigger and better resorts. And while the time share value drops, maintenance fees do not.

What this means is that if you’re in the market for a time share, look for “used” time shares. There are thousands available essentially for “free” (yes, the owners are wanting to give away their ownership). Take this as a warning, though. Such resorts may not have the clean, fresh and new feel most people look for on their vacations.

For those wanting to sell their ownership, there are sites such as sharket.com, RedWeek and time share user groups. Sales usually involve contracting with a realtor who specializes in time share and with closing companies, though it’s possible to effect a sale-by-owner through eBay or craigslist. However, personally, I’d be hesitant to send money to anyone selling “time” on such sites, as there are plenty of scams looking to take money from would-be vacationers in exchange for a promise of a little bit of paradise.

Besides not being a bankruptcy attorney, I also not a time share aficionado. But my advice to anyone considering buying a time share would be this: be patient and do some research. NEVER buy while on vacation. Those “exclusive” deals the resorts offer to their current guests are often over priced to begin with. Also, think long term. If your vacation habits are likely to change in the coming five to ten to twenty years (more children, less children, health considerations, etc.), locking yourself into a permanent “deeded” time share may not be your best option.

For those looking to sell, be aggressive in your strategy. Contact the resort for any assistance they may provide. Find a professional realtor. Do your research. And don’t wait. The longer you take to sell it, the more likely you are to pay more annual fees.

Good luck, and safe travels!


Todd Christensen-Author of Everyday Money for Everyday People, Todd ChristensenTodd Christensen
Everyday Money for Everyday People

Consumer Spending Problems more than just Buying Stuff

Time to Rethink Consumerism?
Earlier this year, I took over responsibility for managing our bankruptcy counseling services. This service has been a requirement for bankruptcy filers since a 2005 update to our bankruptcy codebankrupt. As a result, I have been able to look over a lot of data about bankruptcy filers’ financial circumstances as they begin the process.

What I’ve discovered is that most people filing for bankruptcy have a legitimate reason for doing so: job or business loss that lead to drastic, long-term income reduction; excessive medical-related expenses; dealing with divorce that, besides getting ugly, gets really expensive; or unexpectedly losing a loved one who was the primary income earner.

However, about one in four filers have simply made some poor financial decisions over the years. And as the saying goes, many of us, but for the grace of God, could easily have gone that same route. The easiest item to blame is usually credit card debt (although I would typically put it behind unaffordable home and auto loans when it comes to causes of financial troubles). We have to remember, though, that consumers don’t go into credit card debt just to have credit card debt. Credit card debt usually results from overspending on consumer goods AND services.

cabinet-TVThe next easiest target to focus on is cable and satellite television service. While it’s pretty common to see such monthly bills in the $120 to $150 range in the budgets of bankruptcy filers, that doesn’t mean it’s a good idea for the rest of us. Many of us (myself included) haven’t paid for television in decades, and somehow we continue to survive and even enjoy live. For most people, locking themselves into a long-term contract at these levels should probably come somewhere way down the list of priorities past saving for emergencies, preparing for retirement, saving for Christmas and our next transportation emergency, (not to mention food, clothing, utilities and transportation). And we can’t blame these high costs on being forced to get the “package deal.” Just because a company says that bundling will save us money doesn’t mean it will. Paying for the extra service (usually a home line) means we’re paying more, not less. Virtually all companies offer an Internet only option; they just don’t advertise it much. If you’re paying more than $40 a month or so for Internet access, you’re probably paying too much. It’s time to put on your “incensed” hat, call the provider and insist on a better deal.

The other three biggest expenses that never cease to amaze me when I see them in bankruptcy filers’ budgets are, in order of what I consider the most damaging: 1) Massive car payments, 2) Large dining out expenses and 3) Excessive cell phone bills.

  1. car-keys-pixabay-600x400From whatever angle you want to try to justify it, it is unreasonable to expect that a household earning $25,000 or $35,000 a year (or even arguably $60,000) can afford a $400 monthly car payment. Yet we often see households in this income range that have two car payments totaling $700 a month or more. Add full-coverage car insurance premiums, gasoline, vehicle maintenance, and licensing/registration, and some households are paying as much as half of their net income toward their transportation costs. Some might ask what the point of going to work is if you have to spend the first half of your day just earning enough to pay for you to get there in the first place. Very good question!
  2. dining-wine-pixabay-400x225Usually, what we see when it comes to large dining out expenses is a household that has lost a very successful business or high paying job and that has not adjusted their lifestyle to their new reality. When a household drops below median income levels (probably in the $45k to $55k range, depending upon your state), it becomes hard to justify even $100 a month on eating out. Still, that’s a lot of Scooby snacks!
  3. smartphone-pixabayThere was a time in the fairly recent past (and I say recent because I can remember it) that cell phones were a thing of science fiction that later became a status symbol for the well-to-do. Not only does virtually every American adult (and there are exceptions, of course) now carry a cell phone, but the majority now have smartphones. While the minimum monthly service bill for a smartphone runs in the $50 range, give or take, we regularly see households with cell phones that average $150 per person! Zoink’s Scooby! Like, that’s a lot of money! It’s not the cell phone service that’s killing their budget. It’s the leased phone or the brand new phone financed into the payment every two years or so. Whether or not we want to believe it, the reality is that most of us can use the same smart phone for 5 years or longer. Will it be the latest and greatest? No. Will it have a crack or two in the screen? Likely. But it will not tip us toward bankruptcy.

I guess this is a long post to simply say what other financial experts say over and over and over as well: let’s chilax with the hyper-consumerism. Let’s stop obsessing about the latest phone or tablet or phablet. I admit that I’m guilty of it myself sometimes, but bigger doesn’t mean better. Neither does buying something newer mean we’ll be happier. Seriously, how did our parents’, grandparents’ and great-grandparents’ generations ever find a reason to smile before the popularity of smartphones (2000s), the expansion of cable television (1980s) and the introduction of automobile loans (1920s). Oh yeah, restaurants have been around since ancient times! Bon appétit!


Todd Christensen-Author of Everyday Money for Everyday People, Todd ChristensenTodd Christensen
Everyday Money for Everyday People

New Webinars Available

New Webinars Now Available
Check out our newest recorded webinars, corresponding quizzes and handouts now available to view on our webinars page. Here are the new webinars in the past month:

  1. From I-owe-U to I-owe-Nobody: Minimizing and Eliminating Student Loan Debt
  2. Surviving Unemployment: Minimizing the Financial Impact of Being Unemployed
  3. Turning Our Budget from Foe to Frenemy
  4. Credit or Debit or Cash? Oh My!
  5. Dealing with Debt

All of these webinars are free. They’re appropriate for anyone who handles their own money (including most teenagers). As pre-recorded webinars, they are accessible 24/7. You can move forward and backward  within the webinar as you choose. Most webinars last between 40 and 50 minutes. If you need a certificate to prove you completed the webinar(s), we can also provide that upon request.

Please share these valuable free resources with those in your life who could benefit from such tools and information!


Todd Christensen-Author of Everyday Money for Everyday People, Todd ChristensenTodd Christensen
Everyday Money for Everyday People

Want What the Wealthy Have? Try this Quiz

Start with Their Habits

Savings is a CommitmentResults from an interesting “study” (almost more of a survey) out today from Thomas Corley, author of Rich Habits – the Daily Success Habits of Wealthy Individuals, should be a required study project for all middle school students. In an age where glitz is glorified and bling is beautiful, Corley’s reality check is refreshing.

I work with many individuals from low-income households, in addition to working with professionals who serve similar communities, so I am better aware than most of the challenges faced those facing poverty, especially those in generational poverty. The frustrations I hear expressed by individuals in such circumstances can be heart breaking, which in turn motivates me to do what I do.

At the same time, when I hear individuals from all socio-economic levels express their hopes to be rich, to drive fancy cars, own mansions, never have to work again, etc., I get frustrated. It is clear that we need to take advantage of every opportunity possible to combat the notion that living a pampered life is what the wealthy do, that they’ve inherited their wealth, and that they don’t need to work.

Let’s see where you stand. Take the following quiz to see which direction you’re heading, toward poverty or toward wealth?

Once you’ve completed the quiz and got your score, click here to find out what your answers reveal about the financial path you’re taking in life.

Thanks for stopping by today. Please share this article with friends and family in your network.

Todd Christensen-Author of Everyday Money for Everyday People, Todd ChristensenTodd Christensen
Everyday Money for Everyday People

*Many financial advisers suggest never paying off your mortgage since interest rates are typically much lower than the return you’re likely to earn on securities investments. Unfortunately, as too many learned during the housing downturn of the Great Recession, owing more on your home that what it’s worth takes away many importance choices the homeowner might want to make. For example, if you owe more than what your home is worth, moving away to take another job is often out of the question.

Results of Wealth Quiz

So, How Did You Do?

(This page is meant as a follow up to a “Wealth” quiz published June 10, 2015)

The closer you scored to 100%, the more your current lifestyle and financial decisions are in line with those of the wealthy.

  • 80%-100%: Keep it up! While life may through you some curve balls from time to time, you have the right attitude and personality to improve upon what life has given you. You are a thorough believer that life is what you make of it. Luck is for others, because you make your own every day, hour by hour, as you work to improve upon your circumstances. Just don’t forget to pass the wealth of knowledge along to the next generation. Your way of thinking is teachable and needs to be relayed to the children and grandchildren in your life.
  • 50%-70%: Room for improvement. While you generally behave like the wealthy and that you typically don’t go overboard as a consumer (Consumers vs. Builders), you may lack the resolve to see it through. You still believe, to an extent, that luck has a lot to do with becoming wealthy, although you’re usually willing to do your part. That’s what the occasional lottery ticket is for, right? Keep in mind that, as you sometimes suspect, wealth is not all it’s cracked up to be. Sitting on a tropical beach, sipping your favorite drink, watching the sun set on another perfect day is something the even wealthy don’t experience as often as you think. Do some follow up research to learn what the wealthy (not those on TV) are really like. Check out Tom Corley’s blog, Jean Chatzky’s book, The Difference, Stanley and Danko’s, The Millionaire Next Door, David Bach’s, Automatic Millionaire, Harv Eker’s, Secrets of the Millionaire Mind, Lee and McKenzie’s, Getting Rich in America, and even Benjamin Franklin’s, The Way to Wealth and Other Writings on Finance, to name a few.
  • 0%-40%: Generational poverty aside (which is a huge request in and of itself, I grant), you would do well to reorient your beliefs about what it is to be wealthy. The wealthy are not generally the same as the Kardasians. Professional athletes, music stars and actors are not representative of the wealthy. They are the exceptions… by a long shot. Unfortunately, given their high public profile, they are what you likely associate with financial success. As you see it, life gives you talent or not, and then luck takes over. You probably believe that financial success is determined at birth, and you may very well see that become a self-fulfilling prophesy. The reality, though, is that you have it within you to make the changes in your attitudes and your actions to get on the track to wealth. The question is, is that really what you want?

“If you want to BE wealthy, you need to start ACTING wealthy.”

This is a true statement. However, most people who are not wealthy, once they find out what ACTING wealthy really means, are just as likely to have a change of heart about BEING wealthy. “If there’s no sports car, brand name clothing, and mansion guaranteed, what’s the point?”

The point is, wealth is not about consuming. It’s about building. Wealth is security: security against those curve balls (and fast balls and knuckle balls) that life will inevitably throw your way. Wealth is freedom: freedom to attend your family’s most important events, freedom to volunteer for causes that are close to your heart, freedom to take risks on ideas that excite you.

What are you willing to do for such security and freedom? Start with one behavior at a time. Work on it for a month, and then move on to the next. In less than a year, you’ll have developed the beliefs, attitudes and habits of the wealthy, putting you on the same highway they’re on.

Thanks for stopping by today!

Todd Christensen-Author of Everyday Money for Everyday People, Todd ChristensenTodd Christensen
Everyday Money for Everyday People

*Many financial advisers suggest never paying off your mortgage since interest rates are typically much lower than the return you’re likely to earn on securities investments. Unfortunately, as too many learned during the housing downturn of the Great Recession, owing more on your home that what it’s worth takes away many importance choices the homeowner might want to make. For example, if you owe more than what your home is worth, moving away to take another job is often out of the question.

Debt Collections and Consumer Rights

Know Your Rights!

Are budgets liberating or restrictive?

The Federal Trade Commission (FTC) aggressively pursues consumer complaints against abusive debt collectors. This is not a new effort, but it is always pleasing to hear of another bad apple getting their comeuppance.

Collectors Serve a Purpose

To be sure, debt collection agencies serve a legitimate purpose. With approximately one in ten Americans having an account in collection (Federal Reserve Bank of NY), and the average collections account balance totaling nearly $1,500, we’re talking about nearly $15 Billion dollars of outstanding debts that American businesses are owed by consumers. That ain’t chump change! Granted, that mostly involves medical and utilities debts, but that’s money that company’s make up by raising fees and charges to other customers.

Bad AppleUnfortunately, the bad apples can spoil the business for those who are doing things the right way. Here’s a list of abusive practices that run contrary to the Fair Debt Collections Practices Act:

  1. Calling before 8:00 am or after 9:00 pm (or any time that you’ve told them is inconvenient): ABUSIVE
  2. Using profanity or abusive language: ABUSIVE
  3. Threatening you or lying to you: ABUSIVE
  4. Repeatedly calling you with the intent to annoy, abuse, or harass you: ABUSIVE
  5. Telling your friends or family members that you owe money: ABUSIVE
  6. Threatening you with imprisonment or arrest: ABUSIVE (unless there’s actual fraud involved, and not just your inability to pay)
  7. Calling you at work if receiving personal phone calls is against company policy: ABUSIVE
  8. Threatening to take away or garnish your social security, veterans or other federal benefits: ABUSIVE
  9. Continuing to contact you after you’ve sent them a written notice requesting that they cease contacting you: ABUSIVE

For a simple but straight up video about debt collection abuses and your consumer rights, check out this brief FTC video: http://bcove.me/t6s6l7lf

To file a complaint against a debt collector who is exhibiting abusive collection practices, use one or more of the following links:

  1. Federal Trade Commission
  2. Consumer Financial Protection Bureau
  3. Your State’s Attorney General

One of the beauties of the universe is the concept of karma. Often, when debt collection agencies get aggressive with consumers, consumer protection agencies like the FTC or CFPB eventually get VERY aggressive with the collection agencies. I’m feeling all warm and fuzzy just at the thought!

Thanks for stopping by today. Please share this article with friends and family in your network.

Todd Christensen-Author of Everyday Money for Everyday People, Todd ChristensenTodd Christensen
Everyday Money for Everyday People