With an economy that is in a recession that feels like a depression in many cities across the country...the sharks (financial predators) are in the water. Many companies prey off of public fear and ignorance and wanted to provide a "cheat sheet" for all readers to use in case they happen to come across one of these leeches whose only desire is to suck you dry of all of your money for their own selfish advancement. The days of going to ANY professional without being properly educated are over and let's use this most recent recession as a teachable moment for all of us moving forward.
Multi-Level Marketing Companies - "95% of the time get-rich-quick schemes are not effective. Sure there are success stories; however, as in any other job if you are not willing to give it 110% effort you are wasting your money by investing into their system."
Suggestion: Research EVERY new prospective job thoroughly. The more in line with your passion your next job is, the higher the chance that you will be a success.
Pre-Paid Debit Cards - "These are the biggest scams in the book! Why do you have to pay so many fees to have access to YOUR money!? These are NOT a suitable replacement for opening your own bank account where you can have a FREE debit card. If you cannot open a bank account then you need to fix problem that is causing you to not be able to open an account...not seek out an expensive/wasteful alternative!"
Check Cashing Facilities - "Why don't you have your own bank account where you can cash your check without paying excessive fees just to get YOUR money?"
Suggestion: If you cannot open a bank account, join a local credit union with a credit program that will allow you to re-establish your credit and work on correcting the bad habits causing you to tarnish your banking record (bouncing checks, overdraft, etc.).
Rent-A-Centers - "Ownership is power. Owning a home is a commendable goal, but now owning your own DVD is a disgrace! If you cannot afford to purchase an item that is sold at Rent-A-Center SAVE UP! DO NOT purchase an item on credit where you will end up paying more money because of interest! Excessive consumption is bad, but paying interest on excessive consumption is destructive!"
Suggestion: If the item is not a necessity, save up your money until you have enough to purchase the item. Saving is not easy but where there is a stream of money, there is an ability to live beneath our means to provide for your household and savings. Set up a household budget and provide more oversight to your household cash flow.
Cash Advances - "These are legalized loan sharks! They provide the highest and most volatile interest rates available. If used through your credit card or through a provider you will have to pay a hefty premium for those funds. Do not use them ... period!"
Suggestion: You should never wait for it to rain before purchasing an umbrella, purchase a smoke alarm after the fire hits, or consider saving extra money when the need arises. Think proactive by opening a high yield savings account today. In this account you can begin a project to save at least three to six months of living expenses in case of an emergency.
ATM Withdrawals - "Since when did it become okay to make someone else rich because we cannot walk or drive a few extra blocks? Pennies add up to dollars and we need to treat our hard earned money with more respect. We clinch our pockets when we see a homeless person asking for a quarter but we gladly give away $2.00 to $5.00 to a bank because we refuse to search for our own ATM where we pay no fee ... what does that say about our values in this society?"
Suggestion: If ATM accessibility is an issue to you, open an account that has plenty of ATM machines in your area. Go online to become familiar with all your banks ATM locations in your area and plan ahead by having enough cash on your hands when going out.
Mortgage Lenders - "In this capitalistic society we have seen much greed and despicable actions in the quest of a dollar. Why is it that we are so surprised when we fined out that there are mortgage lenders that exist who care more about a dollar then about your financial well being?"
Suggestion: Predatory lending is a detestable act and should not be condoned. However, ignorance should not be condoned either. For many in this nation the home is the largest investment in their life, do not do it without proper education. Hire a good real estate attorney to assist you to explain fully the documents before you sign. Hire a good financial planner to assist you in putting together a home budget because the bank pre-approval system will not do as good of a job as you in discerning your lifestyle and true level of affordability. If you don't have the money for a planner, talk it through with a good friend or an unbiased party who has also gone through the process. Don't rush the decision!
Insurance Agents - "Predatory insurance practices are more common than predatory lending practices but they are small enough to go under the radar of detection. Salesmen are taught to SELL YOU PRODUCTS! If they have a hammer you MUST have a nail is their mentality."
Suggestion: Do not let someone tell you when you are ready to purchase or how much you should purchase. Do your own insurance needs analysis, research various products online or in the library, never sign anything at the first meeting, and when you receive the paperwork take it home and have an unbiased/knowledgeable party go over the paperwork with you.
Fast Food Places - "It has been said that you can find out what one values by looking at his checkbook. You can see how much one values their life by looking at their diet. Just because food is convenient, does not mean it is good!"
Suggestion: With high blood pressure, hypertension, and diabetes becoming an increasing problem, it is paramount that we watch what we eat. This is a key financial literacy issue because the largest cause of bankruptcy is medical bills. Talk to a nutritionist to prescribe a diet that is fit for you, exercise regularly, and make sure that you take care of your body ... you only get one!
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