Is It Okay To Co Sign A Loan?

I am often asked, "Is it okay for me to co sign a loan for a friend or family member?" My answer is always NO! There are several reasons I say no.

First of all unexpected things happen to all of us and it is easy for your friend or family member to get in a situation where they cannot make a payment. A new late on their credit report will also appear on yours and will drop your credit scores significantly. When you co sign for them, they have every intention on making every payment on time but we all know that can change quickly. As I said unexpected things happen that effects us all.

When you co sign, the debt of that loan will appear on your credit report and will be totaled into your debt to income ratio. This can effect your ability to qualify for future personal financial transactions. You become co responsible until that debt is paid in full.

We are all good hearted and want to help a friend or family member when we can, but obligating yourself for the duration of the loan is not a wise decision to make. Unexpected set backs can strain even the best of relationships.

It would be wise to make the decision that you will not co sign for anyone, ever. That way when someone comes to you and plays on your sympathy your decision is already made. You can simply say: "I made the decision a long time ago that I can not co sign for anyone, ever." They may be disappointed but they will get over it and you have protected from a difficult situation.

At HOPE we help our clients make wise decisions every day related to various credit issues they face. If you would like to know more about HOPE please call us at 704-503-3669. We will be glad to help you.

Teaching Kids About Money Part 5

Teaching Kids about Money – Part 5

by Michelle Lambright Black

Today we will be covering one final tip on how to effectively teach your children about money, helping to prepare them to be financially responsible adults.  Don’t forget, you can check out our blog archives for parts 1-4 in this series. 

Lesson #5:  Lead by Example

We believe this is the most important tip of the week, that’s why we have saved it for last.  Children, whether they be young or whether they be teenagers, are usually excellent observers.  Your child will learn more from your example than they will learn from anything else you teach them.  Therefore, if a child sees their parents making unwise financial decisions, such as racking up excessive credit card debt, buying homes and cars they cannot afford, and failing to save for the future, the child will learn to accept this kind of behavior as the norm. 

If you have been guilty of making poor financial choices in the past then now is the perfect time to change.  Beginning today, you can help to erase any bad examples in spending that you may have set for your child before.  By establishing a sound monthly budget now you can begin to teach your children how to handle money more effectively.

If you have any credit issues you may be facing or if you need assistance establishing a working monthly budget for your household please contact HOPE today.  Our specialists would love to assist you.  You can reach us at 704-499-9696 or you may email us by clicking on the following link:  http://hope4usa.com/contact-us-2/.  We can’t wait to hear from you!

Teaching Kids About Money Part 4

Teaching Kids about Money – Part 4

by Michelle Lambright Black

Thank you for checking out our blog today.  If you haven’t already read them, please be sure to check out parts 1-3 of this blog series on our website.  We hope you find our tips for teaching your children about money helpful.

Lesson #4:  Show Your Children How Much Things Cost

Many children, and even some teenagers, don’t truly realize how much things around them cost.  It is important for your child to have a grasp of the cost of things for two reasons.  First, it will help to make your child a more financially wise person, equipping them with the knowledge they will need to one day lead a financially independent life.  Second, if your child realizes how much things cost they can help the family to conserve and stretch its monthly budget.

One way to teach your child how much things cost is to teach them about conserving resources.  You can perform a “show and tell” in your own house showing your child why it is important not to be wasteful with things like hot water, electricity, disposable plates or utensils, groceries, etc.  By teaching your child to be a conservationist they can help the family save money and become a more environmentally friendly person.

Another great way to teach how much things cost is by showing your child a list of the monthly household bills.  You can show your child the bills themselves so that he or she is able to begin understanding the family’s cost of living.  Remember, this may be a little boring to your child, so you may want to find a way to slip a short demonstration of the monthly bills whenever you give him or her their weekly allowance. 

Feel free to leave comments on these blogs if you have found any of them to be helpful or insightful.  We want to know what you think.  Be sure to visit our website again tomorrow one final tip on teaching kids about money.

At HOPE we will help you achieve the credit score you desire so you can qualify for the lowest interest rates available to you. If you would like to know how please call us at 704-499-9696. We are waiting on your call.

Teaching Kids About Money Part 3

Teaching Kids about Money – Part 3

by Michelle Lambright Black

This week we are exploring simple, effective ways to teach children about money.  If you find any of these blogs helpful, please be sure to forward a link to your friends and family. 

Lesson #3:  Open a Bank Account in Your Child’s Name

As we continue discussing the theme of teaching children the value of money, and how to handle that money properly, we believe it is very important to cover the area of opening a bank account for your child.  Opening a bank account in your child’s name at an early age can go a long way in teaching him or her how to properly manage their money in the real world.  A bank account is especially helpful if you have teenage children; however, even children as young as 6 or 7 could benefit from having a bank account.  It can be a wonderful teaching tool for your child.

If you do open a bank account for your child, it is important to allow them to make regular deposits.  You can also set a limit on how much your child is allowed to withdraw from the account.  This is an important rule to remember since it will help to teach your child that just because money is in the bank does not mean that it all should be withdrawn or spent.  Also, if you are using the jar system discussed in yesterday’s blog, Teaching Kids about Money – Part 2, a bank account can be used in conjunction with this teaching technique.  You would simply have your child take the funds from the “savings jar” each week and deposit them into their bank account. 

Be sure to visit our website again tomorrow for more information regarding how you can teach your child to be financially responsible at a young age.  Also, please remember that if you have any credit issues you need assistance with, feel free to contact our caring staff at 704-499-9696.  We look forward to hearing from you soon!

Teaching Kids About Money Part 2

Teaching Kids about Money – Part 2

by Michelle Lambright Black

If you haven’t already read yesterday’s blog, please make sure to check it out when you get a chance.  We laid a foundation yesterday for the subject we will be discussing the rest of the week:  how to educate children about money in a way that will help them grow into financially responsible adults.  Remember; keep coming back each day this week to receive the full benefit of this blog series.

Lesson #2:  Establish the Habit of Saving Early

We discussed the idea of giving your child an allowance yesterday.  However, remember that the allowance your child receives should be supervised.  As a parent, you can use these weekly funds to teach your child a valuable lesson.

One simple way to teach your child how to save is by using a jar system.  Start out by purchasing or cleaning out 3 jars.  These 3 jars should be labeled “Giving,”  “Saving,” and “Spending.”  In order to introduce your child to the jar system we suggest scheduling a craft time on the next day your child’s allowance is due.  Help your child to decorate the 3 jars with paint, embellishments, ribbons, etc.  Just make sure that each jar contains one of the labels listed above.  Once the jars are decorated (and dry) then it is time for you to teach your child how to fill them. 

Make sure that you give your child their allowance in small bills (ideally 1 dollar bills) in order to make this process easy to understand.  You should decide the percentage of allowance money that your child will put into each jar before beginning the teaching session with your child.  Let’s assume that you give your child an allowance of $10 per week.  Here are our suggestions on how to help your child allocate their funds:

The Giving Jar - $2 (or 20% of your child’s allowance).  By saving 20% of their allowance money your child can learn to give a 10% tithe to your local church and 10% to either charitable opportunities within your church or another charitable organization.  It is very important to teach our children the value of sharing our earnings with others.  (FYI, if you do not know which charitable organization you would like your child to give to we suggest www.ambassadorstothenations.com.  They have giving programs available so that your child can help send funds to another little boy or girl in need.)

The Saving Jar - $3 (or 30% of your child’s allowance).  The most important rule of the savings jar is to remember to teach your child that these funds cannot be spent.  You should determine what your child is saving towards.  This is something that you can do together with your child or you may decide ahead of time what the savings goal will be (i.e., college fund, car fund, etc.).  These funds should not be accessed for any reason other than the goal that you and your child have determined together. 

The Spending Jar - $5 (or 50% of your child’s allowance).  Ok, this is the fun jar.  This is the jar that your child will love the most.  However, it is still crucial that your child learn to spend these funds responsibly as well.  It is probably not a good idea to simply give your child these funds to spend whenever the urge hits them.  Instead, you might want to plan a shopping day once a week to take your child to the toy store or candy store so that they can have a little fun.  Remember, your little one needs a reward for all the discipline they are learning with the “Giving Jar” and the “Savings Jar.” 

Please visit us again tomorrow as we continue to explore effective ways for parents to teach their kids about money.  If you have found this blog to be helpful, please feel free to forward the link to your friends.   

At HOPE we will help you achieve the credit score you desire so you can qualify for the lowest interest rates available to you. If you would like to know how please call us at 704-499-9696. We are waiting on your call.