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The Value of the “One-Quarter.”
By Steve Smith
Part 1 of 3
Over a 29-year career in both conventional and
financial education, one thing that has become
increasingly apparent to me is how lightly many
consumers take to paying an extra quarter – that is
paying an additional half or three-quarters of a point
when financing their homes, purchasing autos,
securing loans, and obtaining credit cards. This
nonchalant approach (that’s totally to a lending
institution’s advantage) has been very detrimental to
the overall financial health of many families.
There are a wide array of predators looking to exploit
uneducated consumers which place them in
undesirable situations. In every lower-income area in
the Metro- Atlanta area where I reside, corners are
flooded with pawn shops, payday loan stores, and title
pawn outlets.
One particular acquaintance of mine took out a title
loan of $5,000.00 on a vehicle she purchased four
months earlier after an insurance settlement. While
waiting for a subsequent annuity to cover the principle,
she paid $995.00 per month to keep the loan current.
She was paying more than 200% interest on that debt.
She ended up paying $3700.00 in interest and
penalties in less than four months. AND IT WAS
LEGALLY STIPULATED IN THE CONTRACT.
It’s no coincidence that when I venture into the middle
of upper-class neighborhoods, I rarely see these
businesses. Are lower-income areas targeted? I’ll let
you draw your conclusion. I know for sure that the
need for financial education at a young age is so
important. The MVET Way Newsletter, as well as
CEMN personal and business coaching, have become
a great resource for that education.
Part 2 will discuss decisions to consider in regards to
credit cards and mortgages
A Personal Story
By Professor Harlin, MA
Part 1 of 3
Today, I saw an old client. This person had come to pick
up the remnants of his belongings that had been left
behind during his swift transition because of a lack of
funding. The remnants where his personal belongings,
enough to fill up the back of a pickup truck, easily. The old
client showed up with a rolling green trashcan. The one
your gardener would use to put cut grass and shrubs. The
trash can was dirty, filthy dirty. The old client was packing
his belongings into this empty dirty trashcan, and it just
saddened me as I watch this old client put about a fourth
of his belongings into the trashcan and then roll it down
the street to the new place of residency. I thought of this
client's predicament.
I reflected back to an earlier time when the relationship
was much, much more. I remembered having
encouraged this old client to get a driver's license
amongst the many other attempts to help him move
forward. I knew this client had a wife and young child and
now another one on the way.
My sadness continued to grow throughout the day. Then
I realized the numerous steps that we, at the community
center, had encouraged along the eight-month journey
that led to this moment. I had to surrender to the truth that
you can give all you have to give; and still, people will
choose not to change. Now, it still makes me wonder and
ask, “What must have happened in this person's
childhood that left him lacking to this degree?”
I still have hope for this old client. It won’t be with me. It
may not even be with the old client. It may be with the old
client’s children. What I believe is there will always be
hope. There is one thing that is for certain and stands out
in my mind, the truth that there is definitely a lacking of
financial education in many of our communities. With
these thoughts in mind, I would like to share with you the
importance of financial literacy and education as a part of
any community improvement effort.