Month: September 2015

Teaching Your Children About Money and Credit


It’s never too early to learn about money. During a child’s pre-college education, he or she learns a number of skills that may help him or her in a future career, but little focus is given to teaching kids how to manage money. Learning how to manage money and how credit works is an invaluable benefit to a child growing up in 2015.

Here are five tips on how you can help your children learn how to manage their finances starting today:

1. Pay kids for chores or give them an allowance

It’s difficult for kids to learn how to manage money if they don’t have money. Even young children can benefit from receiving small sums of money that give them the chance to make financial decisions. Rather than handing them money each week or after a chore, consider keeping a running balance sheet that allows the child to see how much money they have earned, and how much they have in savings. Allow them to “withdraw” money as needed from you. Visualizing debits and credits and a running balance will help kids see where their money is going.

2. Take time to explain to your kids how your credit card works

How many times have your kids seen you pull a plastic rectangle from your purse or wallet, pass it through another plastic device, and suddenly you’ve paid? It’s important that kids understand what’s happening behind the scenes when you pay with a credit card. Use a trip to a restaurant as a teaching opportunity. Explain about the bank lending you money, you borrowing money, and what happens if you don’t pay it off on time. Americans carry a lot of consumer debt, and understanding credit early on could prevent unnecessary heartache later.

3. Set up a savings account with a local bank for your kids

Money sitting in a piggy bank may teach kids the value of saving, but it misses an important teaching point–interest. By setting up a savings account for your older kids, you give them a chance to see the monthly effects of saving. When kids see their bank statements, they get to see the impact of lending their money to others. Saving doesn’t just protect your money for the future — it earns you more money.

4. Review your kids’ finances with them

Once your kids get older and have accounts of their own, take time to review their accounts with them. Help them learn how to analyze trends in their savings, and to compare how much they save to how much they spend. Not only will your kids learn how to analyze their own financial decisions, they’ll learn that analyzing their financial situation is important. Too many people wait to question their money habits until problems have already happened. Teach your kids to plan now.

5. Allow your kids opportunities to seeyour good financial habits

Many kids learn best by seeing others first. There’s no better way than to learn by example than from your own parents. Tell your kids about paying off your credit card each month. Talk about what kinds of purchases are worth taking on debt. Discuss what percentage of your earnings you try to set aside each month. Let your kids see times where you decide to not make a purchase because it’s too expensive. The more your kids see, the more they’ll learn.

Daniel Woolston is an associate attorney for Lexington Law Firm. Hewas born in Houston, Texas and raised in Sugarland, Texas. He received his B.S. in Political Science at Brigham Young University and his Juris Doctorate at Arizona State University.

A former prosecutor, Daniel has conducted numerous jury trials and hundreds of other court hearings. He has experience in legal writing, research, and general oral and written advocacy. Daniel especially enjoys being a voice for those that are often forgotten in the legal system. He is licensed to practice in Arizona. He is located in the Phoenix, Arizona office.

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Are Accounts Missing From Your Credit Report?


Credit health is a combination of good habits, credit bureau math, and complete information, but what happens when accounts are missing from your credit report? Below are a few examples of items you won’t find on your TransUnion, Experian and Equifax reports:

  • Utility providers. Water, sewage, gas, electricity and trash removal are essential, but the average provider does not report to the credit bureaus.
  • Cell phone companies. 96 percent of the world population has a cell phone, and yet, few accounts are reported on the millions of consumer credit reports.
  • Landlords. Small landlord companies rarely report business transactions to the credit bureaus.

  • Some retail store cards and layaway plans. Depending on the lender, a department store card or layaway plan may not appear on your credit report.
  • Medical bills. Medical bills are considered outstanding debt, but they do not appear on your credit report like a revolving or installment account.

So, what should you do if an account is missing from your credit report? Begin by contacting your lenders. Ask them about their credit reporting policies. If they are willing, ask them to report your positive information to the Big Three. Companies that value customer service are likely to honor your request.

Simple enough, right? Not quite. Although these accounts aren’t likely to appear on your credit reports without a personal request, a delinquency is another story. Non-reporters are quick to change their tune if your account is past due or goes into collections. The result is serious credit damage. The bottom line: Allow non-reported accounts to work in your favor. Practice responsibility by pursuing clean credit and complete information.

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How Medical Bills Affect Your Credit


“An apple a day keeps the doctor away,” but sometimes an apple won’t suffice. When it comes time to see the doctor, medical bills usually follow. Unpaid medical bills could land on your credit report as collections and may negatively impact your credit score.

About half (52 percent)
of collections items that appear on consumer credit reports arise from medical debts. That means about 43 million Americans have medical debt on their credit reports, and about a third of those people have good credit aside from the medical debt. The problem with medical debt is that it is often a poor indicator of a consumer’s creditworthiness. An individual with responsible credit habits and an otherwise pristine credit history could encounter an unexpected medical event that drowns them in bills and damages their credit.

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Public vs. Private College ROI

Public vs Private Header

As the school year ushers in a new class of high school seniors, college questions abound. For many students and their families, cost concerns are centrally important. Is going to a private college worth the extra expense over a public university? Will you earn more over your lifetime with a private school degree – enough to offset the additional costs?

These questions are more relevant than ever as college graduates across the nation now struggle with massive student loan debt. In this project, we hoped to shed some light on the cost calculus, taking a purely financial view of the value of a degree from the nation’s top public and private schools. If you’re looking for an educational investment that will pay dividends in cold, hard cash, our results are worth a look.  


We studied data from the top 20 public and private universities, based on the most recent U.S. News and World Report ranking of national universities. Average starting and mid-career salaries were also based on data from that list. Since viable research for end-of-career salary estimates was unavailable, we applied an estimated 1% salary increase each year, from age 44 to 65.

We collected total student debt from the National Center for Education Statistics from the 2013–2014 school year for our list of universities as well. This includes the costs of in-state tuition, books, room and board, and miscellaneous fees. We subtracted cost of living expenses from accumulated earnings, starting at $25,677 per year and increasing by 1% annually.

Some Conclusions

Here’s the short answer: Over a lifetime, you will earn about 10% more income if you go to a private college. That’s enough to retire about three years earlier. The long answer is that a private college may only be feasible for those who can overcome the initial roadblocks. Average tuition this year at a private, nonprofit, four-year college is $31,231 – exponentially higher than $1,832 in 1971–1972 (in current dollars). On the other hand, average tuition this year at a public, four-year college is $9,139, which – while still much higher than $428 in 1971–1972 – is substantially lower than private college tuition.

A private college education also adds at least four extra years to your debt versus a public college, and paying off student loans for years without the ability to save can hurt retirement funds. A lower sticker price and less initial debt may sway prospective students to choose public universities.

Those in their early 20s and facing major life decisions may especially find public universities attractive. The cost of an average wedding, for example, has risen to over $30,000, and the average cost of raising a child to the age of 18 has risen to $245,000 (excluding higher education costs); student debt can make these choices financially difficult. Another plus for public colleges is their return on investment (ROI) is twice what it is for private colleges, which means you can still achieve significant lifetime earnings with a public university education.

Accumulated Earnings Over Time

There are many factors that contribute to which college is best for you: Different colleges specialize in different fields and programs, and they also carry varying levels of prestige in the job market.

For example, many private colleges specialize in the liberal arts and offer four-year programs that lead to a bachelor’s degree. Public universities, on the other hand, are often larger and have a wider variety of majors and degree options. Both prepare you for various careers or graduate study, but one might be a better fit than the other.

Some colleges are considered more prestigious than others, but private colleges aren’t always more so than public universities. We looked at lifetime earnings estimates for the top 20 public and private colleges in America as well as their ROI and found that in some cases, a top-tier public university will net you more than a private college further down the list.

Rankings Private vs Public Universities

Here is another graph focusing on the ROI difference between those same public and private universities. One might assume that because private colleges lead to a higher annual income, they would have a higher ROI than public colleges. The results, however, clearly point to public universities as having the highest ROI. This is because the initial “investment” of tuition, room and board, books, and other fees is higher at private universities.

On the other hand, there are some aspects of a college education that the ROI calculation cannot measure, such as the college’s prestige, the quality of a professor’s instruction, the student’s choice of major, and the school’s alumni network, which tends to thrive at top-tier private colleges. All of these factors play a part in the ROI you get from your college education.

Ranking Universities ROI

A good professor can mean the difference between a student acing a subject and feeling utterly lost. However, it’s challenging to measure a professor’s quality of teaching. Most universities use student evaluations to track professor performance, but response rates and sampling biases make the averaging of results unreliable.

Still, there’s one simple metric that sheds light: the ratio of a university’s professors to students. The main benefit of this perspective? Smaller classes typically equal more attention from professors, and when professors get to know their students personally, they are able to educate them more effectively. Our findings show private universities have a slight edge on public universities in this area.

Rankings Private vs Public Students per Professor

The major you choose has a big influence on your future salary. Certain majors often lead to either high or low-paying job fields, and your choice also greatly affects the specific job you land and how quickly you can work your way up the corporate ladder.

The general assumption is that science, technology, engineering, and math (STEM) majors guarantee students higher future salaries than majors in the humanities, which is often true, but a study from Georgetown University revealed that it’s not always the case: The top 25% of humanities and liberal arts majors, for instance, earn more than the bottom 25% of engineering majors. This implies that it’s not always about what major you choose but how effectively you take advantage of that major in your future.

Know your options, make an informed decision, and follow your passions when deciding on your major. Salary is important, but it’s not the complete picture for your future happiness. Many studies have found a correlation between money and happiness but not causation. It may be more that money helps avoid unhappiness, yet in the end you have control over how you spend your money.

Salaries by Major


If you have the financial means and previous academic success to impress the admissions committee at a top-tier private college, you will likely make the most money going there over your lifetime. However, for many students the public route is a viable alternative. The main difference comes down to financial stability in your 20s. Increased levels of student debt may force major life purchases to occur later on in life.


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Child Identity Theft: How Can Parents Protect Their Kids’ Identity?



I have five children. Each at a different stage in their lives. As a parent, I have done what I can to protect my children from dangers that lurk in the world in which we live. As part of raising my children, I have taught my children to be careful in the decisions that they make and with whom they choose to associate.

As I reflected on the precautions I have taken to protect my children, I realized that I, like so many others, have not thought that my children could be the victims of identity theft. As victims of identity theft, my children may lose opportunities for needed credit when they reach adulthood. These opportunities that could be missed include auto loans, home loans, insurance and even employment. With this in mind, it is so important you and I take steps to protect our children and their good names from the identity thieves who are all too willing to compromise our children’s financial futures for their own criminal motives.

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