If you are a person with disabilities, or know a person with disabilities, who is dependent on supplemental assistance, saving money just became a whole lot easier.

Traditionally, a person receiving supplemental assistance has been forced to maintain substandard living conditions in order to remain eligible for assistance. However, over the past few years there has been a push to offer greater opportunities for disabled individuals, in particular, to achieve more financial independence. This effort made great strides when the Stephen Beck, Jr. Achieving a Better Life Experience (ABLE) Act was passed into federal law.

The ABLE Act allows persons with disabilities to maintain a savings account and not be penalized through the loss of eligibility for supplemental assistance. These savings accounts are known as ABLE Accounts.

There are five key guidelines for using ABLE Accounts. First, the disability must have had an onset by age 26. That doesn’t mean the ABLE Account must be opened by age 26. A person of any age may open an ABLE Account, but the disability must have had its onset before age 26.

Second, a maximum of $14,000 may be deposited into an ABLE Account annually. This amount may be adjusted for inflation in the future. There is no restriction on who may contribute funds. The disabled person may contribute his or her own funds and family members and friends may contribute into the ABLE Account. For individuals seeking to make gifts but have not for fear of jeopardizing a disabled person’s eligibility for supplemental assistance, an ABLE Account may be a good fit.

Third, a maximum of $100,000 may be saved into an ABLE Account, at which time Social Security Income (SSI) can be lost. It is noteworthy, however, that no other supplemental assistance program will be affected. Once the balance is under $100,000, SSI can resume.

Fourth, funds in the account are to be applied toward qualified disability expenses. This term is rather broad, however, because it is includes housing, medical, transportation, education, job skills, and other expenses which improve quality of life.

Finally, upon the death of the disabled individual, the balance is subject to claims by the state Medicaid administrator. This is true of all individuals receiving Medicaid. When a person receiving Medicaid passes away with assets of any value, a claim can be made in his or her estate to recover funds expended on his or her behalf. ABLE Accounts are not exempt from Medicaid recovery.

The ABLE Account can be a great addition to two other popular programs geared toward assisting people, especially disabled individuals, gain financial independence. Individual Development Accounts are operated by private non-profits and partially funded by the federal government for the purpose of allowing individuals to save without jeopardizing eligibility for supplemental assistance. Savings may be applied toward purchasing a home, starting a small business, or going back to school. The other program, Plan to Achieve Self-Support, is operated by the Social Security Administration to assist disabled individuals secure income from self-employment without jeopardizing eligibility for supplemental assistance.

For those individuals who find success through the Individual Development Account or Plan to Achieve Self-Support, or for those individuals who are already earning an income, the ABLE Account offers a tremendous opportunity to increase financial independence.

Because they can be funded by family members and friends, ABLE Accounts may also play a role in estate and financial planning.
People go through difficult situations all the time. It is a fact of life. When life gets really tough, it can be easy to scream back that God, life or something somewhere is trying to crush us.

Recorded in the Bible are many examples of people enduring difficult situations. If we took out all the accounts in Scripture that dealt with hardship and difficulty, we would essentially have to throw the entire Bible away. If we instead took enough time to digest those accounts, what we would see is that God is at work through each circumstance to accomplish a specific purpose.

Hardship and difficulty are opportunities for growth. They are also times when God wants to accomplish a specific purpose in our lives to benefit us or to work through our lives to benefit others. So, what is our best response? Job 2:9-10 provides us with a starting point, “Then his wife said to him, ‘Do you still hold fast your integrity? Curse God and die!’ But he said to her, ‘You speak as one of the foolish women speaks. Shall we indeed accept good from God and not accept adversity?’ In all this Job did not sin with his lips.”

Although Job could not see what was happening, you and I are given the explanation behind Job’s difficulty. God was allowing hardship to prove Job’s faithfulness – not that God needed to know, but that Job’s faith would grow stronger. At the end of the book of Job, he draws far closer to God than before the first calamity came upon him. There can be no greater outcome of our difficulty than to either grow stronger in our relationship with God or to bring others into a stronger relationship with God.

Job could have easily cursed God. His wife and friends assured Job cursing God would result in a quick death, or a quick escape from hardship. It is this quick escape that we so often desire. Unfortunately, growing stronger in our relationship with God is not something that usually happens quickly.

David in 1 Samuel also had several opportunities at a quick escape from difficulty. After bringing down Goliath, king Saul became jealous of David and wanted to do away with him. What unfolds over many chapters is Saul’s pursuit of David all across the country. However, David twice had an opportunity to put an end to the madness. His first quick escape came while he was hiding in a cave, and Saul entered the same cave for a brief rest. David could easily have taken Saul, and he was tempted to do just that.

Sometime later, David and a close adviser snuck into Saul’s camp at night, and to prove a point, took some of Saul’s possessions while he and the night guards slept. Laying right next to Saul were his weapons, and once again, David could easily have taken Saul, making a quick end to his difficulty.

In all of these instances, however, Job and David both recognized a greater reality beyond quickly ending their difficult situations. There is no future in cursing God or tearing down what God has raised up. For Job, cursing God would have been the end of his integrity and the end of all the good God had brought him to that point. Can we really say a quick escape is worth such a price?

David knew that God had appointed Saul as king, and to cut Saul down was to undermine God. David specifically said he would not attack God’s anointed person, though that person was causing him great difficulty. David acknowledged that if God wanted this to stop God could easily put an end to Saul. That God chose not to do that was part of a decision far weightier than David could reason out.

Throughout David’s difficulty, he came to experience God very closely. David intently listened to God and brought God into every decision. David came to know God so well that he saw how powerful, merciful and just God is. All of these things would come to play a major role in David’s later term as king. In the same way, Job’s friends were convinced of God, and Job himself proved God far beyond how he had experienced God to that point.

When I talk to people about Zacchaeus Financial Counseling, one of their first questions is, “How do you get paid?” There is no question that starting and operating an independent non-profit is not a lucrative deal. In the face of our difficult week last week, it is tempting to abandon the effort, and that would certainly be an easy solution. There are definitely other positions I could take that would be far more profitable.

However, like David and Job, Zacchaeus Financial Counseling is a response to God’s call, and to walk that path, I must take the good with the adversity. For all I know, God wants to accomplish something greater as a result of our difficult week.

Quickly escaping difficult circumstances by doing something like swiping a credit card would be like Job cursing God (and dying) or David taking Saul (and overruling God’s authority). The question you have to answer before swiping the credit card is this, “How can I pay this off?” So you swipe the credit card, then what? Job curses God, and then what? David takes Saul, and then what?

If you don’t have a good answer, then your best decision is to take a little bit more time to consider the plan, the potential long-term consequences, and your options. In all of this, it is vitally important that you bring God into the decision. What does He have to say? What is He doing? What would He like to accomplish? If you took out the credit card, what would it do to His plan?

A really difficult week is an opportunity to experience God in a new way or benefit others. Decisions that have this level of impact cannot be resolved with a quick swipe of the credit card, but if we do swipe the card, our quick escape will bring a quick end to God’s purposes and plan for our lives. Only you can decide if the cost is reasonable.
Have you ever had one of those weeks? A week when you wish you could play a country song backward, and get your dog back, your truck back, your house back and your wife back. Or maybe you wish you could hit the rewind button on the week.

This past week was one of those for me. It started with a routine repair on our van – the vehicle on which my wife and our entire family rely very heavily. My idea was to do the work myself and save money on the repair by avoiding a mechanic. I had done the same maintenance before and had all the tools I needed. After a day and a half of trying to complete the repair, the van just would not run right. I ended up having the van towed to a mechanic and renting a car for the week.

At the same time, we were working on a project to lay new tile and install a new toilet in the bathroom used by the children. In the process of this job, I broke the flange on which the toilet sits, something which was completely avoidable had I done things a little differently.

A couple nights later, I was moving some things around on the desk with the family’s computer. The sides of the computer were open, and either lightning produced a surge or something on the desk touched the right components on the mother board. There was a flash and pop, followed by silence as the computer shut off.

The straw that broke the camel’s back for the week was when the shoe lace broke while tying my shoes. I can handle a $3.49 pair of shoe laces, but the fact that the lace broke was just piling on more trouble in an already difficult week.

The tow to the mechanic, mechanic’s bill, rental car bill, flange repair and new computer add up to real money – money that for us, like many people, isn’t just laying around waiting to be spent.

When it became apparent that the van repair was not going well, I did a lot of praying. Although it was disappointing that the Lord did not guide my efforts to get the van running correctly, there was a point when I had a very clear sense that He was present with me. Wait, right there, you probably expected me to say I felt hopeless and dejected, like God failed me.

But that’s not what happened. In that moment, the reminder of His presence was more comforting than anything else which could have been offered.

At the very end of an already difficult week, I received the results of the annual oil analysis on our van. The report showed that antifreeze is leaking into the oil. Depending on the problem, this could signal a very expensive repair.

That the Lord knows what is happening and is present throughout the entire situation brings a sense of peace, calm and order to a week that is otherwise spiraling out of control.

Working through Zacchaeus Financial Counseling, I can see that credit cards have become the safety net of choice for many people, including those who identify as Christians. If the Lord is present with us in our circumstances, then why do you need a credit card? Do you not believe He will actually be there for you when there is a problem? Do you not believe His timing is good? Do you not believe His providence will be enough?

In our country’s quest to achieve a culture based on consumption and consumerism, the credit card has become common place to the point that we are desensitized to it. We don’t want to wait for anything or let anything get in the way of making the purchase. When swiping the credit card, our minds have become conditioned to accept it as an easy and socially acceptable way to pay, even perhaps the socially expected way to pay. If you’re not using some type of credit to buy anything and everything, you must be behind the times – this is the message of society.

However, if I used the credit card to solve the problems of my week, where would God fit in my circumstances?

He wouldn’t. And He doesn’t fit into our circumstances when we whip out the credit card, because we don’t allow Him.

Toward the end of the week, I came across this verse at Psalm 142:3a, When my spirit was overwhelmed within me, Thou didst know my path. NASB

This verse on the one hand expressed very well how my week was going – overwhelming! On the other hand, it expresses very well the Lord’s role in how my week was going – He knows where we are and what we are facing. He is present in our circumstances!

Having that knowledge, what is our proper response? What do we do with the Lord? How can we acknowledge how closely the Lord is with us on a daily basis?

David had a really bad week which turned into multiple years of difficulty as recorded in 1 Samuel 18-31. We’ll talk more about that next time and how it applies to our difficult weeks.
One of the key roles of the Federal Reserve is to control monetary policy. What exactly this means and how it is done can all seem rather mysterious and beyond comprehension. However, a powerful tool in their bag of tricks is control of interest rates.

Whether we realize it or not, interest rates largely control our decisions to save, spend and invest. When interest rates are high, we tend not to borrow because it is costly. Saving is enticing, however, because we can earn comparatively more on money we leave in the bank. When interest rates are low, borrowing (and spending) is encouraged because it is comparatively inexpensive, and saving is perceived to be more costly given the lack of income from money left in the bank.

However, making money decisions based on Federal Reserve policies can impose more significant consequences than we are led to believe.

Leading up to the 2008 stock market crash, interest rates were falling, and investors were led to buy stock instead of accumulating money in the bank. Holding cash was perceived to be costly, and many investors put all their cash in the stock market. Behind the scenes, the Federal Reserve’s monetary policies were aimed at controlling the stock market for the benefit of a few wealthy investors rather than controlling monetary policy for the whole nation. The resulting stock market crash enabled one of the largest transfers of wealth our nation has ever known.

Rather than hold their positions, the average investor believed it was better to sell – when the market was going down or at the bottom. These sales completed the transfer of wealth. Few investors had cash to capitalize on the struggling market, and the fate of their investment portfolios and retirement accounts was sealed.

Although we’re told cash does not serve any useful purpose in an investment portfolio, this message is rather self-serving in favor of wealthy bankers and stock brokers.

The investors who did well during the market crash had plenty of cash in their portfolios, did not sell all of their positions, and used cash reserves to take advantage of discount prices, riding the wave back up.

Saving serves many useful purposes for the average person, even though it does not currently offer sexy returns. Cash ensures you have the resources to survive fluctuations in your income and address crises and emergencies that arise in your home. Cash enables you to take advantage of opportunities you would otherwise pass up without cash on hand. Cash insulates a portion of an investment portfolio from wild swings in the value of investments.

Urges to borrow and spend should be ignored, especially while interest rates remain enticingly low. When cash is scarce, values of assets rise because available cash is chasing a limited number of assets – think the housing market, again! To borrow during such a time puts you at risk for being underwater when values predictably fall. Then when the loan is foreclosed, whatever cash you invested is lost. This will particularly come true when the Federal Reserve raise interest rates, signaling investors to hold cash. An increase in spending also puts your financial plan on thin ice. Less cash means you have fewer resources to address emergencies.

When you are not insulated against market swings and personal emergencies, you become more at risk for financial disaster. Those in poverty and earning low incomes are more sharply affected during these times because they have fewer resources to address household needs, and losing even a small amount of money on investments and financed purchases can be financially devastating.

While Federal Reserve policies once favored a strong national economy, their more recent policies favor transferring wealth away from the common citizen. Buyer beware!
How you answer that question depends on which you perceive to be more important. So, have you decided?

In the last post, we considered the case of my son’s being bullied in school and how understanding manipulation techniques of the bullies gives us a starting point to deal with the likes of Edward Bernays, the father of modern consumerism, and his public relations manipulation techniques.

Every household has a set of priorities that demand attention before anything else – shelter, food, clothing, health care, transportation and utilities. Ever since you were a child, you have had some goals in mind for your life – career, education, climb Mount Everest and other accomplishments that give your life meaning and significance. And if you are human, there are a list of things you would like to have which are neither priorities nor goals – beach house, sports car, latest iPad, etc.

It took reorienting my son’s definition of himself to overcome the bullying, and that is our starting point here as well. The definition we have of ourselves controls how we handle manipulative marketing. Two key things help us define ourselves – the way we respond to what happens in life and what we accomplish in life.

First, we need a set of principles and behaviors that will guide how we respond. When _________ happens, I will do ___________. It was not enough for my son to have a definition of himself. He needed a way to respond. When I am bullied, I will turn around and walk away. The definition you hold about yourself will inform your response to situations, and you can respond to situations when you have a firm definition of yourself.

Second, we have an inner need to accomplish something or to feel significant, and we complete achievements by intentional behavior. That’s a fancy way of saying we need goals to help us get things done in life. Not just any goals, our goals must be interesting, achievable and measurable. Goals are what help us get out of bed in the morning and get through difficult times.

So, when society asks the question, “Are you going to be fashionable or are you poor,” you can confidently say, “I am pursuing a worthwhile goal that defines who I am, the thing you want me to buy does not fit into my goals, and achieving my goals will ultimately bring me more satisfaction.”

In other words, we don’t need to fit into society’s definition of a fashionable family to have satisfaction and meaning in life.

However, following these principles involves a system of trade-offs, otherwise known as opportunity cost. When standing in the check-out line, you consider how the candy bar might taste, but then you realize that buying a candy bar every time you visit the grocery store is going to slow down progress on your goal. You have to decide which is more important, and here are some tips that will help.

1. Reduce your exposure to media. Media includes television, smart phones, tablets, news, social media, radio, and internet. Marketing depends specifically on these channels to disseminate their campaigns. The less we are exposed to media, the less we can be manipulated into buying something we don’t need to solve a problem we don’t have. Facebook, as an example, openly admits your news feed is manipulated for the purpose of making a profit and influencing your thinking on current issues. Folks, they wouldn’t do this if it didn’t work, but the trouble is we don’t really detect what is happening in the moment.

Media is addicting and very time consuming. Stepping away from media requires an intentional decision to either limit time on media or carve out specific times each day when media is turned off. From time to time, I will go on a Facebook fast, and, while the task can be hard, the results are amazingly beneficial. I also use Facebook feed apps that greatly reduce the amount of time I need to spend online to keep up with my friends and causes that matter to me.

We have little respect for the amount of media and advertising our minds receive each day and the effect they have on us. Researchers at California State University report that by the time the average child finishes elementary school, he or she is exposed to 8,000 murders on television. By age 18, that number jumps to 200,000. Each year the average child is exposed to 20,000 television commercials. By the time a person is age 65, the total number of commercials they will have seen is 2 million. Nearly all survey participants acknowledge that television commercials make their children materialistic.

This is just television. Imagine how these numbers grow exponentially when you add in newspapers, e-mail, internet, smart phones, tablets, etc. We cannot simply take in all this information and expect it to have no effect or that we can easily counteract it.

Intentionally limiting your intake of media will have positive, healthy effects on your mind, body, relationships and personal finances.

2. Reduce your exposure to shopping, coupon and deal sites. If you are tempted to shop, browsing deals is not going to help. Couponing can be a big help for the family with a tight budget, but it can also create big problems by tempting you to buy. Remember, you save more by not spending than by spending with a coupon.

3. Live by a financial plan. The financial plans I create begin with the client’s needs, goals and desires. The person you want to become and the things you want to experience should be the number one driver of how you spend your time and money. Where we spend our money and time dictates who we will become. A well developed financial plan gives purpose to how we allocate our money and informs how we allocate our time. Time is an important factor here because we use time to spend and earn money.

4. Implement budget controls. Yes, you should have a budget. Whether a budget is important is not the question most people ask. The more pressing question is how to live by a budget. The only answer is to use budget controls. Some examples include an emergency fund, cash envelope system and a healthy reward system for good money behavior and reaching goals.

Public relations, Edward Bernays, marketing campaigns and all media content actively use psychology to manipulate your behavior to spend money or sway your opinion on cultural issues. It takes just as much psychology to respond – the psychology of money, self-control, and achieving goals.

In the last post, we opened a discussion on the exacerbation among low-income households and those in poverty of debt levels as a result of public relations manipulation techniques developed by Edward Bernays, the father of modern consumerism. Specifically, it was posited that Bernays’ manipulation techniques which created a desire to own things or to follow certain issues were blind to an individual’s ability to afford those things. As a result, there are equal levels of desire to spend among a heterogeneous population, some of whom have far fewer resources than others.

Let’s consider further what Bernays wrote, “Mass production is only profitable if its rhythm can be maintained – that is, if it can continue to sell its product in steady or increasing quantity... [T]oday, supply must actively seek to create its corresponding demand. A single factory, potentially capable of supplying a whole continent with its particular product, cannot afford to wait until the public asks for its product... As big business becomes bigger the need for expert manipulation of its innumerable contacts with the public will become greater.” (Propaganda, Horace Liveright, 1928)

Queue instant replay. Earlier, Bernays wrote, “Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society.”

We should stop here and ask exactly what it means for human beings to cooperate and live together in a smoothly functioning society? In Bernays’ mind, “smoothly functioning” meant exploiting the people who trusted that business and government would not do anything to harm them or put our nation in jeopardy. Bernays believed our democratic society could only function if there was a massive transfer of wealth by which the working class willingly handed over their wallets to major corporations without holding anyone accountable.

It equates to a warped reality that is imposed on the population at large.

So, do we stand a chance at combating this manipulation? I turn to an unlikely place for the solution.

When my son was in kindergarten, he was bullied by a group of classmates. His classmates would bait him into a devious act, like unrolling the toilet paper, by asking him a question, “Are you going to unroll the toilet paper or are you stupid?” My son knew he was not stupid, so to prove it he unrolled the toilet paper. Of course, he got in trouble for it because his class mates tattled on him, and that’s when my phone would ring.

Like Bernays and those who actively engage in manipulative and deceptive marketing practices, the classmates who bullied my son lived in a warped reality where exploiting my son was their idea of a smoothly functioning school environment.

To make matters worse, no one in school administration was informing me about what actually happened. As a result, my son was labeled a trouble maker, which was completely against his nature. Once I finally uncovered the bullying, the first task was giving my son the skills he needed to respond. More importantly, he had to believe that these new tools would actually work. Although it was a long time ago, I can still recall his reaction when I said, “Next time that happens, turn around and walk away.” My son thought it was crazy because he saw walking away as admitting to them that he was stupid.

However, after some explanation, he came to understand that by responding to the classmates he was surrendering power to them. Walking away left these classmates hanging in their own mischief. He was affirming the true reality that he did not need their approval to be a healthy boy. By acting from a position of strength, he had power over the situation and developed great courage. The approach absolutely worked to reduce the bullying.

Big businesses want you to believe that you need the products they manufacture and sell to be happy, well-rounded and fashionable. That is only a reality they fabricate. It says nothing about the reality in which you actually live.

It turned out that the school administration was complicit in the bullying, and we ultimately had to remove my son from the school. I share this story because of the resemblance it bears to where many people are in our economic and political system today. Many people are being baited into buying things they don’t need to solve problems they don’t have and willingly do so to conform to society’s ideals. The majority of the big businesses regularly use deception in their campaigns, making it nearly impossible to decipher between legitimate business practices and manipulation. While all this goes on, regulators are often complicit in the deception and manipulation rather than protect people.

Imagine this question playing out in low-income homes and most definitely in middle-income homes across the country. “Are you going to buy this fashionable product or are you poor?”

Of course, people do not want to feel or look poor, so to be fashionable and accepted they will try everything to make the purchase. Because they do not have the means to make the purchase, it goes on a credit card. People wind up silently carrying a load of debt and pay a high emotional price in the process, but on the outside they measure up to a standard they think is worth following. Or their homes will be dilapidated while there is a new car in the driveway or furniture that does not fit the decor.

I know this happens because I counsel clients in this position. In the marketing war for control over our mind, these people have lost a sense of their own identity and their own needs and unwittingly surrendered control over to big business.

The only way to combat the manipulation and deception in marketing practices is to start with a healthy sense of your own financial situation and your own personal needs, goals and desires.

Next time we will look at some specific ways to put this into practice.
Edward Bernays, the father of modern consumerism, the designer of “public relations” as we know it today and the creator of modern marketing campaigns, wrote, “The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. We are governed, our minds are molded, our tastes are formed, our ideas suggested largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society.” (Propaganda, Horace Liveright, 1928)

When Woodrow Wilson was elected as President in 1916, he was chosen as the “peace candidate.” Our nation was at peace, and its people desired peace. Wilson campaigned on the mantra that our nation would remain at peace. After the election, Wilson’s mind was changed, and what followed was a systematic effort to change public opinion about going to war. Once public consent was given, the nation entered the war.

How did this happen? Public opinion was swayed from cries for peace to cries for war by following the road map developed by Bernays. Bernays ultimately orchestrated corporate marketing campaigns to sell Lucky Strike cigarettes, Ivory soap, Dixie cups, and other household name products. “Under the old salesmanship the manufacturer said to the prospective purchaser, ‘Please buy a piano.’ The new salesmanship has reversed the process and caused the prospective purchaser to say to the manufacturer, ‘Please sell me a piano.’”

Before Bernays, customers made their own buying choices. After Bernays, choices were made for the customer, leaving the customer to salivate after certain products and issues. The obvious inference Bernays made in developing this grand scheme is that people are not intelligent enough to make their own choices and must be manipulated to do what a few people want them to do – those few people conveniently being the wealthiest and most powerful people in the nation.

Using the techniques he developed, corporations and governments caused the American people to want the things they wanted the people to have and to believe. By manipulating public opinion, choices on everything from paper goods and groceries to political causes and candidates have been systematically made for the American people.

Bernays wasn’t necessarily wrong in his assessment of a democratic society. We as a people of freedom can do great things when we are united. His tactics were also clever, perhaps even ingenious. One of his ideas for Ivory soap was the soap carving contest, which is simply brilliant.

However, Bernays himself understood that manipulation of public opinion could be used for evil purposes. Although he advocated for a standard of ethics to guide public relations, it is clear that public opinion has been manipulated toward products, political issues and national decisions that are not in our best interest. It is also true that deception has intentionally been injected into the process of manipulation.

Cigarettes and Dixie cups are two examples. Cigarettes are known to cause a myriad of health problems, including emphysema and lung cancer, not to mention deforestation of trees to make cigarettes, air pollution, addiction to nicotine, and littering of public streets. It is said of Bernays that he refused to smoke because he believed cigarettes were harmful, yet he happily developed the campaign that manipulate people into choosing to smoke, willfully disregarding the public’s health. This is where the standard of ethics he advocated broke down. Such attitudes overlook the best interests of the public and benefit only the person or corporation making the sale or the government pushing the issue.

While Dixie cups have their uses, the particular approach Bernays used to make people want to buy them was flawed. One of Bernays’ marketing campaigns showed two children sharing a glass cup to wash their mouth out in the bathroom after brushing their teeth. Because the one child was sick, both children were put at risk. Dixie cups solved this problem because they were to be thrown away after each use. Images of the cups being thrown away were included in the campaign. People obviously came to believe that they needed Dixie cups.

I don't know about you, but in my home as a child we never used glass cups in the bathroom. This did not matter to Bernays because by suggesting that a glass cup was in the bathroom he created a new reality. This new reality, of course, ignores the alternative people have used for millennia before – use their hand to collect water for rinsing out their mouth. While Dixie cups were sold to solve a problem that did not exist for the purpose of transferring wealth from the people to the corporation, their use has inevitably added to land fill development and deforestation of trees, both of which are unsustainable practices.

This has led to scores of people being burdened under credit card debt, personal loans, title and payday loans, student loans, car loans and mortgages because their level of want was far higher than their income. This issue is exacerbated among low-income households and those in poverty.

This has led to scores of people being burdened under credit card debt, personal loans, title and payday loans, student loans, car loans and mortgages.

In my next post, we will look at how to combat the public relations manipulation techniques.
There is no one-size-fits-all answer to this question. However, you should consider a number of issues and factors before deciding to consolidate.

First, let's ask why you are interested in consolidating debt? In a consolidation, none of the debt you owe is actually reduced. Consolidating simply moves the balance from one account to another, usually under one payment and interest rate. This may look tempting and might actually ease some of your strain. However, consolidating does not solve the bigger issue.

Let’s start with a few “don’ts.”

  • Don’t pay fees for consolidating your debt. You can do the same thing on your own, and paying a fee just adds to the amount you owe.
  • Don’t consolidate unsecured debt into secured debt. Unsecured debts include student loans, personal loans, and credit cards. Secured debt includes your home mortgage and vehicle loans. A common temptation is to tap your home equity with a line of credit, borrow against your home when refinancing, or using a title loan against your car. Although the interest rate on home loans may be lower, the length of time the mortgage is outstanding has a much larger effect than you may realize. Ultimately, you will pay many thousands more by tapping into your home equity than if you had left your unsecured debt alone. Also, unsecured creditors have no right to foreclose on your home or repossess your car. All they can obtain against you is a judgment. Combining unsecured debt with secured debt means that if you default on the loan you could lose your home to foreclosure or your car to repossession. And when you increase the amount you owe on your house or car, you are also increasing the chances of default. Unsecured debt is simply not worth putting your house or car in jeopardy. One other word of caution if you already tapped your equity to pay off unsecured debt and face foreclosure in the future is that many lenders are reporting any forgiven debt (the difference between what you owe and what the bank collects) to the IRS as taxable income to you. This means you could end up trading unsecured debt for tax debt.
  • Don’t consolidate low interest rate balances with higher interest rate balances. You're better off negotiating interest rates.
  • Don’t get sucked in by high pressure advertisements promising low monthly payments and interest rates. Zero interest rates and low rates are introductory, and when they expire, interest rates soar to 19% or even 29% over night if you are late or miss a payment or can't pay the full balance before the introductory period is over.
Now that we've looked a few don't's, let’s consider whether consolidating is the right choice.

Most people consider consolidating because they want to reduce their total monthly payments, can't keep up with minimum payments, and want to get out of high interest rates. Most people also have a series of balances rather than one large loan. For example, a person with $50,000 of debt usually has some small credit card accounts, a personal loan, student loans, a car loan and at least one large credit card. 

If you consolidate all of these accounts (except the car loan) into one payment, your interest rate and payment will be level (fixed) for 3-5 years or more. Even as you pay down the balance, your monthly payment will not decrease. If you instead developed a plan to tackle your debts one at a time, each balance you pay off directly reduces your monthly payment. This frees up cash in your monthly budget quickly, which you can use to save a small emergency fund or put toward larger balances.

The majority of people who work with Zacchaeus Financial Counseling prefer this approach and are not interested in taking on the long-term commitment of loan consolidation payments.

But what about the interest rate? Most credit card companies are flexible in the interest rate on your account. All you have to do is ask.

Is it possible to reduce any of my payments? It might be if you can demonstrate financial hardship. Credit card companies especially have programs to help borrowers who are experiencing a legitimate hardship. Lenders would much rather modify the terms of your account than spend thousands of dollars in legal fees trying to collect.

Following these steps will help you accomplish at least the same, and probably better, results than a consolidation would have given you. Over time, your monthly payment will reduce even further, and you will have saved a lot of interest. You will also keep total control over the process and have the most flexibility too.

To ensure the success of your plan, start by trimming your budget as much as possible. If you have any extra money, put it on the smallest balance first. Why? Paying off a balance eliminates a monthly payment and frees up money to put somewhere else, and the quickest way to do that is by paying off the smallest balances first. Paying off the smallest balances first also gives you a much needed feeling of accomplishment, something you'll never have with a loan consolidation.
Let’s begin with a caveat. Zacchaeus Financial Counseling, Inc. does not engage in or endorse credit counseling, credit repair, debt relief, debt settlement and similar services. These services are heavily regulated, and for good reason. It has significant potential to damage your credit, often involves payment of debts into a "trust account" of a third-party who then pays your creditors on your behalf, and can land you in a worse position if not done correctly. If you want to ensure your creditors are paid in this type of situation, then you must have assurances that the organization is legitimate and financially sound, especially if they place your money in escrow or trust account. There are times when credit counseling can help to improve your credit, however, other regulation already covers the length of time damaging items may remain on your credit. Therefore, if you embarked on your own, careful journey, you could conceivably arrive at the same or better place as a credit counselor could produce for you. This makes credit counseling something which no one should take lightly and always be very suspicious of potential fraud.

With that out of the way, let’s discuss the topic: What is a debt management plan (DMP)? The long and short of it is a DMP restructures the terms of your debt. The DMP arranges for a payment plan over a specific time period, negotiates interest rates with your creditors, may negotiate balances with your creditors, and often arranges for the accounts to be closed. The theory behind a DMP is two-fold.

First, if you need help managing debt, your credit has probably already been damaged. Although the DMP initially creates further damage to your credit, the DMP also provides a mechanism for you to repay your debts and begin to rebuild your credit. Second, the DMP can offer relief from collections, high interest rates, and unmanageable payments.

If you are diligent and disciplined, which you need to be anyway, you can accomplish the same thing on your own. However, your creditors will likely want to interview you and review your monthly income and expenses. Basically, they want to know that you can pay under the new repayment terms. If you use a DMP, your creditors are taking the DMP sponsor's word that you are a worthwhile debtor.

That leads us to the job of the DMP sponsor. The Federal Trade Commission and U.S. Trustee Program, which is an arm of the U.S. Department of Justice, regulate credit counseling, in addition to most, if not all, state governments. These regulations require that the DMP sponsor help you with budgeting and offer ongoing assistance to help you stay on track. The federal government and state attorneys general warn you not to work with a credit counseling agency that only wants to do a DMP without assisting you with budgeting. Creditors rely on these regulations before accepting a DMP proposal, and you can imagine the harm which results from doing a DMP without the budgeting aspect. The federal government goes further and recommends that you only work with credit counseling agencies which provide ongoing budgeting help and guidance. The recommendation protects both you and the creditor.

In other words, to make the DMP successful, you must have a budget that works, use effective budgeting controls and make wise decisions with your money throughout the duration of the DMP. One reason for this is that being unable to successfully complete the DMP puts your credit at further risk of damage and quickly thrusts you right back into the position you were before signing up for the DMP – high interest, unmanageable payments, etc. Credit counseling agencies are doing you a disservice if they do not help you with budgeting.

One final note is that credit counselors don’t work for free. There are fees associated with the DMP. Those fees may be paid by your creditors ... and they may not. One common method of payment is to collect a higher amount from you than the agency pays to the creditor. For example, if your creditor agrees to accept 70% of the balance as payment in full, the DMP sponsor may collect 75% from you and keep the 5% difference as payment of their fees.

As a CFP® Professional, R. Joseph Ritter, Jr. CFP® of Zacchaeus Financial Counseling, Inc. provides a comprehensive review of your situation to determine what is possible and whether a particular strategy will work best for you. If you need help formulating a debt payment strategy, we can certainly assist you with developing an effective budget and advocating for you with creditors.
Have you ever wondered what the catcher and pitcher discuss during a time-out in a professional baseball game? From time to time you will see the catcher go to the pitching mound, have a brief discussion, go back to home plate, and then the game resumes. What are they doing?

The catcher is not presumptuously giving the pitcher advice or telling the pitcher how to do his job. Runners are on first and second bases. Rather, the catcher is generally reminding the pitcher of the basic elements of the pitch and providing the pitcher with encouragement and positive support.

Imagine this scene – Walter Johnson or Nolan Ryan take the mound to pitch to Ty Cobb or Babe Ruth. At what point might the pitcher – skilled and proven as he may be – momentarily question his ability to strike out such storied hitters? The pitcher might quietly say, “Do I really have what it takes?” Or, when the pitcher makes a mistake, does he really have the confidence to play through the rest of the game? The pitcher might say, “Boy, I’m just no good. I should throw in the towel.”

If that was you on the mound, how would you get these nagging thoughts out of your mind? Then, up runs the catcher and says, “Com’ on, Walt. Com’ on, Nolan. You got this. Shake it off. You have what it takes. Plant your feet, finger the ball, wind up the pitch, and release. You’re doing fine.”

And then, the pitcher effortlessly strikes out the next three hitters to end the inning.

This is the job of the financial planner. When you hit an obstacle greater than your resources, or you find yourself reeling from the consequences of a life mistake, or you have questions about navigating our complex world, nothing can help more than a time-out with a catcher – a coach of sorts who can focus your efforts, lift your spirts and help you shake off the dust of life’s flub-ups.

It’s your job to get the ball down the field. No one said you had to do it alone. A coach is just a phone call or click away.

    Climbing the Money Tree


    R. Joseph Ritter, Jr. CFP® is a CERTIFIED FINANCIAL PLANNER(TM) and founder of Zacchaeus Financial Counseling, Inc., a non-profit organization providing financial planning services to low-income households and households experiencing financial strain.

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