Operators of Student Loan Debt Relief Schemes Settle FTC Charges

The settlements stem from an FTC-led enforcement sweep announced last year

The defendants in two student loan debt relief cases have agreed to settle Federal Trade Commission claims that they charged consumers illegal upfront fees and falsely promised to help reduce or forgive student loan debt burdens.

The settlements with Strategic Student Solutions and Bloom Law Group are part of a coordinated federal-state law enforcement initiative targeting deceptive student loan debt relief scam announced by the FTC in October 2017, called Operation Game of Loans.

Strategic Student Solutions

The FTC has obtained a settlement with an unlawful debt relief and credit repair operation for violating the FTC Act, the Telemarketing Sales Rule, and the Credit Repair Organizations Act after they allegedly bilked millions of dollars from consumers by falsely promising to reduce or eliminate their student loan debt and offering them non-existent credit repair services.  The settlement also resolves the FTC’s action against relief defendant DG Investment Properties LLC.

According to the complaint, individual defendant Dave Green and his companies – Strategic Student Solutions LLC, Strategic Credit Solutions LLC, Strategic Debt Solutions LLC, Strategic Doc Prep Solutions LLC, Student Relief Center LLC, and Credit Relief Center LLC – preyed on consumers with student loan debt by falsely promising to reduce their debt or payments through enrollment in student loan forgiveness or other programs. The defendants also falsely promised to apply monthly payments to consumers’ student loans and to improve credit scores and histories in addition to making other false claims and charging unlawful advance fees.

The defendants are permanently banned from debt relief and credit repair activities and from making misrepresentations or unsubstantiated claims related to financial or any other products or services. In addition, the order includes a monetary judgment of more than $17 million. After the defendants turn over substantially all of their assets, worth more than $4 million, the judgment will be partially suspended due to their inability to pay the full judgment.

Bloom Law Group (Defendant in FTC v. A1 DocPrep, Inc.)

The FTC has also obtained a settlement with Bloom Law Group PC (also doing business as Home Shield Network and Keep Your Home USA), one of the defendants who participated in a scheme that allegedly defrauded thousands of consumers out of millions of dollars. The FTC charged that the Los Angeles-based operation took millions from consumers through unlawful student loan debt relief and mortgage assistance relief schemes.

According to the complaint, the defendants falsely claimed to be from the Department of Education, and promised to reduce borrowers’ monthly payments or forgive their loans. The FTC also alleged the defendants targeted distressed homeowners, making false promises to consumers that they would provide mortgage relief and prevent foreclosure.

Under the settlement order, the defendants are banned from debt relief and telemarketing activities and from making misrepresentations or unsubstantiated claims related to financial or other products or services.

The order includes a judgment of more than $9 million, representing gross revenues of the defendants’ debt relief and MARS operations, minus refunds. Due to inability to pay, the order  partially suspends the monetary judgment after the defendant turns over all of its assets, $54,000.

Litigation continues against co-defendants Homan Ardalan, A1 DocPrep, Inc., and Stream Lined Management.

The Commission vote approving the stipulated final orders in Strategic Student Solutions was 5-0. The U.S. District Court for the Southern District of Florida entered the order on May 29, 2018.

This article by the FTC was distributed by the Personal Finance Syndication Network.

Asked to pay by gift card? Don’t.

Has someone asked you to go get a gift card to pay for something? Lots of people have told us they’ve been asked to pay with gift cards – by a caller claiming to be with the IRS, or tech support, or a so-called family member in need. If you’ve gotten a call like this, you know that the caller will then demand the gift card numbers and PIN. And, poof, your money is gone.

Scammers are good at convincing people there really is an emergency, so lots of people have made the trip to the Walmart or Target or CVS to buy gift cards to send these callers. And scammers love gift cards – it’s one of their favorite ways to get your money. These cards are like giving cash – and nearly untraceable unless you act almost immediately.

So here’s the most important thing for you to know: anyone who demands payment by gift card is always, always, always a scammer. Try this gift card buying exercise out at home – especially when anyone asks you to pay with a gift card:

Q: Should I buy an iTunes, Google Play, Steam, Kroger, Walgreens, BestBuy, Amazon, CVS, Rite Aid or ANY OTHER gift card for someone who demands payment? For any reason?

A: NO.

Gift cards are for gifts, not payments. If you’ve bought a gift card and lost money to someone who might be a scammer, tell the company who issued the card. (The contact info might be on the card, but might require some research) Call or email iTunes or Amazon or whoever it was. Tell them their card was used in a scam. If you act quickly enough, they might be able to get your money back. But – either way – it’s important that they know what happened to you.

This article by the FTC was distributed by the Personal Finance Syndication Network.

Complaint snapshot: An analysis of debt collection complaints

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In our latest Complaint Snapshot, the Bureau of Consumer Financial Protection examines complaint trends, with a focused look at complaints about debt collection. 

Since July 2011, the Bureau has received approximately 400,500 debt collection complaints, which is 27 percent of the total complaints we’ve received. In-depth analysis of debt collection complaints helps us to understand the problems consumers are experiencing with debt collection. 

Some common themes emerged in our analysis of these complaints. For example, some people reported that there were debts on their consumer credit reports but that they did not have prior written notice of the existence of the debt. Some people stated in their complaints that they felt uncomfortable disclosing personal information to people who called asking for it because they were not sure whether the person calling was a legitimate debt collector. People also complained about the communication tactics companies used when attempting to collect a debt. 

Overall complaint trends

In addition to focusing on debt collection, the Snapshot also examines complaint trends more broadly. 

“Credit or consumer reporting” was the most-complained-about financial product or service category in March 2018. Thirty-seven percent of the approximately 30,300 complaints received in March were about credit or consumer reporting. Debt collection was the second most-complained-about consumer product. It accounted for 27 percent of complaints. The third most-complained-about financial product or service was mortgages, accounting for about 10 percent of complaints.

If you have a problem with a consumer financial product or service, you can submit a complaint online or call us at (855) 411-2372, Monday through Friday from 8 a.m. to 8 p.m. ET. We provide complaint-handling services to people in more than 180 languages and to those who are deaf, have hearing loss, or have speech disabilities. You can also read our answers to common financial questions or call us if you simply have a question about a financial product or service.

Debt collection resources

If you have questions or face problems with debt collection, the Bureau has a wide range of tools and information online, including answers to common debt collection questions and sample letters you can use. These resources can help you understand what you can do when you are contacted by a debt collector.

This article by was distributed by the Personal Finance Syndication Network.


I Need an Honest Answer if I Should Settle My Debt

Question:

Dear Steve,

I have private student loan date mid-2014 around $8000.00 dollar. My college made payment arrangements and I was paying just 25 dollars a month now they reported credit bureau saying accounts charge off and transfer to a collection agency. I spoke to the collections agency and they want to settle the loan about 50%.

My question now is should I accept or decline this offer? If reject this offer what could be consequences? I am really confused what should I do. Expecting honest answer, please.

Krishna

Answer:

Dear Krishna,

Depending on what state you live in the Statute of Limitations may have expired and you could use that as a defense if you were sued over the old debt.

However, debt settlement is a process where to parties come to an agreement on how to resolve an old debt. The amount of the agreement is between the debtor and creditor. There is no set amount.

If you do decide to settle the debt the amount you pay should be reported as paid and the amount that is charged off / forgiven can be reported as a bad debt. That reporting should extend for 7 years from the date you last went delinquent on the debt which sounds like 2014.

The amount of debt forgiven may be treated as taxable income to you if you are not insolvent. You can get more information on that here.

You can either attempt to negotiate with the collector yourself or hire someone to deal with the creditor and make the process as smooth as possible. Another advantage of hiring an experienced professional is they will have a better idea what the current typical amount that specific creditor is settling for.

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.

New List Identifies More Ways to Access Credit Scores—for Free

Did you know that checking your credit scores and credit reports is one of the first steps toward learning more about your credit history?

You can request your credit reports for free every 12 months from each of the three major credit reporting companies. However, credit reports currently do not include free credit scores.

The good news is that over the last few years, many financial institutions have started to offer consumers free access to one of their credit scores. 

Check out the updated list of companies and organizations that said they offer free credit scores to learn about your options for accessing one of your credit scores free of charge.

Why do I have different credit scores?

You might find that you have access to credit scores from more than one company and that these scores are slightly different. That’s okay. Keep in mind that you don’t have just one credit score—many credit scores are calculated and available to you, as well as to lenders.

Your credit scores vary based on the scoring model, the date when they are computed, the type of loan product, and the credit reporting company data used to calculate them. 

The initial credit score you obtain from a company may or may not be different from the one that company, and other businesses, later use to make credit decisions about you. Check out the infographic to see more.

Where can I turn to see one of my credit scores free of charge?

A few types of organizations responded that they offer free credit scores. 

  1. Credit card issuers provide some of their customers free access to one of their credit scores. If your credit card company is on the list, you may have access to free credit scores. Check your online account portal or mobile app to see if you already receive free access. If your company is not on the list, check the company’s website to see if they offer this service.
  2. Financial institutions have also started to provide access to free credit scores to customers who use financial products besides credit cards. If your financial institution is on the this list, you may have access to free credit scores. Check your online account portal or mobile app for your deposit or checking account, loan, or mortgage to see if you already receive free access.
  3. Nonprofit credit and financial counseling providers are now able to offer free credit scores to the people they serve. Check out the list or reach out to a local nonprofit credit and financial counseling provider in your community to see if they offer this service.
  4. Other companies offer this service to the general public. See the list of companies that said they offer this service. 

Why is the list being released?

Credit scores can provide a helpful benchmark for understanding your credit health. The purpose of the list is to make it easier for people to understand how they can access and use their credit scores to help manage their financial lives. 

In November 2017, a notice was published on the Federal Register’s public website asking companies to state if they want to be included in the update to a list of companies that responded and said they offer consumers free access to credit scores. The updated list is based on voluntary responses to this notice.   

The accuracy of third-party information is not guaranteed and listing a company does not constitute an endorsement. There may be other resources that also serve your needs.

This article by the CFPB was distributed by the Personal Finance Syndication Network.


Writing a Craigslist Ad That Sells

Craigslist is by far the easiest (and cheapest) way to sell all that junk cluttering your house. It’s as simple as posting a listing for the item(s) you are trying to sell, and then waiting for the responses to come flooding in. The hardest part for new users is figuring out how to write the post.

Most people don’t realize that to get the most out of your ad, you must think like a buyer when you write your ad. If you were looking to buy this item, what would you want to know about it before taking the time to email the owner? If you were a buyer, would you even take the time to reply to an ad that didn’t tell you anything about the item?

It’s very important to include at minimum, the following in your ad:

1. Price

Buyers want to know how much you are asking for your item before they take the time to email you, or even open your ad, because if you’re asking too much, they don’t want to waste their time with you. Make sure that you have the price clearly listed in the ad as well as on the space near the top, where you are allowed to share your price next to your listing title.

2. Condition

Your potential customers want to make sure that they are getting what they want and need. If you have a pretty beat up iPhone, describe its condition as well as possible. For electronics, make sure that you note any problems it may have. By doing this, you’ll find the right buyer that will not want to return the item after purchase.

3. Model # (if applicable)

Having a model number in your listing is super important if your item does have a model number. Some people may be searching for that exact model to replace or repair their own. Maybe they want it to add to a collection. There are also re-sellers on craigslist. They want to know the item model number so that they can check it out online to see if they can make a profit off it.

4. Brand

Whether you’re selling clothes, phones, shoes, or furniture, brand is always important to have in your listing. Brand-picky people will pay extra for items if they are a name brand, even if there’s another item just like it for less. If you have a nice brand name item, tell the brand name in the title as well as the listing.

5. Location

Craigslist gives you a textbox to write your location, so use it. Say your city, not the region. People want to make sure that you’re not too far away before they contact you about something. In your ad, try to be descriptive with your location without giving away your address. Maybe give a zip code or a local landmark?

6. Description

This one is especially important. Buyers want to know what they are buying before they buy it. Tell as much as you can about the item, including color, style, etc.

7. Pictures

If you’re listing DVDs or something like that, you don’t usually need pictures. For most everything else, pictures are a necessity. It can show buyers more about your item than words can. Some people only search listings with pictures, so having a picture increases your chances of being seen.

This article by Brittney Walker first appeared on The Dollar Stretcher and was distributed by the Personal Finance Syndication Network.


Things My Dad Taught Me About Money

Some of the fondest moments memories in my life are of helping my Dad around the house and listening to him explain why he did and didn’t do things. Although I didn’t know it at the time, he was building a foundation for a frugal lifestyle. We talked about how to fix things. How and when to buy. When not to buy. Now I’m older and he’s gone. But I think it’s important to share the same types of things with my kids. Most of them aren’t earthshaking. Some are old-fashioned. But taken together, they make the difference between controlling your finances or having your finances control you.

Wait before you buy. If you’re like me, every once in awhile, ‘buying fever’ strikes. Whether it’s a book, a DVD player or a new laptop, the urge to BUY NOW is almost overwhelming. Sometimes I’m amazed at how much I want this thing. When I was a boy Dad would make me wait a few days before buying that new baseball glove. I used to chafe under the restriction. But, there were times that the buying fever went down and I found that I no longer wanted to make the purchase. As I’ve grown older I recognize that there are a certain percentage of purchases that I won’t make if I’m just willing to wait a few days. And if I buy something after waiting awhile, the joy of ownership is that much sweeter.

Shop before you buy. When you do decide that you want something take the time to shop around. Don’t buy at the first store that carries the product. By shopping around you’ll make sure you get the best price, best service and best warranty. You’ll avoid the mental anguish of finding the item at a lower price just after purchasing it.

Consider floor models/demos/etc. While you’re shopping ask the salesman about floor models, demonstrators and discontinued models. Anything that might cause an item to be sold at an unusual discount. I’ve seen TV’s sold at significant price reductions just because they’re last year’s model. It made no difference in the usefulness of the TV, but the retailer wanted to clear out the old inventory.

Ask for discounts. It never hurts to ask for a discount. The worst thing that can happen is that they say no. It helps if you have a reason, but it’s not necessary. Sometimes the dealer won’t give a discount, but they’ll throw in something to ‘sweeten’ the deal — free delivery, an extra battery for a cell phone, cables for your printer. Things like free delivery don’t cost the seller much, but reduce the cost you pay. You get more than they give up.

Pay cash. To my Father, paying cash was a firm rule. In fact, I had to talk him into getting his first credit card in his 60’s. His reason for paying cash was simple. If you didn’t have the cash to pay for something you couldn’t afford it. If you follow his rule you’ll never have debt problems. Yes, there are some exceptions. Today, it’s very difficult to buy a first house for cash. But for everything else it can be done. Sure, they’ll be some things that you don’t buy. But if you can’t afford to pay cash today, what makes you think that you can afford to pay the principal AND the interest tomorrow?

Don’t borrow money. Regardless of what the marketers say, consumer debt is probably the worst thing that has happened to this country financially in the last 50 years. It wasn’t until people started widespread buying on credit that they even tried to play ‘keep up with the Jones’. That pressure to put on a prosperous front has strained many a marriage. How many people do you know who are under tremendous stress because of the money they owe? The problem isn’t limited to families, either. Our Federal government is a prime example of the tyranny of debt. If we didn’t have to pay the interest on the Federal debt, the annual budget would be in balance. The taxes we pay today are enough to pay for today’s services. But they’re not enough to pay for today’s needs and yesterday’s overindulgence.

Save 10% of what you make. Even as a boy, I was expected to save part of my allowance and then later my earnings. In those days you ‘saved something for a rainy day’. The funny thing was that I didn’t realize that I was developing a lifelong habit. By only spending 90% of the money that was available I was always living a little bit below my means. Your wants (if you’re in control of the situation) are based on how much money you have available. As your income increases you’ll still feel more prosperous, just at a slightly lower level. The result is that you’ll never be stretching the envelope of your budget.

Do you own something already that can do the job? Before you go buy something new, is there something that you already own that can accomplish the task? Recovering an old chair could be a far better option than buying a new one. If you can do the job yourself it’s particularly frugal.

Perform routine maintenance. Neglecting your possessions is a sure way to see that they deteriorate before their time. If you mistreat your car you’ll cut it’s life in half. It’s true of most everything you own from your carpet to your roof. In fact, the time that’s needed to care for your possessions is a good reason not to buy too many things. The more you own, the more you need to care for.

Learn to do basic repairs. Most basic repairs can be done successfully by an informed homeowner. When I was a boy Dad had me hand him tools as he performed these tasks. Although I didn’t know it at the time I benefited more than he. Even though my young mind wandered and often he would remind me to aim the light where he was working, I was learning by watching. Over the course of my boyhood I would ‘help’ him with most of the common projects that the typical family faces. When I had a home of my own those lessons were enough to get me started on my own repairs.

My children are still small. But when I’m working around the house I encourage them to ‘help Dad’. Sure there are times that it would be faster to just reach for the screwdriver. But we’re spending time together and they’re learning. Someday I’m sure that these little lessons will pay dividends when they’re on their own.

This article by Gary Foreman first appeared on The Dollar Stretcher and was distributed by the Personal Finance Syndication Network.


4 Tips for Eating Healthy While Still Saving Money

A couple of weeks ago, I mentioned that maintaining your health was more important than saving money. While retaining insurance is one example of that, the same concept can often apply to the foods we buy and what we consume. One unfortunate irony these days is that some of the least expensive foods are also the least healthy for us. As a result, anyone who’s ever made a real effort to adopt a healthier diet may have been turned off by the heightened costs of doing so.

Now I’m not suggesting that you should never indulge in the occasional fast food meal or enjoy some “guilty pleasures” from the grocery store. However, if you are looking to make some healthy changes but don’t want to spend a fortune on food, there are a few ways I’ve found to make that possible. With that, here are four tips for saving money while still eating healthy.

Plan your meals and buy in bulk

Buying fresh produce and meats can be great in terms of eating healthy but the problem is that they won’t stay fresh for very long. Because of this, if you don’t plan ahead, you could end up letting good food go to waste. That’s why it’s a good idea to put more time into creating your shopping list and have a meal plan in place so that you can make full use of your fresh items.

Of course, in some cases, you may also be able to stock up on certain items and freeze them for later. In fact, according to the USDA, many types of meat can be frozen for up to four months, while the freezer life of poultry can be even longer. As a result, don’t feel like you need to buy processed or preservative-rich items in order to enjoy the benefits of buying in bulk.

Shop sales and specials

Another disadvantage to shopping for healthy items is that you’re far less likely to find coupons for things like produce than you are for sweets and fatty foods. That said you may still be able to score some good deals. For example many stores will have good sales on select in-season produce you can take advantage of by featuring those items more heavily in your meal plans for a time. Similarly holidays often bring upon various meat sales that you can use to restock your freezer at a great price.

Something else to be on the lookout for are “manager specials.” In most cases, these specials offer discounted prices on produce, meats, and other items that are approaching their expiration date. That fact might be a turn off for some but keep in mind that these items are still perfectly safe to eat as long as you use them in a timely manner.

Drink more water

One easy way to lower your grocery budget and make a positive health change is to opt for water instead of things like soda. Even if you do end up buying bottled water or utilizing a filtering system like Britta, the cost if often far lower than most other beverage options.

As for those like myself who might need a little more than just plain water to wash down their meals, I’ve found sparkling waters to be a great alternative to sodas. While name-brand seltzers like La Croix can actually be even pricier than Coke or Pepsi, the popularity of sparkling water has brought a number of generic options to stores like Aldi. Personally, that’s where I’ve been stocking up on calorie-free beverages, lowering both the amount of money we spend at the grocery store and the amount of sugary soda I consume.

Make “healthy” junk food

Finally, if you don’t want to completely bid adieu to some of your fatty favorites, there may be a way for you to at least craft a healthier version of it. Something in this vein that my wife and I love to do is make our own pizzas. Not only does this allow us to customize the ingredients in an effort to cut calories but it can also allow us to cut costs. Of course this is just one example and, thanks to the Internet, there’s no shortage of creative recipes you can find that could help you find a new frugal and healthy favorite.


As a trip to your local Whole Foods will tell you, shopping for healthy foods is rarely a cheap endeavor. However there are still a few changes you can make to your shopping list and diet that could be a step in the right direction for your health while still not causing a major hit to your wallet. By planning ahead, seeking out sales, and making other adjustments, you may just be able to enjoy the best of both worlds.

This article by Kyle Burbank first appeared on Dyer News and was distributed by the Personal Finance Syndication Network.


Work-at-Home Scams Lead to Business Coaching Schemes

In the business world, “leads” refer to the contact information of potential customers. In the scam world, it means the same thing. While scammers find their targets in all kinds of ways, one method is to go to people who have already been victims of a related scheme.

For example, let’s say a company gets you to pay for a work-at-home program, promising that you’ll make a lot of money by starting a new online business. That company may then sell your contact information to a second company. Company #2 then might offer to sell you, say, coaching services that they promise will make your new business a success. In fact, they may just make your wallet even lighter – by thousands of dollars.

The FTC has sued lots of scammers who have sold these kinds of bogus programs and services. In the latest example, earlier this week the FTC announced a lawsuit against Vision Solution Marketing, and others. According to the FTC, these companies fooled people into thinking they would get useful business information to help them make thousands a month working from home. The FTC says these defendants – who took in millions of dollars bought leads, as described above, from a company that had sold a work-at-home program. (In fact, the FTC settled a case earlier this year against another company, Internet Teaching and Training Specialists, LLC (ITT), the sellers of one of those programs.) In this case, according to the FTC, people on that work-at-home lead list were offered the chance to pay up to $13,995 for a coaching program that would supposedly give them one-on-one guidance about building their new business. But what they got instead was usually just information freely available online. Most people ended up with no functional online business, earned little or no money, and wound up heavily in debt.

The FTC’s lawsuit stops this scheme in its tracks, but the best way to protect yourself from illegal schemes is to learn about how to spot them. You can start by checking out the FTC’s information on work-at-home related scams. And whenever you think you’ve spotted one, tell the FTC.

This article by the FTC was distributed by the Personal Finance Syndication Network.

Compound Interest for Poor People

Please don’t tell me that if I had $1,000 and invested it for 10 years at 10% interest I’d have a big pile of money. I don’t have $1,000 and paying next month’s bills is my biggest problem.
Still Poor

We’ve all seen articles on the wonders of compound interest. But most of us don’t have large sums of money just lying around waiting to be invested wisely. So we’re going to see how us ‘poor folks’ can apply compound interest to make a difference in our lives.

First, we do need to make sure everyone understands compound interest. Stated simply, it’s when you earn interest today on the interest that you earned yesterday. Suppose you banked $1.00 yesterday and earned one cent interest. Today you’ll be earning interest on $1.01. The interest that you earn on that one cent is called compound interest.

Unlike some financial deals, you don’t need to be a wizard to use compound interest. There are a few simple rules that apply in all cases. If you apply them you’ll improve your financial lot.

It’s always better to compound more frequently. Daily compounding is better than monthly or quarterly. You’ll begin earning interest on interest on the second day, not the second month. So you want to always choose the shortest compounding period offered to you.

More time magnifies the effects of compounding. Let’s say you put some money away today at 5% interest. That money will double in about 14 years. If you left the interest in the account you’d have twice as much money earning interest in years 15 through 28. It’s like you were getting 10% interest on your original savings. By year 29 you’ll be earning 20% interest on your original savings! The rest of the account will earn less depending upon how long it’s been in the account.

Time and compound interest, however, are a double edged sword. That 14% interest you’re paying on your credit card debt is actually much higher if you figure in compound interest.

OK, now let’s get down to how us poor folks can take advantage of compound interest. Could you find a way to save $5 per month? Maybe skip lunch at McDonalds or rent fewer movies each month. If you drive a lot you might save 2 gallons of gas by getting rid of the extra weight in the trunk of your car. Maybe send a couple of handwritten notes instead of greeting cards. If you look (and you really want to) you’ll probably find some way to save that $5 each month.

“But, at that rate it’ll take forever to save anything.” Well, let’s see. If we save $5 per month, earn 5% interest compounded monthly and continue to do that for 10 years what’ll we save? Well, we’ll have saved $600 (120 x 5). But the account will be worth $776. That’s enough for a purchase or repair bill.

“You don’t understand. I have credit card debts. I can’t save money.” Oh, but you’re wrong, my plastic using friend! Let’s suppose you take that $5 per month and add it to your credit card payment. You’ll actually do better than the saver. Let’s assume that your credit card interest rate is 14% annually. After ten years you’ll have paid off an additional $1,315 in credit card balance.

Maybe you could do a little better. How about saving $5 per week? That’s about $21.50 each month. You might be able to save that much by adjusting your thermostat by one degree. Take a brown bag lunch to work one day a week. One less dinner out each month. Drop a premium cable channel or two. Maybe a combination of smaller savings.

What would that do for you? Well, if you just put $5 a week away at 5% interest you’d have saved $2,600 over 10 years. But your account would be worth $3,371. That’s a fair amount of money. A nice down payment for a car. Or you could remodel a bathroom. Or maybe you just want to spend the interest that will be earned on the $3,371 each year. You could spend about $168 every year forever and never touch your principal. Wouldn’t it be nice to know you’ll always have money for Christmas presents? Or to have a good start on your vacation each year?

Where can you earn 5% on your money? We don’t make specific investment recommendations, but the stock market has averaged just about 10% over any given 10 year period in it’s history. So you’ll be able to find mutual funds that will be able to get that type of return for you.

Some mutual funds have a minimum initial purchase of $500 or $1,000. Until you reach that level, you can use a savings account or online bank.

But, maybe you’re deeper in debt and just can’t see your way out. You owe thousands of dollars on your credit cards. Short of Aunt Harriet leaving you an inheritance, those cards will never be paid off. Well, you could apply your $5 per week to those cards. At 14% interest you’d wipe out $5,633 in credit card debt in 10 years!

So now you have a choice to make. You can say that all that fancy compound interest stuff is just for the wealthy. Or you can recognize that the same principles work for smaller amounts. And begin to act on that knowledge. Would you give up two Big Burger meals each month to have $1,000 in ten years? Now that you know the facts, it’s up to you.

This article by Gary Foreman first appeared on The Dollar Stretcher and was distributed by the Personal Finance Syndication Network.