Is Congress Offering More Empty Promises for Troubled Student Borrowers?

At long last, it appears as if some members of the U.S. Senate are acknowledging that student borrowers aren’t the only ones to blame for the $1.2 trillion mess we have on our hands.

Sen. Lamar Alexander (R-Tenn.), chairman of the Senate Education Committee, says that colleges and universities should be held at least partially accountable for the financial consequences of student loan defaults. The idea is that the institutions that benefited from a practically open spigot of federally funded student loans should be made to disgorge a portion of the money they permit students to over-borrow — or when they fail to prepare them for adequately paying jobs — if students subsequently end up defaulting on their debts. Others agree with that notion of holding the schools responsible for students who have, as Sen. Jack Reed (D-R.I.) puts it, “literally mortgaged their economic future” for the sake of their educational pursuits.

Never mind that the student-loan programs were enacted by this same legislative body, or that public and private lenders are equally responsible because of lending practices that rely on a borrower’s virtual inability to escape the financial obligation — even in bankruptcy — than they are his or her fundamental creditworthiness. That’s beside the point.

Way to go, senators, for finally coming around to an idea that is as old as time: Demanding refunds from merchants that have overcharged or failed to deliver as-advertised products or services.

Still, as hopeful as this legislative epiphany may sound, its transformation into results-producing lawmaking remains uncertain.

To start, the basis for this concept is the Cohort Default Rate, a calculation that measures the extent to which loan failures occur for groups of borrowers who have in common the year in which their debts first became due (typically after they left school—with or without attaining a degree, as nearly half of all students do, largely because of financial constraints).

Unfortunately, the Department of Education doesn’t believe that CDRs are a valid indication of systemic weakness. This, despite the fact that lenders, investors and rating agencies have long and successfully relied upon the same metric to reveal faulty credit-underwriting practices, improper loan structuring, ineffective servicing or, in this instance, all of the above.

Next is the nonsensical and thoroughly inconsistent timeline the ED uses to call past-due loans into default. Unlike for just about any other form of consumer debt, only federal student-loan borrowers are permitted to miss as many as nine to 12 months of payments before their loans are considered in default, versus three months for all others.

Just how much rope do we need to hand these borrowers to ensure that they’ll properly hang themselves?

Last, what’s not addressed is how charging back the schools would benefit those who default on their loans. Will their debts be forgiven? Will their credit reports be purged of derogatory payment histories in this regard? Will the IRS be directed not to tax their forgiven balances, as is the case for exonerated mortgage-loan shortfalls?

Forgive me for my skepticism, but unless these issues are appropriately incorporated into whatever legislation that results, we’ll have accomplished nothing more than yet another round of selling empty hopes to desperate souls just because they happen to represent an increasingly important constituency in the run-up to the next election cycle.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its affiliates.

Related Articles

This article originally appeared on Credit.com.

This article by Mitchell D. Weiss was distributed by the Personal Finance Syndication Network.


Why Kicking Debt Collectors Off of Your Credit Report Just Got Easier

Deborah is trying to clean up her credit so she can purchase a home. But it’s not proving easy. In particular, three collection accounts are causing major headaches. “One has listed a collections agency no longer in service, One collection agency will not return my calls. (left messages) and one has false info on it,” she writes on the Credit.com blog.

Dealing with collection accounts on your credit reports can sometimes be a long, frustrating process.

But relief is on the way — at least for some consumers. A recent agreement between 31 state attorneys general and the three major credit reporting agencies (CRAs) — Equifax, Experian and TransUnion — will change certain practices related to credit reporting. And when it does, there will be several important changes that may impact consumers who have debt in collections.

The End of Double Jeopardy?

If you don’t pay a collection account, it may wind up with a second — or third — collection agency, resulting in multiple negative items on your credit reports. Sometimes referred to as “double jeopardy,” two or three collection accounts for the same debt can affect your credit scores.

What will change: When collection agencies sell, transfer or no longer manage accounts they must update or delete the account. The agreement requires the CRAs to update their training materials for these companies that report, and make sure they know and follow this requirement.

Who Is That?

Sometimes consumers have found collection accounts listed on their reports but aren’t sure what they are for. Collectors are supposed to report the name of the original creditor but not all do.

What will change: Collection agencies are already supposed to provide the name of the original creditor and a “classification code” that indicates the type of debt (for example, credit card or medical). Under the agreement, the CRAs must make this information mandatory and can reject accounts that don’t meet the standards.

Note that you still won’t see the names of medical providers because doing so may compromise your right to medical privacy; for example, if your credit report showed the name of a substance abuse rehabilitation clinic or a cancer center. “Privacy is the issue here,” says Norm Magnuson vice president of public affairs for the Consumer Data Industry Association. “The collection account is codified so that others who receive the credit report can’t identify the medical facility. The consumer can get the medical facility’s name from the collection agency and/or the credit bureau if they want to validate the debt or don’t know for whom the collection agency is working the debt.”

But I Paid That!

We’ve received complaints from consumers who have paid off, or are making payments toward, collection accounts but their credit reports don’t reflect those payments. From the complaints we received about this issue, it doesn’t seem to be unusual for collectors to fail to update accounts when payments are being made.

What will change: Under the settlement, credit reporting agencies must require collection agencies that report data to “regularly reconcile” information about accounts that haven’t been paid in full. If they don’t? The agreement says, “This regular reconciliation will be accomplished, in part, by periodic removal or suppression of all collection accounts that have not been updated by the Collection Furnisher within the last six months.” In other words, if a consumer has been making payments but the collection agency fails to update the account for at least six months, the account will either have to be removed or “suppressed,” which means it won’t be shown to companies that order the report, and won’t be used to calculate a credit score.

It’s worth noting, though, that unlike other types of credit accounts, making regular payments on a collection account typically doesn’t help your credit scores. Under the most widely used credit scoring models, a collection account is considered negative, regardless of the size of the balance or payments that are being made. Still, there are some credit scoring models that ignore collection accounts where the balance is zero (VantageScore 3 and FICO 9) so it’s helpful to make sure the information that is reported is accurate.

I Had No Idea

A reader recently told us he was contacted by a collection agency out of the blue, trying to collect on a court citation. “I have never received a citation and have contacted the court since I was not the driver of vehicle and live out of state.” Whether is was a toll charged to you via your license plate number, or a parking ticket your son or daughter “forgot” to tell you about, tickets and other bills can sometimes wind up in collections without your knowledge. A survey by Credit.com found that one in 10 consumers who reviewed their credit reports said they found a collection account they weren’t aware of on their reports.

What will change: The agreement prohibits collection agencies from “reporting debt that did not arise from any contract or agreement to pay (including, but not limited to, certain fines, tickets, and other assessments).” Even better, this prohibition is retroactive: the CRAs are supposed to find a way to identify previously reported accounts of these types and remove them.

But…Hold Tight

Like any change of this scale, this won’t happen overnight. Magnuson says these initiatives must be implemented within 6 – 36 months from the effective date of May 20, 2015. In the meantime you still have the right under the federal Fair Credit Reporting Act to dispute information on your credit reports that you believe is incorrect or incomplete. That won’t change.

And neither will the need to review your credit reports and monitor your credit scores on a regular basis for changes. You can get your free annual credit reports from AnnualCreditReport.com, and you can get a free credit report summary including two scores every month on Credit.com. After all, you can’t fix a problem you aren’t aware of in the first place.

Related Articles

This article originally appeared on Credit.com.

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


Filing Debt and Credit Complaints with the CFPB

Throughout this website, and several others I contribute to, I suggest people file complaints with the Consumer Financial Protection Bureau (CFPB). I am usually responding to reader comments when I do, so the reason for suggesting filing the complaint is contained in each comment exchange, but only briefly. I want to be sure readers have a strong grasp as to why I am suggesting your complaint be filed with the CFPB, and also provide some commentary that I generally wouldn’t unless contained in a post like this.

First off, the CFPB was born from the recession that many attribute to the lack of stronger financial regulation. The CFPB has regulatory and enforcement authority in several key economic areas that all of us interact with on a daily basis. You may be thinking “that is all well and good… it is nice to have someone looking over it all and watching out for us, but were we missing that before”? Yes and no.

Much of federal regulation and enforcement of consumer financial products was spread out, and in my opinion resulted in being more spread thin. Yes, regulation existed, but enforcement in key areas was so slow to grind out positive outcomes for consumers, it seemingly may as well have not existed. Take CFPB direct oversight of the three big credit reporting agencies as an example. These large credit bureaus affect the vast majority of adult Americans, yet no one had the authority and oversight the CFPB now has over larger participants in the credit reporting space. The CFPB is perfectly positioned to be able to curb how credit bureaus allow debt collectors to reage collection accounts on credit reports.

Something else about the CFPB, and part of what I really want to drive home to readers, is they do give a rip, and really want to hear from you about your interactions with businesses you engage regarding debt and credit.

Debt and credit complaints to the CFPB get results.

The CFPB is actively involved in helping you get results from the complaints you file. Read the entirety of the initial CFPB complaint process page to get a feel for how they will manage your complaint. You can see there are several CFPB touch points and involvement in helping you resolve your complaint. You will remain updated and aware throughout the life cycle of your complaint.

Filing your complaint with the CFPB all starts on this page: http://www.consumerfinance.gov/complaint/.

The types of complaints filed with the CFPB can include concerns about debt collection and credit reporting, and other key areas of our financial lives, such as:

  • Student loans
  • Mortgages
  • Bank accounts
  • Car loans and leases
  • Credit Cards and Prepaid Cards
  • Pay Day and other types of consumer loans

Be thorough and provide complete information when submitting your complaint to the CFPB. You can upload documents if they would be helpful.

I often encourage putting an outline of your complaint together before you submit it to the CFPB. This will help you remember everything including dates, times of day for conversations you may have had, and an outline of what was said and by whom. That kind of detail will come in handy for the CFPB and the person investigating your complaint at the business you filed the complaint about.

Regulatory complaints can guide the future.

The CFPB is a future looking agency, and not about what just happened. In other words, your complaint may be about the recent past, but your complaints combined with others (to the CFPB and other state and federal agencies) can shape the world we live in later on.

I help people resolve debt and credit issues. My work puts me in a position to care about the big picture when it comes to debt collectors. And even though the CFPB is currently only directly supervising larger participants in the debt collection space, that supervision, and current rule making for debt collection being considered, means debt collection complaints have, and will continue to, guide the activity and focus of the CFPB.

But it is not just the CFPB that is in place to affect change through the complaint process. Businesses who are the targets of the complaints care about the issues too. No, I am not saying they care so much to have prevented the issues you had, or are having, in the first place (though they may). I am saying that it will be some of the better positioned people in the organization that will often be looking into the complaints they get from the CFPB. At a high level, that information is going to lead to changes in business practices that will trickle down to the people, processes and policies that you and I interact with.

You may never have a mortgage or student loan complaint. And you may never have to file one years from now after you have had a mortgage or three, and paid off student loans, as a result of the complaints that led to positive industry changes earlier.

I suspect that over time, the CFPB complaint process will provide us all with a tool that we can use to vote with our feet and wallet before we decide to engage with a business or service.

Businesses and services using the portal.

I also suspect the CFPB complaint portal will provide a tool for businesses interacting with other businesses. One example of how that may happen would be the relationship between credit card banks and debt collectors they use, or debt buyers they sell unpaid accounts to.

Debt collectors will likely always receive a high level of complaints in our current system. It is the nature of the business. The CFPB portal is already loaded with complaints against debt collectors. But any collection agency or debt buyer with a high level of unsatisfactorily resolved complaints; a high metric for certain types of complaints; or complaints going without response, and I can see banks using the data as what I will dub “the CFPB metric”. This metric could mean debt collectors and buyers losing contracts until the company shows improvement, or perhaps just ceasing doing business with anyone without a passing grade.

While I recommend doing everything you can to resolve complaints and concerns you have with in the consumer finance space by dealing directly with companies and service providers, the CFPB complaint process continues to impress me. The speed and impact the system delivers to people I have heard back from is huge.

I should also point out that your filing a complaint is not just about you getting something resolved in isolation. Your complaint can potentially help someone else after they read about how that same company stepped up to do right by you. They can then file their complaint with the CFPB where the may not have before, or perhaps even contact the company directly with more confidence instead.

I see the CFPB complaint process ultimately leading to consumer markets that place a higher priority on fair dealings.

If you have questions or concerns about filing your complaint with the CFPB, or would like to share the outcome of any complaint you filed, you are welcome to post in the comments below.

This article by Michael Bovee first appeared on Consumer Recovery Network and was distributed by the Personal Finance Syndication Network.


In Settlement with FTC, Debt Collectors Agree to Stop Deceiving Consumers and Pay Nearly $800,000

Consumers Allegedly Were Tricked into Paying Unnecessary Fees and Falsely Threatened with Legal Action

After allegedly misleading consumers into paying unnecessary fees and falsely threatening consumers with lawsuits, defendants in a debt collection operation have agreed to settle Federal Trade Commission charges.

The FTC alleged in its complaint that the defendants – a debt buyer and a debt collection law firm, both based in Mississippi – violated the FTC Act and the Fair Debt Collection Practices Act by deceptively charging consumers a fee for payments authorized by telephone.  According to the FTC, the defendants led consumers to believe that the fee was unavoidable when, in fact, those who paid by mail or online did not incur the fee.  The FTC also alleged that the companies violated the laws by falsely threatening to sue consumers as a means of getting them to pay.  A debt collector is prohibited by law from using false, deceptive, or misleading representations or tactics when collecting a debt.

Under the terms of the proposed settlement, the defendants will pay $799,958 in restitution for consumers.  The defendants also are barred from making any misrepresentations  when collecting a debt, including false claims that consumers must pay an extra fee when making payments on a debt or that they will be sued for not paying a debt.

According to the complaint, debt buyer Security Credit Services, LLC, and Jacob Law Group, PLLC have worked together since 2006 to collect debts nationwide.  Security Credit buys consumer debt accounts, and contracts with Jacob Law to collect on them.  The complaint alleges that Jacob Law called and pressured consumers to immediately make payments on their debts by authorizing electronic checks or credit or debit card payments over the phone.  Jacob Law allegedly told consumers they were required to pay an additional fee of $18.95 for this service, but routinely failed to mention that they could avoid the fee by mailing the payment or paying online.  Since 2008, the defendants have collected at least $799,958 in fees from consumers.

The FTC also alleged that Jacob Law Group implied that it would file lawsuits to collect the debts even when it did not intend to do so.

For consumer information about dealing with debt collectors, see Debt Collection.

The Commission vote authorizing the staff to file the complaint and approving the proposed consent decree was 4-0.  The FTC filed the complaint in the U.S. District Court for the Northern District of Georgia, Atlanta Division, on March 13, 2013, and has submitted the proposed consent decree to the court for approval.

NOTE:  The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest.  The complaint is not a finding or ruling that the defendants have actually violated the law.  The consent decree is for settlement purposes only and does not constitute an admission by the defendants that the law has been violated.  Consent decrees have the force of law when approved and signed by the District Court judge.

This article by the Federal Trade Commission was distributed by the Personal Finance Syndication Network.


FTC Returns More than $1.1 Million to Victims of Operation Involving Allegedly Bogus Health Insurance

The Federal Trade Commission is mailing 50,395 refund checks totaling more than $1.1 million to consumers who were victimized by a telemarketing operation that allegedly tricked them into buying worthless medical discount plans.

In June 2012, the FTC announced that it halted the scam. Under several settlement orders, Health Care One, Americans4Healthcare Inc., Elite Business Solutions, Inc., Mile High Enterprise Inc., and their principals were barred from having any role in a healthcare-related enterprise and from selling healthcare-related goods or services.             

The checks are being mailed by an administrator working for the FTC, and will expire 60 days after they are issued. Consumers with questions about the Health Care One refund checks should call the refund administrator at 1-877-690-7103.  For general questions about the FTC’s redress program, visit www.FTC.gov/refunds.

Health Care One and its affiliates allegedly deceived consumers by marketing medical discount plans as government-endorsed health insurance and claiming they would deliver substantial savings on consumers’ healthcare costs. According to the FTC’s complaint, filed in the Central District of California, the companies also falsely claimed that their program was widely accepted by healthcare providers in consumers’ local communities. The Health Care One companies touted their services in television commercials and radio ads. They promised “100% satisfaction” and a money-back guarantee.

Consumers should carefully evaluate claims about health insurance.  For more information see:  Discount Plan or Health Insurance?

This article by the Federal Trade Commission was distributed by the Personal Finance Syndication Network.


FTC Approves Final Consent Orders in Two Deceptive Auto Advertising Cases

Following a public comment period, the Federal Trade Commission has approved final consent orders involving two auto dealers that deceptively advertised the sale, financing and leasing of their vehicles.

Under the settlement orders, Jim Burke Nissan of Birmingham, Ala., and Ross Nissan of El Monte, Calif., are prohibited from misrepresenting in any advertisement the cost to purchase or lease a vehicle, or any other material fact about the price, sale, financing, or leasing of a vehicle. The consent orders also address the alleged Truth in Lending Act and Consumer Leasing Act violations by requiring the dealerships to clearly and conspicuously disclose terms required by these credit and lease laws.

The Jim Burke order also prohibits the auto dealer from representing that a discount, rebate, bonus, incentive or price is available unless it is available to all consumers or the qualification terms are clearly and conspicuously disclosed.

These cases were part of the FTC’s nationwide and cross-border auto sweep Operation Ruse Control, which was announced in March 2015. The Commission announced a final consent with National Payment Network, Inc., a company involved in the sweep that deceptively advertised its add-on biweekly auto payment plan, earlier this month.

The Commission votes approving the final orders were 5-0.

This article by the Federal Trade Commission was distributed by the Personal Finance Syndication Network.


10 Things to Never, Ever Say to Someone Who Was Just Laid Off

Getting laid off is one of the most stressful situations anyone can face in life. Year after year, one-third of workers quit their job or are laid off, either permanently or temporarily in Canada. The 1990s were characterized by a general feeling of job insecurity.While people deal with change and stress in many different ways, the following is a short list of possible emotional, psychological and physical responses that one may experience:

Typical emotional reactions include:

Anxiety
Shock/Disbelief
Irritability
Anger
Frustration
Resistance
Sadness
Fear
Loss of enjoyment or appreciation
Feelings of worthlessness
Loss of self esteem
Shame
These emotional responses make it even more difficult when questions or statements like the ones below are communicated. Dont assume to know anything about current personal finances, job hunting prospects or future endeavours. Instead offer a caring, listening ear – further below are some tips to help someone recovering from a job loss!

Related: 7 Ways to Rebound From Career Setbacks

How will you pay your mortgage!

This statement is based on the assumption that the individual recently laid off has no emergency savings, no financial skills, no fore-planning and could be taken as offensive.

Is there something you could have done differently!

This question also assumes it was the persons fault, that the individual deserved to be laid-off. This is especially hurtful if your friend had confided sensitive information to you about previous negative feedback from a manager or supervisor. It is certainly not the time to bring that up.

Im sure you tried your best: That Job was just not for you!

Surely this was meant to be helpful. However, gauging someone elses work performance or career/job fit is a slippery slope.

Maybe next time You will have more Luck!

Perhaps this is an effort to offer a more hopeful outlook. It still puts the future into question and may be more discouraging than helpful.

Have you started applying for Jobs Yet!

It’s wonderful to be supportive and keep your friend focused, but sometimes its good to give others time to think about whether or not they were happy in the last role, or if they should branch out into something completely different.

Maybe you should switch careers!

Without knowing what direction your friend wants to go in its really hard to get specific about what direction is best. Please dont offer a suggestion without really giving thought to whether it would be a good fit for your friend. We all have our different dream careers – but dont suggest your friend try teaching, for example, if she/he is often overwhelmed by being around kids!

Will you be able to cover your bills

Surely you are concerned about your friends financial well-being and security but given the circumstances, this will make things worse. Not only is your friend jobless now, but you are now reminding him/her that the bills are due too. Any attempt at drawing attention to things which may pose an extra burden or responsibility in a stressful time can make the situation look like impending doom.

Maybe you need to sell your house or give up your apartment!

Offering up advice on concrete next steps is also too abrupt. Let your friend come to you when they are ready to discuss anything as personal as finances and the way forward. Sometimes having the time to think through things is very important.

So and So was fired and he ended up on food stamps!

Case studies, whether good or bad can really backfire. Everyones situation is different and your friend knows that. Plus careers, industries, jobs are very different across cities, cultures and countries. So what happened to John at the hardware store that led him to food stamps – may not be relevant in your friends case.

With Your Age it will be next to impossible to find something else!

Please dont bring up age – especially as it relates to future career prospects. References to personal attributes like age, gender, background and even previous work experience will make the situation worse.

Tips for Coping

Here are some ways you can help others facing a tough lay-off situation. The resource center at Stanford university offers up these suggestions.

Be as supportive as possible

Let your friend or family member steer the conversation and be a listening ear. As with any type of loss the individual will have their own feelings and perspectives and will need to steer the conversation to relate how they feel.

Empathy is very helpful in helping individuals navigate through this emotional time.

Offer a helping hand

Exercise and having fun outdoors is an important antidote for stress. Offer to take your friend with you when you plan any outdoor activities.

Being mindful about eating and sleeping are important in trying to keep functioning as well as possible.

Offer more nurturing conversations

Help your friend do something everyday that helps them feel better. This is a time to be compassionate and to utilize stress reducing tools that help others to feel calm.

Help your friend/family member to keep a positive mental attitude

Stay aware of the messages that you are giving to someone else. If you notice you are sending self critical messages (e.g “You will never have a good job again”), it is important to observe this and to tell yourself to stop doing it. These thoughts are unhelpful and make others feel worse.

We can not always be in control of what happens to us – in fact, often how we handle what happens to us is the only thing we can control.

Remember that nothing ever stays the same, and tell the other person “this too shall pass.”

Help the individual to maintain a hopeful outlook rather than worrying about fear of the unknown.

This article by Keisha Blair first appeared on Aspire-Canada and was distributed by the Personal Finance Syndication Network.


The New American Dream Is A Better Reality

A new study of what “the American dream” means in 2015 has concluded…

Americans have moved away from a belief system dominated by financial achievements and have moved toward a desire for a healthy mental and physical life.

For financial experts like myself, that might seem like dour news. It’s not. I’m ecstatic about the findings in this report, called The American Dream: A State of Mind by an independent market research firm called Lifestory.

For almost three decades, I’ve consulted with all kinds of Americans who have one thing in common: They’re in financial trouble. The major reasons? Usually divorce, medical crisis, and job loss.

While these catastrophes can happen suddenly and unexpectedly, the other big cause of debt is completely avoidable: Simply spending too much money on too much stuff.

I see it all the time. Otherwise intelligent adults believe they can buy the “pursuit of happiness” mentioned in the Declaration of Independence. When they find out they can’t, they often need professional counseling to dig themselves out of credit card debt.

After the Great Recession, I of course was quite busy helping thousands of Americans who faced losing their savings, houses, and retirement nest eggs. However, if there was any silver lining at all, the Lifestory study says it’s this: This cataclysmic economic event caused people to question the value and purpose of acquiring goods and services derived from one’s financial well-being. Our research found a greater importance being placed upon mental and physical well-being.

If that means more Americans exercise their bodies than their wallets, that’s an excellent development. I just hope it doesn’t go wrong: Will Americans simply start over spending on health products instead of clothes and cars?

I also hope this new-found emphasis on quality of life — rather than quantity of possessions — doesn’t mean American start ignoring the basics of responsible money management. Debt.com has spent a lot of time to create a free, comprehensive Debt Solutions Center that offers proven advice in plain English. I’d love nothing more than to shut down Debt.com because no one needs advice for getting out of debt — because problem debt no longer exists. Until then, I hope The American Dream is still achievable for all Americans.

Howard Dvorkin is a CPA and chairman of Debt.com, an educational resource for those who want to conquer all forms of debt in their lives.

This article by Howard Dvorkin first appeared on Debt.com and was distributed by the Personal Finance Syndication Network.


6 Financial Lessons Worth Learning in Your 30s

financial lessonAnother personal finance blogger recently asked me to contribute to a post he was writing about money mistakes people in their 30s make and how to avoid them. I was happy to help with my best financial lesson.

As with most finance questions I come across, this one got me thinking about my own money mistakes and the financial lessons I wish I had taken full advantage of in my 30s. Here are six financial lessons, most of which I followed:

Buy real estate ASAP

Owning a home isn’t for everyone. Renting makes more sense if your job is mobile and you’re not sure where you’ll be living in a few years. Renting also makes sense if it’s a lot cheaper than owning a home.

My answer to the curious blogger about financial lessons was to buy real estate when you get the chance to. I don’t mean just when it fits into your finances and lifestyle — such as having a steady job and being married. My point, which I didn’t elaborate on in my quick response to him, was that buying real estate as an investment when you’re young can be a smart move many years later if you bought at a time when the real estate market was down.

You don’t necessarily have to live in the house you’re buying, though that does have good tax benefits.

For example: About 15 years ago a relative bought a townhouse in a nearby city. The townhouse was next to a major shopping center that would only get bigger in the coming years as more people moved to the area. Even back then, it was obvious to me that it was a growing area and that home prices would only go up. They did, and are now worth 10 times what they were 15 years ago.

I didn’t buy a townhome there then, but wish I had taken out a bank loan and got a second job, if needed, to buy one and then have tenants pay the mortgage from then on. That’s the first financial lesson I’d offer.

Save for investments

One thing I wish I did more of in my 30s financially was save more money for investing. Like everyone else, I’m busy working so I can pay the bills and hopefully have a little extra each month to enjoy dinner out or something, along with saving money for retirement and an emergency fund.

But if you can afford it in your 30s, it can help to save some fun money that you’re willing to put into an investment. The caveat is you have to be willing to lose that money. While that obviously isn’t the main objective, it’s a possibility to consider in this financial lesson.

You don’t want to look back years later and regret that you didn’t buy Apple stock at $10 a share when it was being beaten down and you knew it was going to bounce back. (Yes, this happened to me.)

While any amount is good, I’d recommend $5,000. It’s enough to hurt your bank account and enough to make you think hard about the potential investment. As you’ll see from other financial lessons I offer here, having money set aside for investments or something else is key to making the most of your finances in the long run. Continue reading 6 Financial Lessons Worth Learning in Your 30s

8 Times It Pays to Shell Out a Little More Cash

You may think that all financial experts will tell you to stop spending — but the truth is, sometimes it makes sense to spend. If the item will last longer, saves you time or money, improves your health, or can increase in value, it may make sense to invest in it. Check out some instances where spending can actually help you save.

1. Bulk Buying

It may seem obvious: If you buy more of something, it costs more. But, if you buy a lot of something, it may actually cost less when it seems like it costs more. Buying in bulk can mean you are paying less per item. It’s important to check the unit size of things you are purchasing. Where it often makes sense (household cleaners, toilet paper, toothpaste and other regular necessities), you can spend now to stock up at a lower per item cost and eliminate the need to buy later.

2. A Home

Buying a home is a very complicated decision — likely the biggest financial transaction you will make in your lifetime. The total cost of ownership in a home is a lot more than the list price so it’s important to find one that meets all your needs and can last as long as you will need it. It’s a good idea to consider whether it is better to buy or rent, considering your specific circumstances. Sometimes it might make sense to keep renting but in other situations, you might increase your net wealth more by buying. Homes can also be a great way to build equity and help fund your retirement down the road — it’s important that it’s not the only thing you are counting on, though.

3. Energy-Efficient Products

While it may mean shelling out more at the outset, energy-saving and reliable household appliances can often save you in the long run. They may last longer or run more efficiently so use less energy and therefore, cost you less on bills. Light bulbs, rechargeable batteries, power strips and some smaller purchases are easier to decide on, but for the bigger devices like washing machines, it’s a good idea to crunch some numbers including original price, how long you plan to own the item, possible resale value, and how much it will save from your energy costs.

4. Groceries

Aside from buying in large amounts, you may be able to stay healthier longer if you choose quality food over the cheap, processed stuff. In the end this can save you money on life insurance, health insurance and medical bills. To shop smartly, it’s a good idea to buy in-season foods and create a specific list of needs before you leave the house.

5. Experts

There are some services you simply can’t skimp on. If you are not able to complete a task on your own or if you don’t know enough to make an informed decision on an important topic, it’s important to hire someone who does. This can be true for plumbing or things like your taxes or drafting a will. In the long run, it can save you time and money to have an expert do it right.

6. Education

Going to college or university can be an investment in your future. Deciding if going to college is right for you can be a personal journey as well as a financial one. It’s a good idea to look at the upfront costs of getting a degree as well as the long term impact of job prospects and salary potential.

7. Modes of Transportation

When you need something for the sake of getting around and especially to work, buying the cheapest option isn’t necessarily the best idea. As in a home purchase, it’s important to factor in the total cost of ownership, which includes maintenance, repairs, fuel, storage, parking and any other associated costs.

8. Warranties & Repairs

It is always a good idea to take care of your property and possessions. Sometimes you have the opportunity to purchase extra protection. It’s important to do research and see if buying an extended warranty is worth it, especially the most expensive purchases you make. Sometimes, the cost of replacement is so high, it might be worth it to have the protection. If you think this is the case, be sure to read the fine print so you know exactly what is and isn’t covered. In a similar regard, it’s often a good idea to take the time and money to make repairs when essential so that your products can last longer and you won’t have to replace them as often.

Related Articles

This article originally appeared on Credit.com.

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