Just About Everything

Here are some steps you can do to educate your children since they are teens, to be more disciplined and responsible in managing their finances:

1. Quota system
Encourage the child to make financial plans with the budget expenditure every month. Use the envelope system to store and separate funds for each category of expenditure. Thus, the child will be easier to control.

Do not allow children to bring an ATM card or credit card when outside the home. Let him manage the money you give each month with the quota-based system.

2. Part time work
Encourage children to work part time so they get a lesson about the difficulty of getting money, so they can better appreciate the money more wisely and manage them.

3. Contribution
If your teenager wants new gadgets, motorcycles, or cars to support their activities, do not be too easy to grant his request. Give your child’s condition that has contributed, for example, save some money to buy stuffs or responsible for financing the maintenance in the future.

4. Savings account
Open a savings account on behalf of children from an early age. Give him the journal to record their financial and let him deposit the funds into the savings of the rest of the monthly allowance.

5. Credit card
When your teenager has learned how to prepare budgets and manage finances properly, prepare him to be responsible for holding a credit card. Explain to children about the pros and cons of plastic money. Teach your child to pay off bills on time every month, great interest rates, and the consequences of what he would face if late paying credit card bills.

Whether you are applying directly to your lender or claiming eligibility under HAMP, the practical decisions are all to be made by the lender. You do whatever you can to set out your side of the proposed bargain with a clear set of accounts showing money in and money out. The need is to demonstrate a guaranteed slice of your monthly income that can be devoted to paying a reduced installment. So list everything you are obliged to pay to keep body and soul together, from food to utilities to transport to health insurance, and so on. Without the modification, this is going to be negative, i.e. on paper, you are spending more than you earn. The “trick” is to show enough to cover a modified installment, perhaps with a tiny slice of money left over for the inevitable emergencies. If the modified installment you prove can be paid is enough to keep the lender less unhappy, the modification will be agreed on a trial basis. But if the minimum installment the lender requires will leave you in negative territory, your offer to modify will be rejected. Why reject a good faith offer? Because people who have to juggle monthly payments to fit into the available money almost always default again. Your income must cover all outgoings.
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