Credit/Debt Recovery

"Unbanked"

When we included a section in Repair Your Credit And Knock Out Your Debt on the unbanked, our editors protested, and later it kept appearing in the index as "unbanking" rather than "unbanked." It wasn't a real word yet, and we had to fight to get it in print.

Looks like the word, and the concept, has finally made it to the mainstream. Here's the Clinton-Schwartzenegger op-ed from the Wall Street Journal that discusses the issue.

The point isn't to pick on pawn shops, payday lenders, or institutions that sell money orders, but to educate consumers about how to become banked or regain their banking privileges if they've been lost. Unfortunately, the Patriot Act makes Chexsystems all but mandatory, but thankfully there's Get Checking for people who've been burned by Chexsystems. I spent a lot of time begging banks and credit unions to participate in the Get Checking program in our area, and mostly getting rejected. Maybe with the new Slick Willie Economic Opportunity Initiative, it'll be easier to get banks and credit unions to give Get Checking graduates a second chance at a checking account.

Insurance Information Institute

Having adequate insurance coverage is an important part of financial freedom. Especially if you do any kind of physical labor for a living, long-term disability insurance is an absolute must.

I'm also a big believer in renter's insurance: I learned that one the hard way over the years. I was always too broke to afford it, but when my stuff got stolen, it caused a lot more damage to my finances than renter's insurance would have. (And wouldn't you know it, I always managed to scrape together enough money to replace my stolen stuff. I could have figured out how to pay for renter's insurance if I weren't being an idiot.)

However, there is a flip side to insurance coverage. Your homeowner's policy almost certainly makes you get too much coverage. We tell clients to review their coverage and adjust it accordingly; I'm sure no one ever follows up on that. But the Insurance Information Institute has a tool that can help.

They host Know Your Stuff, a free home inventory program that you can download and use to catalog all of your belongings. This can really come in handy if you have an insurance claim. It also showed me that I'm paying for twice as much coverage as I need on my belongings. I'm sure when I talk to my insurance company and get that adjusted it won't change my insurance payments by much, but it'll be worth doing even if it's a tiny amount.

The III also has page on credit with some good information. Your credit really matters when it comes to your insurance. You may have gotten a letter from your insurer saying you weren't getting the best rate because of your credit history. I got one of those recently, and my credit score is reasonably high.

The bottom line is, you're probably paying too much for insurance, either because of something on your credit report or you're paying for too much coverage. Completing a home inventory is one way to make sure your insurance coverage is appropriate. It's not a trivial project (I've been working on a home inventory in my spare time for weeks now) but it's one worth doing.

Larry Winget's "You're Broke Because You Want To Be"

Larry Winget's new book, You're Broke Because You Want To Be, has turned me from a casual follower of his work into an outright fan. Winget's serious about helping people overcome their financial problems. He's tough, but not insulting or aggressive. I find him a welcome voice in the field.

Content-wise, the book is a quick read at 200 pages. I'm finding that it's desirable for such books to be accessible, because it makes it easier to re-read them periodically. This is kind of book you could pick up once a year, or whenever you need renewed inspiration, and read it in a weekend.

This book isn't chock-full of budgeting strategies and worksheets. Winget's job is to get you off your butt and motivated to change your situation. He offers a few worksheets and exercises, but the real meat is in the ideas communicated. He offers a great attitude adjustment toward wealth and money, and his advice on raising your kids to be money-smart is spot on.

Where Winget's book initially wins me over is when he advises, early in the book, to ditch your cable TV. He re-iterates that later in the book. This is not the kind of advice you'd normally get from a cable TV star. He seals the deal for me further in when he recommends other self-help books (though not mine, unfortunately).

Other personal finance gurus will try to sell you $150 worth of materials, or a $90-per year membership in their budgeting system. Larry Winget directs you to a dozen other books (10 of which aren't by him) as further help toward getting on the right course. He won't make a dime off of those other books sales, but he's sending to those other authors because they have something valuable to offer. That's someone who is on the level.

I'm sure Winget makes a lot of money from his personal speaking engagements, the TV show, and book deals. He doesn't also need to charge individuals (people who are ostensibly having money problems) hundreds of dollars to join his club. He's also set up a website with a free "Five Financial Lessons" video and budget sheet for those who purchase the book.

The bottom line is, this guy's legit. He's not trying to be cuddly and lovable, he's trying to wake you up and get you to stop choosing to be broke. And he manages to do it without ever calling you "stupid."

Visit his website, LarryWinget.com this week and check out everything he has to offer.