Helping Your Teen be Financially Fit

If you have a typical teenager or young adult in your house…they probably think they know all that they need to know to be independent. But do they know all they need to know to manage their finances successfully? Chances are they do not since the fastest growing group of individuals filing for bankruptcy is 18-25 year olds and Maryland colleges are having more students drop out due to credit card debt than failing grades.

Here are some tips you should teach your teen:

1) How to create a budget and stick to it—Discuss needs vs. wants

2) The importance of saving—start young—and include savings in their budget

3) Beware of the numerous credit card offers they will receive. While building credit is an important step in managing their finances—they need to do their research before choosing a credit card—they need to know the interest rate, how long that rate will last, any fees associated with the card and most importantly they need to know that carrying a balance on a credit card can be a dangerous way to spend their money—it will take years to pay off this debt if they only pay the minimum balance due—and the amount repaid will well exceed the amount originally spent.

4) Beware of anyone asking for personal information—whether by phone or email—ID Theft is on the rise and we, as consumers, need to stop giving out our personal information

5) Credit reports are important and need to be checked at least once a year. If there are errors on it, take the time to dispute it and get the report corrected.

6) Be a smart consumer by doing research before buying, avoid impulse buying, comparison shop, keep documentation and read everything before signing on the dotted line.

By helping your teen be a smart consumer and manage their money wisely, you will help them on the road to be financially independent—keep in mind they may not thank you right away for this but when they are able to buy their own house later in life, know that you did the right thing.

For more information check: www.mdfinancialskills.org
www.mymoney.gov

Hiring An Unlicensed Contractor?

I worked for Montgomery County’s Office of Consumer Protection for 19 years and it never ceased to amaze me that consumers consistently fell prey to unlicensed home improvement contractors. You would think that after the many consumer education campaigns we had to alert consumers about the dangers of contracting with an unlicensed contractor followed by the enforcement action taken against those contractors we found, that the problem would decrease. Never.

Having just finished a major renovation, I understand those consumers who find the amount of time it takes to research and hire a reputable, licensed contractor, who is also reasonably priced, daunting. It certainly is quicker and easier to use that person who knocked on your door. It’s even easier to use that unlicensed contractor who your neighbor referred to you. What it comes down to is: what amount of risk are you comfortable living with to avoid the time-consuming homework needed to hire that reputable, licensed contractor, who is also reasonably priced?

RISKS INVOLVED IN HIRING UNLICENSED CONTRACTOR

• Contractor gets a deposit and never returns (best case scenario)
• Contractor gets a deposit, starts work, opens your house to the elements and never returns
• Contractor gets a deposit, does the work, gets paid in full, but the work won’t pass inspection and contractor can’t be found
• Contractor does work, gets paid and then his “subs” sue you because he didn’t pay them
• Contractor or subs get hurt on your property and you find out that contractor does not have insurance. You get sued.
• Contractor gets deposit and key to your home to do work while you are at your job.
  
• Contractor steals jewelry, checkbook, cash among other items in your home and can’t be found.

These are just some of the complaints made by consumers who used unlicensed contractors. Years ago, your major risk was either poor workmanship or theft of your money. In the past few years there has been an alarming trend in that these unlicensed contractors have prior criminal convictions for theft, distribution of drugs, robbery and assault. Not exactly the kind of person you want having access to your home.

Maryland Law, as is similar in many other jurisdictions, requires home improvement contractors to be licensed by the Maryland Home Improvement Commission (MHIC). This licensing requirement protects consumers by ensuring that contractors: have been screened for criminal activity; have financial solvency; have two years trade experience; and have passed a test on the home improvement law and general business competency. In addition, licensed contractors are required to make a bi-annual payment to the Home Improvement Guaranty Fund. This is one of the most important reasons consumers should only do business with a licensed home improvement contractor. If a consumer has a dispute with a licensed contractor and the Commission finds in the consumer’s favor, the consumer can be reimbursed for their losses up to $15,000.

Choosing the right contractor will make or break your home improvement project. Carefully consider your options and your risk-taking threshold before hiring any contractor. For more tips on choosing a contractor:

FTC: http://www.ftc.gov/bcp/edu/pubs/consumer/products/pro20.shtm

This posting is dedicated to Investigator John Creel of the Montgomery County Office of Consumer Protection--who is a pit bull at investigating and prosecuting unlicensed contractors.

Kid's Fall Safety Tips

Kids are back in school and while they may think the hardest part about school is the tests—their parents need to know some important safety guidelines that will get their children back to school safely this fall.