1. Narrow your objectives.

You probably won’t be able to achieve every financial goal you’ve ever dreamed of. So identify your goals clearly and why they matter to you, and decide which are most important. By concentrating your efforts, you have a better chance of achieving what matters most.

2. Focus first on the goals that matter.

To accomplish primary goals, you will often need to put desirable but less important ones on the back burner.

3. Be prepared for conflicts.

Even worthy goals often conflict with one another. When faced with such a conflict, you should ask yourself questions like: Will one of the conflicting goals benefit more people than the other? Which goal will cause the greater harm if it is deferred?

4. Put time on your side.

The most important ally you have in reaching your goals is time. Money stashed in interest-earning savings accounts or invested in stocks and bonds grows and compounds. The more time you have, the more chance you have of success. Your age is a big factor – younger people (who have more time to build their nest egg) can invest differently than older ones. Generally, younger people can take greater risks than older people, given their longer investment horizon.

5. Choose carefully.

In drawing up your list of goals, you should look for things that will help you feel financially secure, happy or fulfilled. Some of the items that wind up on such lists include building an emergency fund, getting out of debt and paying kids’ tuitions. Once you have your list together, you need to rank the items in order of importance.

6. Include family members.

If you have a spouse or significant other, make sure that person is part of the goal-setting process. Children, too, should have some say in goals that affect them.

7. Start now.

The longer you wait to identify and begin working toward your goals, the more difficulty you’ll have reaching them. And the longer you wait, the longer you postpone the advantage of compounding your money.

8. Sweat the big stuff.

Once you have prioritized your list of goals, keep your spending on course. Whenever you make a large payment for anything, ask yourself: “Is this taking me nearer to my primary goals – or leading me further away from them?” If a big expense doesn’t get you closer to your goals, try to defer or reduce it. If taking a grand cruise steals money from your kids’ college fund, maybe you should settle for a weekend getaway.

9. Don’t sweat the small stuff.

Although this lesson encourages you to focus on big-ticket, long-range plans, most of life is lived in the here-and-now and most of what you spend will continue to be for daily expenses – including many that are simply for fun. That’s OK – so long as your long-range needs are taken into consideration.

10. Be prepared for change.

Your needs and desires will change as you age, so you should probably reexamine your priorities at least every five years.

The above post is from the CNN Money series called “Money 101.” See the rest of lesson 1 here.

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Just imagine. If you could wave a magic wand and turn that $25,000 of credit card debt into $12,500 or even as little as $9,000, wouldn’t that make a HUGE difference to your financial future? You bet it would! Most people are skeptical that this approach is possible. But if you have a professional debt negotiator on your team, the odds are very good that he or she can cut your debt in HALF or less.

How is this possible? It’s very simple, actually. Put yourself in the shoes of a manager of a collection department for a major credit card bank. You know that bankruptcies are at an all-time high, that consumers file bankruptcy at the drop of a hat these days, and that the chances of collecting any money gets worse as the debt ages. You have the opportunity to close your books on a delinquent account by collecting 50 pennies for every dollar owed by the debtor, or take a chance on never collecting a single penny by trying to hold out for the full account value. You also realize that once the debt leaves your bank (usually after six months or so), it will go to a third-party collection agency. The agency will take at least 15%-20% commission right off the top of whatever they collect, and they are unlikely to collect more than 70% of the debt even with the most aggressive tactics. So you’ll probably never retrieve much more than half the money anyway. When you look at it this way, collecting 50% now doesn’t seem like such a bad prospect.

Now, the way we’ve described it above, it sounds like a piece of cake. You might be thinking, “OK, I’ll get on the phone and do this myself.” What will happen? You’ll reach the “customer assistance team” described above, and the representative will inform you that other banks may settle for 50%, but their bank never settles for less than 85%, under any circumstances. But, of course, they do have that wonderful hardship program for you.

After you’ve called five or six banks and received the same treatment, you’ll probably end up with the idea that debt negotiation doesn’t work. The problem is that the banks will rarely take a debtor seriously. Unfortunately, they simply don’t believe you and they think your hardship story is phony. The banks are quite prepared for the amateur do it yourself negotiator. They have the telephone scripts all set up so that by the time the conversation is over, the caller feels guilty about the money owed, and their lame hardship plan sounds like a great deal after all.

We’re professionals, but if one of us ever got into a financial pickle, we’d never try to negotiate our own debts. Instead, we’d hire one of our colleagues to do the job for us. We can’t emphasize this enough. Just having a third-party professional on your team makes all the difference in the world. There is something almost magical about this simple approach. Once the banks realize that they are talking to a professional, someone who knows the rules and regulations, and then they quickly change their tune. A negotiator will obtain better results than you could ever obtain on your own, simply because all of the bank’s tactics are stymied by the fact that they can’t talk directly to you. They can’t apply psychological pressure to you, since your representative filters this out.

Besides, there’s no shame in seeking help. Look at it this way: the banks pull out all the big guns when you fall behind. They have an army of collectors ready to pressure you with carefully scripted techniques. They have collection agencies and attorneys waiting in the wings to go after you full throttle. Doesn’t it make sense to level the playing field? Doesn’t it make sense to concentrate on improving your finances and let someone else deal with the aggravation of the incessant phone calls that start flooding in once you get behind?

Let’s go over the negotiation process in a little more detail. When you become a client of a professional debt negotiator, he or she will impose two simple rules for you to follow:

Rule No. 1: Don’t talk to your creditors.

Rule No. 2: Save as much money as possible.

Do you think you can handle those rules? They’re tough, aren’t they? Let us explain exactly why these rules are so important.

Rule No. 1 is important because only one person can negotiate your debts for you. If you only allow the negotiator to handle some of the phone calls while you make other calls yourself, the odds are high that you will say something that is not in your best interests, thereby undermining your negotiator.

You’ve seen the cop shows on TV, where they always read a suspect his or her rights while they’re being arrested. “You have the right to remain silent,” and so forth. Well, in debt collection, there is a similar rule. A debt collector is supposed to tell you the following: “This is an attempt to collect a debt. Any information you give us will be used for that purpose.”

Your debt negotiator knows exactly what information to disclose, when to disclose it, and when to withhold information. The average person, on the other hand, has no idea what to say in that particular situation. We tend to respect authority. Collectors have a lot of nerve and present themselves authoritatively. They ask you where you work, how much you make, how much you pay in rent every month, and so on. The answers, quite frankly, are none of their business. But most people feel compelled to answer, in a misguided attempt to establish rapport with the collector.

So, the first rule is KEEP QUIET, and let your negotiator do the talking.

Rule No. 2 is even more basic. Successful negotiation of your debts will require a reasonable compromise with your creditors. It’s important that you save as much money as possible each month for your negotiator to work with.

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Harassing phone calls from creditors is a concern for many individuals facing unmanageable debt. The debt collection industry is big business. In fact, the Association of Credit and Collection Professionals (ACA) reported that roughly 6,500 collection agencies in the U.S. recovered more than $39 billion in debt in 2005 alone. Therefore it’s no wonder that these agencies often use aggressive tactics to get their share of the pie.

Strict federal and state regulations regarding debt collection practices, however, offer consumers protection from harassing collectors and have severe consequences for companies operating in an improper manner. By educating yourself on a few of the regulations binding these creditors and collectors, you can put an end to the harassment.

The Federal Trade Commission’s Fair Debt Collection Practices Act applies to third-party collection (not first party creditors) and was designed to protect consumers from devious and aggressive collection practices. Specifically, the Act states that collectors: 

1. May only contact you between 8 a.m. and 9 p.m.
2. Cannot use cell phone numbers for collection calls
3. May not contact you at work if you tell them your employer disapproves
4. May only contact you once per day
5. Must cease and desist future contact once you notify them in writing you do not want anymore calls (they may, however, send you one final notice regarding the next course of action)
6. Additionally, many collection agencies have been known to make subtle (or not so subtle) threats regarding garnishment of wages or even imprisonment for failure to pay debts. Section 807 of the Fair Debt Collection Practices Act “prohibits falsely representing or implying to the consumer that nonpayment will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or wages of any person”.

What does this mean for you? It means that you have rights too. If you are receiving harassing calls, begin by telling the caller you believe they are harassing you and that you are aware of your rights under the Fair Debt Collection Practices Act. Next, send a formal letter to the collector saying that you are aware of the debt, are working to resolve it, and do not want to receive any additional calls (keeping in mind that the collector is allowed to send one final notice regarding their next course of action). If the harassment continues, notify the Federal Trade Commission or your state’s Attorney General’s office.

While debt settlement professionals cannot reduce harassing phone calls, many firms encourage their clients to refer all calls and contact to them for resolution. In some cases, the client is encouraged to send the collector a change of address and phone number listing their debt settlement professional’s contact information. These firms will also work with the collectors to come up with a solution to settle your debt and end the harassment for good.

Now that you have the knowledge you need to fight back, you can enjoy your dinner in peace and stop screening your calls — unless of course it’s your mother in-law…

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The Situation

In the aftermath of a divorce, Andrew A. from Florida found himself buried under a mountain of debt. His ex-wife had decided not to pay a series of debts agreed upon in the divorce settlement that were tied to Andrew’s name. By the time Andrew realized what was happening, his credit score had fallen almost 200 points and he was struggling to get caught up.

The Solution

Andrew searched the internet for a solution to his growing debt problems, and decided to contact DMB Financial for a free consultation. Andrew’s personal debt counselor recommended a strategy that would fit within Andrew’s budget and leave him debt free in as little as 36 months.

The Result

DMB Financial quickly began to correct Andrew’s debt problems by initially settling his largest account and negotiating a favorable agreement with another. At the completion of his debt resolution program, Andrew had saved more than $14,000 representing 49 percent of his total debt.*

*Individual results may vary based on ability to save funds, amount of debt, willingness of creditors to negotiate, and the successful completion of all program terms. Program does not assume or pay any debts, nor provide legal or tax advice. Prudence should always be taken by consumers when reviewing contracts and disclosure materials. DMB’s services not available in all states.

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DMB Financial, a leading provider of consumer debt resolution services, announces the selection of Booway Balhaajav as Chief Executive Officer. Mr. Balhaajav brings nearly 20 years of international diplomacy and business leadership experience to DMB Financial, and will lead the company’s efforts to become the premier client-focused debt resolution company in the United States.

Balhaajav comes to DMB Financial with 13 years of experience in business leadership, entrepreneurship, and financial analysis in the management consulting and financial services industries, and 6 years experience in international diplomacy, Mr. Balhaajav is uniquely qualified to assist DMB Financial in servicing their broad portfolio of debt resolution clients.

Prior to joining DMB Financial, Mr. Balhaajav served as the Founder and Managing Director of Triumph Partners, and Principal Consultant at Cayenne Consulting. He holds a Masters degree in Linguistics from Moscow State University as well as an MBA from Harvard Business School.

“I am thrilled to be joining DMB, particularly at this time, as the debt resolution industry is just beginning to take a defined shape.” says Mr. Balhaajav. “We have an opportunity to set new standards for the industry, and ethical debt settlement practices are greatly needed in today’s economic climate to maximize benefits for debt settlement clients.” 

##

About DMB Financial

DMB Financial negotiates debt with credit card companies for significant savings to the consumer. They’ve saved 11,000 clients over $87 million in credit card debt and counting. DMB Financial is the industry champion of a “success fee” based business model, where the company only gains when and if it delivers real savings to the consumer.

View the Full Press Release here:

• File Attachment: DMB Names New CEO PR 052109.pdf (32 KB)

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I’ve also been very fortunate in my first few weeks to engage directly with the New York Attorney General’s investigation into debt settlement companies. Having helped compile the DMB Financial performance statistics, I am incredibly proud of the very real savings percentages, graduation rates, and successes that DMB Financial has had in New York. This exercise really has been a blessing in disguise.

Please see the press release below or in the attached file:

• File Attachment: DMB New VP of Marketing PR 052109.pdf (32 KB)

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The good news is that you CAN successfully manage your finances and it doesn’t’ t have to take a great deal of time, especially if you get into the habit of taking care of a few money matters on a regular basis. We hope that you’ll find the following suggestions helpful as you continue on your journey to a more financially secure and manageable life style.

Credit Cards

• To avoid late payment fees and possible interest rate increases on your credit cards, make sure you send in your payment a week to ten days before the statement due date. Late payments on one card can increase fees and interest rates on other cards.
• You can avoid interest charges, which may be considerable, by paying off your entire bill each month. If you are unable to pay off a large balance, pay as much as you can. Try to shift the remaining balance to a credit card with a lower annual percentage rate (APR). You can find listings of credit card plans, rates, and terms on the Internet, in personal finance magazines, and in newspapers.
• Be advised that credit cards with rebates, cash back, travel awards, and other such perks may carry higher rates or fees.

Checking Accounts and Debit Cards

• You can save more than $100 a year in fees by selecting a free checking account or an account with no minimum balance requirement. Request a complete list of fees that are charged on these accounts, including ATM and debit card fees.
• See if you can get Free or Lower Cost Checking through direct deposit or agreeing to ATM only use. Be aware of charges for using an ATM not associated with your financial institution.

Life Insurance

• If you want life insurance protection only, and not a savings or investment product, buy a Term-Life insurance policy.
• If you want to buy a Whole-Life, Universal-Life, or other cash value policy, plan to hold it for at least 15 years. Canceling these policies after only a few years can more than double your life insurance premiums/costs.
• Check the National Association of Insurance Commissioners website (www.naic.org/cis ) or your local library for information on the financial soundness of insurance companies.

Auto Loans

• To save as much as several thousand dollars in finance charges, pay for your car in cash (if possible) or make a large down payment, which will help to shorten the term of the loan. A large down payment may also result in a lower interest rate.
• Make certain to get a rate quote (or pre-approved loan) from your bank or credit union before seeking dealer financing. You can realize significant savings in finance charges by shopping for the cheapest loan.
• Make certain to compare the dollar difference (monthly payments) between low-rate financing and a lower sale price. Remember that getting zero or low-rate financing from a dealer may prevent you from becoming eligible for the rebate.

Auto Insurance

• You can easily save several hundred dollars a year by purchasing auto insurance from a licensed, low-price insurer or independent agent. Call your state insurance department for a publication showing typical prices charged by different companies. Then call at least four of the lowest-priced, licensed insurers to learn what they would charge you for the same coverage.
• Consider raising your deductibles on collision and comprehensive coverage to at least $500. Or, if you have an older car, consider dropping this coverage altogether. This can save you hundreds of dollars on insurance premiums. Your agent or insurer can explain the pros and cons.
• If you do change policies or insurers/agents, make certain that your new policy is in effect before dropping your old one.

Prescription Drugs

• Since brand name drugs are usually much more expensive than their generic equivalents, ask your physician and pharmacist if a less expensive generic or an over the counter alternative is available.
• Since pharmacies may charge widely different prices for the same medicine, call several. When taking a drug for extended periods, also consider calling mail-order pharmacies, which often charge lower prices. (Check your Yellow Pages or search the web for Mail Order Pharmacies)

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