Financial Fresh Start: Your Five-Step Plan for Adapting and Prospering in the New Economy

220 Pages·2013·1.5 MB·English

by  Shari Olefson P.A.

Advance Praise for Financial Fresh Start
“In Financial Fresh Start, Shari Olefson provides her readers with the
information necessary to thrive in the new American economy.”
—John DiBiase, National Association of Realtors, Government Affairs
Communications Director “Financial Fresh Start gives us invaluable advice
on how to recover from America’s mortgage and debt crisis.”
—Manny Munoz, Co-Host/Executive Producer, South Florida’s First News
AM 610 WIOD and 100.3 FM
“In an age of information overload, Financial Fresh Start cuts through the
clutter and is essential reading for everyone seeking to put their personal
finances on a strong foundation or help their small business to thrive. The recent
waves of financial regulations are easily explained and put in perspective so that
you don’t need a degree in economics to understand them.”
—Sean D. Foreman, Ph.D., Professor of Political Science, Barry University
“Shari Olefson has provided the consumer a practical how-to guide to navigating
today’s uncertain and highly regulated consumer financial climate.”
—William Sklar, Director, Institute on Real Property Law, and adjunct
professor, University of Miami School of Law; Co-Chair, Governor
Bush’s Homeowners Association Task Force “Financial Fresh Start
contains essential information every American needs to know.”
—John Bock, former offensive lineman, Miami Dolphins
“It can be overwhelming trying to keep up with all the financial and consumer
news that really matters. In her new book, Shari Olefson breaks down the
complicated subjects, focusing in on what you really need to know. These
nuggets come from a trusted expert with no agenda other than making America
even better for our next generation.”
—Roxanne Stein, news anchor-reporter, WPTV-TV NBC
FINANCIAL FRESH START
Your Five-Step Plan for Adapting and Prospering in the New Economy
SHARI OLEFSON, J.D., LLM
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Library of Congress Cataloging-in-Publication Data Olefson, Shari B., 1963-Financial fresh start : your
five-step plan for adapting and prospering in the new economy / Shari Olefson. J.D., LLM.
pages cm
Includes index.
ISBN 978-0-8144-3229-7 -- ISBN 0-8144-3229-8 1. Finance, Personal. 2. Recessions. I.Title.
HG179.O44 2013
332.024--dc23
2012044632
© 2013 Shari Olefson.
All rights reserved.
Printed in the United States of America.
This publication may not be reproduced, stored in a retrieval system, or transmitted in whole or in part, in
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Printing number
10 9 8 7 6 5 4 3 2 1
For Devon and Brooke,
my inspiration for all that matters most.
—xo Mom
Contents
Introduction
PART ONE: WHERE WE STAND
Chapter 1 Getting a Handle on Your Big Picture
PART TWO: THE FIVE STEPS
Chapter 2 Step One: Adapt Your Banking and Borrowing
Chapter 3 Step Two: Fix Your Credit and Debt
Chapter 4 Step Three: Protect Your Savings, Investments, and
Retirement
Chapter 5 Step Four: Decide If Homeownership Is Right for You
Chapter 6 Step Five: Spend Less and Earn More
PART THREE: MOVING FORWARD
Chapter 7 Getting the Help You Need
Chapter 8 Paying It Forward: Education, Training, and Your Future
Prosperity
Conclusion
Index
ACKNOWLEDGMENTS
W
riting a book, in some ways, feels similar to what I suspect infidelity might
feel like. Particularly as deadlines approach, weekends, evenings, and virtually
every spare moment in between are spent “cheating” on your spouse and kids to
be with your book, essentially putting the good—the value you hope to add for
readers—above your own family’s needs. And so, now that Financial Fresh
Start is complete, it seems appropriate—okay, downright necessary—to say
“thank you” to my entire household, including our dog Zoe, for your patience
with dirty laundry, the litany of other chores that went undone, take-out dinners
instead of home-cooked meals, and for tolerating gazillions of early mornings
and late nights at the computer. Naturally it takes more than even the most
wonderful, amazingly supportive family in the world to bring a book to life.
Enter Bob Nirkind and Chris Murray, professionals, mentors, and confidants
extraordinaire. These guys epitomize passion, drive, and untiring support--on
occasion reminiscent of a strict high school principal, and they completed the
proverbial circle, helping to create what I believe you will find to be a truly
worthwhile book. Finally, there have and continue to be many people working
hard every day to help insure that America and American’s just like you get their
fair shot at an intelligent and successful financial fresh start. Please check out the
online acknowledgments at www.askshario.com/acknowledgments so we can be
sure these folks get the credit they well deserve.
INTRODUCTION
A
very simple question: If you think back to ten or twenty years ago, how
common was it for you to know or regularly hear about folks in foreclosure, or
folks deciding—strategically—not to pay back their debts? What about cities
and towns going bankrupt, or huge financial institutions and even entire
countries being bailed out?
What about now?
What Does It Mean?
As the mother of two teenagers, I often wonder how commonplace these sorts of
things will be ten years from now and exactly what that will mean, not only for
our personal finances, but for our kids and the legacy and country we leave
behind for them. Is America still the greatest nation in the world, or does it just
look that way because other countries are, at least for the time being, worse off?
My own childhood includes memories of my grandfather, a New York City
fireman, sitting at his desk every Saturday morning and writing out checks by
hand to pay his bills. Maybe you have memories like that of your own parents or
grandparents. Everybody used good old-fashioned cash, and so people were
acutely aware of how much money they did or did not have. And, of course, it
goes without saying that they would never dream of spending money they didn’t
have. Back then, alternatives beyond accepting responsibility and consequences
for your own financial decisions didn’t even occur to folks, and they certainly
would never have expected to be given the opportunity for a full-fledged
financial fresh start. In fact, I still remember the day my grandfather made the
final payment on his home loan. He and Nana invited the neighbors over for a
BBQ and literally burned their old tattered mortgage papers. America was built
by folks, like my grandparents and perhaps yours, who believed in their own
power to make their lives better.
Fast-Forward to Today
Today we talk about how complicated banking, borrowing, investing, and
finance have become. Yet the truth is that some of the same simple values that
kept our grandparents out of trouble still apply today and probably always will.
Timeless golden rules such as “Don’t sign anything without reading it first,” “Be
careful who you trust,” and “If it sounds too good to be true it probably is” could
have saved a whole lot of folks, banks, and even entire nations a whole lot of
hassle these last few years. While we learned important lessons by watching our
own parents or grandparents literally count their pennies, today’s kids spend
money on iTunes purchases with a single click. And millions of American
children will sit at their dining room tables tonight, listening to their parents talk
about their homes and their banks and whether they can (or want to) pay their
obligations. These are the kind of intangible impressions we are instead making
on our own “next generation.”
In fact, if you fast-forward from my grandfather’s day to today, for some
folks it feels a little bit like financial Armageddon. As an attorney on the front
line of the real estate bubble and the bailouts and Great Recession that followed,
I can tell you that all of those detailed clauses in all of those legal documents that
folks, including you, have signed over the years—you know, the ones that used
to be explained away with the naïve assurance, “Don’t worry about that clause; it
talks about economic circumstances that will never really happen”—have indeed
happened.
Thanks to the bubble, bailouts, and Great Recession, and the decades of
lesser-known unsustainable economic trends that preceded those historic events,
folks across all demographics are trying to regain their financial footing in an
America that now has less opportunity for upward mobility than France,
Germany, Sweden, Canada, Finland, Norway, Denmark, and a host of other
nations. Those born into America’s middle class today are statistically more
likely to move down the economic ladder than up! The life-changing impact on
personal wealth and sociofinancial safety nets is undeniable. And here’s the
kicker: Unlike our grandparents, who had very little or nothing to lose, many of
us were born into the middle class and now actually have a lot to lose. The fact
is, our middle-class clock is already ticking. Where home equity was once the