How to Live With Bad Credit

Posted in Oilfield Family Finances

How to Live With Bad Credit

You may not have landed a high-paying oilfield job yet, which means that you may be struggling financially. Well, take comfort in the fact that you’re not alone. Americans have been watching their own credit scores sink to new lows as the result of the recent recession which began in 2008 and that we’re only now beginning to recover from (meanwhile, fracking jobs are helping to lead many folks out of financial dire straits very quickly). If you’re one of the millions of folks who have had to endure an ever declining FICO score in recent years as you rebuild your finances, try the suggestions below. You may discover situations where your credit situation may not be a factor. Here are some tips on how to live with bad credit: Renting – housing is a big issue where oilfield jobs are the most plentiful. So, your credit report might come into play when you are looking for a place to rent. Find a house or condo that is owned by a private individual as opposed to a large company or leasing management firm. Many private individuals who own property, especially in today’s environment, will be more willing to forego pulling a credit report on a prospective renter as long as that renter can show proof of stable income for a number of months. The longer your proof of income “track record”, the better. It won’t hurt to clean yourself up and toss on some dress clothes – as though you are going on a job interview – when you meet with any potential landlords. You wouldn’t want to rent to a muscle-shirt-clad, greasy, overly tattooed (cover these up), unshaven possible drug addict either. Insurance – the marketers among us have us all pretty well brainwashed that we need a high credit score in order to get a fair deal on insurance rates. Perhaps, but an individual’s driving history has as much or more to do with his or her insurance rates than a FICO score. Worry less about your credit history and more about your number of traffic tickets (or lack thereof) when shopping for insurance. Fortunately, the web makes shopping for all kinds of insurance – especially car insurance – very easy. Once your credit score improves (it might be quicker than you think), then shop around again. The higher your score, the lower your premium. You might not get a lowered premium automatically, however – so it pays to play the insurance companies against each other on a regular basis. Employment – almost every job application now includes a paragraph somewhere indicating that there might be a credit check. Try not to get hung up on this. The “might” is the key word here. It’s possible to land a decent oilfield gig despite having a credit score that rivals a North Dakota mid-January temperature reading; after all,...

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Use Your Oilfield Paycheck on a New Car

Posted in Oilfield Family Finances

Use Your Oilfield Paycheck on a New Car

If you recently gained employment in the oilfields after being unemployed – or “underemployed” – for a long period, you probably need to upgrade some of your material goods. If you (or your family) are in need of a new set of wheels, then your big oilfield checks are going to come in handy. Now, some personal finance “gurus” preach endlessly that you should never buy a brand new car because the depreciation will eat your finances alive. But those same “experts” were likely never walking in your boots, so listen to them with a grain of salt. In my family’s case, we recently purchased a brand new compact SUV. Because of our situation, we wanted the 10 year/100k mile warranty for peace of mind (the “gurus” never seem to talk about warranties). You can easily spend as much at a car mechanic shop in the course of a year as you can on new car payments, so sometimes purchasing a new set of wheels makes sense, even when depreciation is factored in. We parted company with over $3k during the last two years or so to keep a Mazda on the road before finally kissing it goodbye. Which leads to another issue: before you buy a new car, make sure that you get top dollar for your old one. I shopped for a new car at four different Kia dealerships. I ended up buying from the dealership that gave me the least amount of pressure. The car dealerships who pressured me the most? I walked away from them. (Note to dealers: when are you guys going to change your strategies? Do you really have to go to the back room and speak to the mythical sales manager again?? Sheesh.) It is my experience that dealerships are in the business of selling financing first, and the car second. Cash purchases don’t necessarily appeal to salespeople like they might have back in, oh – the 1950’s. So the next time your granddad (or your goofy uncle Herbert) says: “Hey, young-un, just offer ’em cash! They’ll make ya a great deal!” You can confidently file this antiquated piece of advice in your mental “B.S.” file. Cash really doesn’t motivate salespeople like it once did. The dealership is all about getting you to make monthly payments. If you’re current jalopy is giving you problems, then here’s how to buy a new car: If there is anyway to sell your used car, do it. Try to avoid trading it in if possible. You will get hosed with a dealership trade-in; it’s pretty much unavoidable. One of the dealerships that I walked away from offered me $3k on a car that had a Blue Book value of over $10k in good condition. I get that dealerships have to turn a profit. But a $7k difference in the value of a used car vs. what...

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Moving to the Oilfield? Sell Your Used Car Quickly

Posted in Oilfield Family Finances

Moving to the Oilfield? Sell Your Used Car Quickly

Are you thinking about relocating to pursue a fracking job? There are a number of things to consider as you plan your move, not the least of which is: what to do with some of your largest assets. While many folks who plan a big move across town (or across the country) plan on taking their set of wheels, others may realize that a relocation might force the need for a new (or improved) personal vehicle. Recently, my own family had to sell one of our cars. The process wasn’t terribly painful or complicated, and well worth the extra two or three thousand dollars that we gained vs. trading the car in through a new car dealership or selling it to a CarMax outlet. Certainly, there is no shortage of information from “experts” on how to sell a car. However, I’m not an expert – but I have sold two used vehicles, successfully, in the last year. I am very satisfied with the speed of both sales as well as the money we gained. Below are eight things that I learned about selling used cars in both cases. Use caution, but don’t succumb to overblown “horror” news stories.  The news media might try to talk you out of selling your used vehicle outright. You’ve heard the drill: criminals and scam artists lurk within Craigslist, it’s dangerous to sell your vehicle to strangers, the process of transferring titles is complicated, you won’t have time to properly prep and detail your car, etc. Nonsense. Only a tiny minority of the people buying and selling via online sites are out to steal from you. Now, don’t get me wrong: the scumbags are out there in the digital world. However, they are few and far between. Unfortunately, the media loves to focus on bad news, especially web-related bad news. Criminals make news, but online criminals seem to make bigger news, and often. Consider using “paid” sites like eBay or AutoTrader.com to sell your car, as Craigslist does tend to attract a high number of scammers. And use some common sense. Which means… Follow some basic safety rules. When showing your used car, do so during the day and/or at a very busy public parking lot near lots of stores (and people). Besides, it’s easier to have someone find a Starbuck’s at a busy intersection than your own home address. Let someone else know where you are. If possible, get a family member or friend to accompany you in another vehicle while you and a prospective customer take a test drive. Never do business with anyone offering to buy your vehicle from a distance via a wire transfer or other form of digital payment. Only do business with folks who show up in person* to check out the car you’re selling, and are willing to pay with cash – period. By the way, if...

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How to Invest in Peer-to-Peer Lending

Posted in Oilfield Family Finances

How to Invest in Peer-to-Peer Lending

Once you’ve landed an oilfield job, you’ll probably end up working more overtime than you expected (or wanted) to! This may be a good problem to have, since not only will you be racking up big paychecks consisting of time-and-a-half pay, but (fortunately or unfortunately, depending on your point of view) you’ll have far less time to actually spend all that money that you’ll be making. So where to put all of those oilfield dollars? Do you really want to learn about investing in stocks, considering that many “big banks” and investing firms not only don’t have the interests of small investors at heart, but also screwed all of us over during the last few years and contributed to the recent “Great Recession”? And is it wise to hand over your money to firms such as JP Morgan Chase or Bank of America, who are borderline criminal enterprises? The answer: not if there are “do-it-yourself” investing options such as the recent phenomenon known as “peer-to-peer” lending. Peer-to-peer lending is quickly becoming a viable avenue for investors who seek alternatives to the stock market and other investments. At the same time, peer-to-peer lending gives borrowers lending sources outside of standard banking institutions. Let’s look at peer-to-peer lending in a nutshell: For Borrowers: Can borrow money without having to go to a traditional “big bank” (and isn’t it time that “big banks” received some competition?) May get better terms than what a bank can offer, certainly better terms than credit cards or predatory “cash advance” lenders (which should be avoided at all costs). May have a loan request for an unusual project or pursuit such as a business venture, marketing of an invention, upcoming wedding, or other “non-traditional” types of lending needs for which a traditional bank will not approve funds. For Investors: Quickly becoming a desirable alternative to stocks, certificates of deposit, bonds, or other traditional investing vehicles. Peer-to-peer sites like Lending Club expect potential borrowers to meet high standards. This reduces risk for investors. Investors can invest money quickly and retrieve it within a week or two – so funds are somewhat liquid. The two largest peer-to-peer lending sites are Lending Club and Prosper. Lending Club is one of the major “peer-to-peer” lending and investing sites on the web. This writer has personal experience with Lending Club, so that’s what we will discuss at length in this article. Lending Club investors can get started by opening an account with Lending Club, and setting up a checking account which is used to transfer funds to and from the Lending Club account. Everything is done online, and most folks can do everything they need to without support. However, support is available from Lending Club if the investor requires it via e-mail or toll-free phone. Once the Lending Club account is created and approved, the investor can transfer funds from his or...

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Boost Your Oilfield Finances by Reducing Credit

Posted in Oilfield Family Finances

Boost Your Oilfield Finances by Reducing Credit

Many years ago I was cut off from my last credit card. Thank God. At the time, of course, I was pretty upset about no longer having access to any credit. But like anyone with an addiction problem, I had to go cold turkey. Since I wasn’t going to leave the bar on my own – the “bartender” had to cut me off. I maintained credit card debt for nearly fifteen years by the time all my plastic was shut down a few years ago. Yep – pretty stupid. It didn’t take long for me to realize that not having credit cards was far less an inconvenience than I expected. After a month or two, I got used to paying cash for everything. Eventually, going “cash only” became sort of, well – hip. Everyone else uses plastic – but only a true non-conformist can flash greenbacks. Of course, these days most of us need at least one credit card in order to do things like order goods online or rent a car. So, while getting rid of all of your credit cards – especially if you’re far from home while working in the oilfield – isn’t the best strategy, it pays to reduce the number of cards you have. You can learn how to boost your oilfield finances by reducing your dependency on credit cards, too, by using these tips: Stash away a few hundred bucks in a savings or checking account that you can’t access very easily. If you can open an account at a credit union vs. a “big bank”, all the better. Skip getting an ATM card for this particular account. Yes, you want an ATM card for your primary checking account, but not this “backup” or emergency account. This way you have pretty liquid cash that you can’t get to in a matter of minutes (it might take hours or days, and this is a good thing). Forget the dollar amount, i.e. “you should have six months of living expenses”, “you should have at least $1,000”, “you should have enough to fly yourself first class to Istanbul and back five times”. Don’t get wrapped up in how much you need to stash right now. When you are just starting to wean yourself off of credit, numbers can become barriers which might prevent you from socking anything away. So just set aside a couple of hundred for now, if you can. That way, when your car breaks, an appliance conks out, or your significant other wants a date night (and it’s a deal breaker if she doesn’t get it), you’re covered. Put more funds in later when you can. Quit hanging out with your image-conscious friends (and while you’re at it, don’t date golddiggers, if you’re a single guy). Nothing will get you in debt faster than trying to keep up with the Joneses – and...

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Save More of Your Oilfield Paycheck

Posted in Oilfield Family Finances

Save More of Your Oilfield Paycheck

If you’re already living in or are considering a move to a fracking boomtown, then you know that prices in such communities are higher than elsewhere. You’ve probably considered all of the standard ways to help save your family a few bucks: clip coupons, go to movie matinees, buy in bulk, etc. Below we thought that we would add a few money-saving ideas on how to stretch your oilfield paycheck that you may not have tried yet: Don’t cut cable, just reduce it. While every money-saving “guru” harps on and on about cutting your cable or satellite services completely, your family’s entertainment options in a small town (where many oilfield jobs can be found) are more important. So consider reducing your cable service to “bare-bones” service. Most of the best programming, after all, is still provided by the major networks. Do you really need Animal Planet, the Oprah Channel, or the Bowling 24/7 Channels? Probably not. Indeed, cutting cable entirely may not be an option anyway, since many households now receive internet broadband service via cable providers. So here’s what you should do: give your cable company a call, and ask if they will provide you with your “local channels only”. They may offer this option, even though they won’t advertise it (it’s just not a big money maker for the cable companies). Then, simply keep your broadband internet service, which will allow you to use Hulu, Netflix, and good ‘ol YouTube to get your non- major network programming. Consider buying a new car. For years, many personal finance gurus have been telling all of us that buying a new car is “stupid”. Well, that’s debatable. Hanging on to a ten-year-old beater that needs several hundred bucks’ worth of repair work every couple of months isn’t exactly a genius move, either. If your old clunker suffers a blown engine or needs to have its transmission replaced, the repair costs will eclipse a year’s worth of new car payments quite easily. So, consider putting your money into a new ride, if your current car has seen better days. Many affordable new cars are being sold with 100,000 mile/10 year warranties, which will effectively remove the risk of having to shell out big bucks for repairs for years to come. Of course, you’ll have to weigh the pros and cons of used car repair costs vs. new car payments. But at some point, buying new makes sense. The financial “gurus” yammer on and on about how new car depreciation can trash your family’s net worth. But the gurus probably never had to shell out large amounts of cash for major repairs on older cars. In addition, you’ll get some piece of mind knowing your new car won’t “break” in the near future. Buy a Kindle. Most hipster gadgets like iPhones or Blueberries (ok, Blackberries – just seeing if you’re paying attention)...

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