Last week I talked about lessons from growing popcorn this summer. Same idea this week, just a little different context. One week per month I spend three afternoons at the state penitentiary here in Sioux Falls teaching credit to inmates who are about to be released. I certainly hope they are learning something from my time there. I can definitely tell you I am learning as well when I am there. To illustrate this, here is some new terms and phrases I have learned from my students at the pen:
Juice – When you borrow something or have someone else buy you something, the juice is what you pay them on top of the cost of the item in exchange for their help. Most of us would refer to this as interest.
Hustle – If you need some cash, you need to figure out your hustle. Sometimes legal, sometimes not so much, this is working whatever job you can for the sake of making money.
Rack – Something may cost you as much as two racks. You won’t be doing any carpentry to put up shelving. One rack translates to $1,000.
Not all terms are quite so innocent. Yesterday I had an inmate explain the meaning of “You want some of this work?” “Work” is not a reference to a job or task. If only. In this context someone would be asking you if you wanted any of the drugs that they have to offer.
Didn’t expect to be learning that today, did you?
I’m truly hoping none of you do anything to land yourselves in prison and in need of this knowledge. I do, however, have a point to all of this.
While we were all speaking English from the start, we were both learning a new language. I was learning some of the slang that comes from their world and they were learning the language of credit and finance. Even the concept of ‘refinance’ that so many of us use without much thought is a foreign concept to some of my students.
This isn’t the only time I have experienced incomprehensible English. In college I became friends with a couple of guys from Tennessee. During the first cold snap, one of them demanded we take time to walk to Target and get a toboggan. Born and raised in the upper Midwest, I knew it was cooler out, but we were nowhere near snow.
We went round and round about the necessity or lack thereof for a toboggan before we realized we were talking two different subjects. I knew a toboggan is something you sit on to slide down a snowy hill. Jim, on the other hand, knew a toboggan was a knit hat that would keep his head warmer when he was outside.
Same word – different English.
There is another part of our society that has its own form of English – the banking world. Teaching Homebuyer Education, we talk about the APR with FHA, VA, RD, SDHDA and Section 184. Say all that 3 times fast. While credit is something we are all involved with in some way, shape, or form, it is not a version of English that many are masters of.
So what, you are just out of luck and have to hope the jive is legit? You could go that way. Or you could be a little more proactive and protect your future. Here are some tips as you dive into the world of credit and finance:
DO NOT Be Embarrassed – Any banker that is worth their salt will be more than happy to explain as clearly as possible. In fact, federal laws dictate that lenders must explain information in a way that the consumer understands. All you need to do is let them know that you don’t understand. Ask questions. I guarantee you any banker that has been in the business for any length of time has already answered the same questions you want to ask. But if you don’t ask, they don’t know you need it explained that way. If for nothing other than their own liability, bankers want you to ask the questions so that they can explain in a form of English that you understand.
Take Time To Read – You have the right to read every document word for word before you sign it. You have the right to have an attorney interpret any document for you before you sign it. In all honesty, if you read every document word for word, it’s going to take a fair amount of time. But if you aren’t clear or have reservations about something, feel free to dig in and read.
Get Educated – There are all kinds of places that will help you learn the finance form of English. As mentioned, we at Center for Financial Resources talk about mortgage lending in our Homebuyer Express classes. We also teach everything from basic banking to credit cards. Many bankers will also take time to either teach one on one or present a class for clients that are interested in learning more. There are also many resources online that will help you find your way through English-yet-foreign terms and concepts. Whichever is your style, just get out and get educated.
Whether it is “Could you explain that”, “What exactly does this mean”, or a very puzzled “Huh?”, be sure you are understanding the English that bankers and lenders are speaking to you. The consequences can be quite significant.
For example, you can get a home loan for 3.5-4%. Credit cards are averaging 20-22%. Payday loans don’t usually advertise as having a percentage rate. Instead, there is just a ‘lending fee’. No-interest loans are a good deal, right? When you convert that lending fee to an APR as the home loan and credit cards are listed, payday loans often have an APR of 360-400%.
As the colloquialism says, “Knowledge is power.” Make sure you bestow yourself with some of that power. Get educated to make sure you are speaking the same English as the lenders offering you the contracts.
If you would like more information about credit education, feel free to contact the Center for Financial Resources. If you have already signed loan contracts in a foreign English and have felt the consequences, our counselors can help you find your way through them. All you need to do is ask.
And remember, the more juice there is, the more you need to hustle.
written by Breck Miller
images courtesy freedigitalphotos.net