April 1997 Issue of AFCPE Newsletter

April 1997 Issue of AFCPE Newsletter

AFCPE Newsletter. Volume 15, Number 2, April 1997

Copyright, 1997 by the American Association for Financial Counseling and Planning Education

Table of Contents
In This Issue

Quick Loans, Credit and Wealth

President’s Message

Personal Finance Employee
Education Network Being Formed

Call for Extension Presenters -
Extension’s Role in Welfare Reform

How Do We Counsel?

1997 Annual Conference

Future Annual Conferences

Journal of Financial Counseling
and Planning: Vol. 7, 1996

Awards Nominations-AFCPE:

Due September 1

Call for AFCPE Distinguished

Fellow Nominations


1998 Board of Directors-AFCPE
Nominations Due June 16


Bulletin Board

Institute for Personal Finance

Quick Loans, Credit, and Wealth

Stephen D. Hannan, Administrator, Office of Consumer Affairs,

Howard County, Maryland


“Quick Loans” may be
the industry’s preferred method
of consumers acquiring debt, I
believe that the effect of quick
loans on today’s consumers is
similar to what President
Thomas Jefferson intended the
effect of debt would be on
Native Americans.

“Our system is to live in
perpetual peace with the
Indians… When they withdraw
themselves to the culture of a
small piece of land, they will
perceive how useless to them
are the extensive forests and
will be willing to pare them off
in exchange for necessaries for
their farms and families. To
promote this, we shall push our
trading houses, and be glad to
see the good and influential
individuals among them in debt,
because we observe then these
debts go beyond what the
individual can pay, they become
willing to lop them off by a
cession of lands…”

President Thomas Jefferson,
excerpt from a letter written to
Indiana Territory Governor
William Henry Harrison.

Who says quick loans are a
new phenomenon? Obviously
President Jefferson knew the
power of debt, and the appeal of
the quick loan.

Today’s “Quick Loans” are
repaid with money rather than
land, and in particular it is the
monies owed due to interest
compounding that is fueling the
economic boom in the
consumer credit industry. The
debt laden CONSUMER is the
golden goose who is laying the
golden egg. Here are some


This type of loan occurs when
you are offered an additional
discount on merchandise in
exchange for opening an in-house charge account. It is
called true identity because all
you need is two forms of
identification to open the
account. For the consumer who
has the ability to pay off the
balance at the end of the month
this loan is a good deal, but for
the consumer who only makes
periodic payments, the amount
of the interest may exceed the


This loan is offered primarily
by tax preparers and it allows
the consumer to immediately
receive a portion of their
projected tax refund. The
drawbacks are obvious. First,
they have taken on another loan
obligation, perhaps without
realizing it, and second if the
IRS (Internal Revenue Service)
determines the refund is less
than projected, they may owe
more money to the creditor.

The lease is a new quick loan
which carries many drawbacks,
the obvious is that the consumer
owns nothing. In addition, if the
car has been driven more miles
than originally estimated, added
fees will accrue for each
additional mile. If you are a
member of the military and are
transferred, you may no longer
be able to take the car with you,
you cannot sell the lease to
someone else, and it may cost
you more to cancel the contract
than the vehicle is worth.
Finally, because there are so
many variable terms in the
contract, there is no way for a
consumer to know if they have
negotiated a good deal.


Pawning goods is one of the
oldest types of quick loans
available. In many cases, after
the consumer places personal
goods in hock for a sum of
money, the goods usually are
never redeemed.


On paper, a company will
purchase a consumer’s
household appliances and lease
them back to the consumer. The
consumer receives a $200 loan
but provides to the merchant
two post dated checks, one for
$200 and one for $50. If the
$250 is not repaid to the
merchant before the date on the
checks, the merchant then
cashes the checks.

Quite simply, I am not an
advocate of “Quick Loans”. Just
as President Jefferson hoped to
use the debt of the Native
Americans to dispossess them
of the forests, today’s creditors
hope to reap the rewards of
compound interest and
dispossess consumers of their

In this respect, little has
changed since Jefferson’s time,
because when one acquires
debt greater than their ability
to pay, the creditor gains power
over the individual
disproportionate to the actual
amount owed.

President’s Message

Karen Varcoe, Cooperative Extension
Service, University of California

On January 1, 1997, I began the
first of two years as your
President. In fact, since the by-law
changes at the meeting in Grand
Rapids, I will be the last AFCPE
to serve a two-year

Candidates Needed for 1998

In Summer, 1997, we will select
a President -Elect who will serve
one year as President-Elect and
one year as President. If you have
any suggestions about who that
person should be, please contact
the Nominations Committee Chair,
Janet Beckman.

Members Needed for

The past two years have been a
time of transition for AFCPE. The
Board and I are hopeful that, with
the transitions behind us, AFCPE
can move forward and develop
new opportunities for our growing
membership. One of my primary
goals for this year is to review our
committee structure and increase
membership involvement in
committees. The strength of the
organization is membership
involvement. Committee chairs are
making a concentrated effort to
ensure that all interest groups
within AFCPE are represented on
their committees so that the
diversity of the membership is
adequately reflected in the work of
the committees. This will help to
ensure that the interests of all
members are represented. This also was the
logic behind another recent by-law
change that calls for each specific interest
group to have at least one
representative on the Board.

Apply for Committee Service

Enclosed in this Newsletter is an
application for Committee Service.
Please take a moment to fill this
out and return. Your committee
assignment will begin at the
December conference. Having
your applications now will help us
to organize our committees and
have them in place prior to the
conference. Committee work helps
you to become more involved in
AFCPE, to learn more about the
organization, and to meet new
people. Your work also helps to
make the organization stronger.
So, get involved. I know you have
heard this before, but AFCPE
really is only as strong as we make

Annual Conference Schedules

I know that some of you are
concerned about the date change to
December for the 1997 Annual
Conference; however, many of you
are happy with the date change.
So, the conference will be held in
December this year and in 1998 as
we already have a signed contract
for a lovely hotel in Ft. Lauderdale
for 1998. Please be assured that
the issue is not resolved and the
Board will be asking for your input
before making a decision about the
1999 Conference.. (Editor’s note:
In the January Newsletter readers
and members were also asked to
respond to this issue.) If you have
strong comments, please put
them in writing to me via snail
mail or e-mail at:


I look forward to serving as your
President and to welcoming you to
San Diego for the 1997 Annual
Conference. ……Karen

Practitioner’s Corner

Employee Education
Network Being Formed

A network of professionals
interested in personal finance
education for employees is being
organized by E. Thomas Garman
at Virginia Tech. People interested
in learning more about how to
educate employees on financial
matters and those willing to share
resources and expertise on the
topic are welcome to join.

To do so, please send Tom
Garman — e-mail, tgarman@vt.edu
or Virginia Tech, HIDM-0424,
Blacksburg, VA 24061-0424, your
e-mail address. People without e-mail may just send their name,
address, fax, and telephone.

It is anticipated that a web site
on Personal Finance Employee
will be established by
late summer.

Tom Garman, Virginia Tech


Call for Extension
– Extension’s
Role in Welfare Reform

A meeting for Cooperative
Extension professionals will be
held Wednesday morning,
December 10, prior to the start of
the AFCPE Conference that
afternoon. Sharing of Extension
programs and an approximately
one-hour panel discussion on
“Extension’s Role in Welfare
Reform” are planned.

Extension professionals wishing
to be part of the panel presentation

are asked to submit proposals.

Approximately four presenters will
be selected.

Submit proposals by Friday,
June 13, 1997 to: Patricia A.
Behal (Myer), Cooperative Extension,
P.O. Box 11130, Reno, NV 89520.
e-mail: pbehal@fs.scs.unr.edu;
Fax: (702)784-4881; Voice
Phone: (702)784-4848.

Limit proposals to one page.
The proposal should give a brief

synopsis of your ideas for
Extension’s role in welfare reform.

Reviewers will make the
selection of panel members on the
basis of innovative ideas
presented. Review of panel
proposals will not be blind.
Include your name, affiliation,
office address, phone and fax
numbers, and your email address.

The sharing of Extension
programs will be informal.
Anyone wishing to share ideas is
asked to bring handouts for

Pat Behal, University of Nevada

Private Practice

How Do We Counsel?

In a counseling session the
husband said in a quiet voice, “this
was really the way to go.” I knew
this was a break-through to an
insight from the previous session
when I’d given them the Power
Pay printout for debt repayment.
As he talked further, I felt
confident that progress would be

When I took this case for group
supervision, I had given a brief
description of the case–that it
was a couple who had debts and
there had been impulse spending.
After playing a segment of a tape
from the session, my colleagues
began reflections. The question
was asked about what would replace the
impulse spending for the need it
had been filling?

This was an important question
for two reasons. First, I believe
that group reflection is important
for all counselors or therapists to
help open up areas the counselor/
therapist may have overlooked or
recognize possible transference
issues. I have appreciated my
professional affiliation with the
American Association of Pastoral
Counselors, which requires
supervision. I believe we gain
insights into our counseling and
learn counseling skills from this

Secondly, this is where as
financial counselors, we need good
insights, intuition, and counseling
skills. The question then becomes
one of where our ethical boundary
is at least in the states which have
licensing laws for counseling. Do
we know enough counseling skills
to be effective in understanding
the underlying needs of the client
and address them so that if a
behavior is changed, it won’t just
be transferred to another area? I
think we all agree that
mismanagement of money has
deeper implications. Where is the
point of crossing into psycho-
therapy, which requires licensing
in some states? This question
remains for us personally and for
us as a group of professional
financial counselors.

Peggy Shorney, Financial Counseling
Services, Lincoln, NE

Attention Presenters:
Guidelines for Call for
Papers, Posters, and
Ideas at Work for the
1997 Annual Conference
were in the January
Newsletter. Contact The
Administrators, Inc. for a

OR, click here for Web Call

AFCPE Business

1997 Annual Conference,
San Diego, CA -
December 17-20, U.S.
Grant Hotel

The theme for the 1997 Annual
Conference is Perspectives On A

Changing Financial World. To
date, Don Blandin and Robin
Leonard have agreed to speak.

This year’s conference will be
held at the
U.S. Grant Hotel in
the heart of downtown San
business and historic
cultural district.

Built in 1910, a recent $80
million restoration has preserved
the U.S. Grant Hotel’s legendary
beauty and superb craftsmanship.
Its guest rooms are lovely and
spacious. The hotel contains an
award- winning restaurant, a
lounge featuring live jazz, and a
fitness center. Afternoon tea is
served in the lobby from 4 to 6
p.m. Monday through Saturday.

We have tried to keep meeting
locations centralized. Continental
breakfasts will be served Thursday
through Saturday just outside the
meeting rooms so you will be able
to eat, socialize, and arrive at your
meeting location on time. The
exhibits will be located in the
room adjacent to our main meeting

The Grant is within walking
distance of the Convention Center,
shopping at Horton Plaza and the
Paladion, theaters, restaurants and
the harbor.

Complimentary airport shuttle
service is available to the San
Diego Airport.

If you have any questions about
the hotel or local area, feel free to
contact me at: University of
California, 135 Highlander Hall,
Riverside, CA 92521, (909) 787-
5241, or connie.costello@ucr.edu.

Connie Costello

Local Arrangements Chair

Future Annual

Meetings for 1997 and 1998
have been scheduled for early
December. If this change in time
makes it difficult for you to attend,
it is important for you to let Board
members know. And, as we plan
ahead for 1999 and beyond, please
let Board members know what
time of the year would be best for

Deanna Sharpe, University of Missouri. email: cfedls@showme.missouri.edu

Financial Counseling and
: The Journal of
the Association for
Financial Counseling and
Planning Education,

Volume 7, 1996

The lead article listed below,
“Why Do Women….?” received
editorial comments from the
national press including Newsday
and The Washington Post. One
writer referred to Financial
Counseling and Planning (FCP)
the “weighty journal!”

Contents – Vol. 7, 1996

So What? And Other Responses to
Research., Sherman Hanna

Why Do Women Invest
Differently Than Men?, Vickie
L. Bajtelsmit & Alexandra

Factors Related to Risk
Tolerance., Jaimie Sung &
Sherman Hanna

Effects of Family Income and Life
Cycle Stages on Financial
Asset Ownership., Jing J. Xiao

Determinants of Couples’ Defined
Contribution Retirement
Funds., Yoonkyung Yuh &
Sharon A. DeVaney

Determinants of Financial
Adequacy for Retirement.,
Jieyu Li, Catherine Phillips
Montalto, and Loren V.

Breakeven Periods for Individual
Retirement Accounts with
Partial Withdrawals., Premal P.

Newlywed Couples’ Debt
Portfolios: Are All Debts
Created Equally? Deborah D.

Cash Flow Management and
Credit Use: Effect of a
Financial Information
Program., Sharon A. DeVaney,
Elizabeth E. Gorham, Janet C.
Bechman, & Virginia A.

Effect of Financial Resources and
Credit on Savings Behavior of
Low-Income Families., Joan
Koonce Lewis

Negative Net Worth and the Life
Cycle Hypothesis., Peng Chen
& Michael S. Finke

Home Ownership and the Decision
to Overspend., Chandrika
Jayathirtha & Jonathan J. Fox

A Test of the HUD Guideline for
Borrower Selection of a 30-Year, Fixed-Rate Mortgage.,
Walt Woerheide, John
Marquardt, & Richard Forner

Efficient Portfolios for Saving for
College., Sherman Hanna &
Peng Chen

Teenagers’ Money, Discretionary
Spending, & Savings., M.J.

Multiple Imputation in the 1992
Survey of Consumer Finances.,
Catherine Philips Montalto &
Jaimie Sung

Effect of Financial Concerns Upon
Workplace Behavior and
Productivity., Flora L.
Williams, Virginia Haldeman,
& Sheran Cramer

The Negative Impact of Employee
Poor Personal Financial
Behaviors on Employers., E.
Thomas Garman, Irene E.
Leech, & John E. Grable

1996 dues paying AFCPE
members were mailed a copy of
the Journal in late November or
December. If not, contact Sherman
Hanna, Editor.

AFCPE and the World
Wide Web: Using Our

So what is this ECC stuff? It
stands for Electronic Communica-tions Committee. Some time ago
as the AFCPE continued to grow,
it was suggested we take
advantage of the wide world web.
So we did. The AFCPE web
site is:


(No dot after htm)

(use only lower case letters)

There are actually two home pages for AFCPE. The one listed above is intended as a gateway for current members to quickly reach services and news. The other home page is intended as an introduction for non-members. This would be the better one for links from your web site.
http://hec.osu.edu/people/shanna/afcpe/ Non-member AFCPE home page

The original design was accomplished by Grady Cash who was
last year’s chair for the committee.
The keeper of the site, The
WEBMASTER, is Sherman
Hanna. He has been updating and

expanding the web site ever since.

The main purpose of the site is
to interest new people in AFCPE
and hopefully have them join our

Current members, YOU can
use the web site to:

–get back issues of the AFCPE

–get abstracts and some

complete articles from the Journal,

–to get information on the Annual
Conference, San Diego,

–update your mailing address and

–reference the Officers and Board
of Directors.

The AFCPE Certification
Programs are presented at the site
with a brief description of the
Accredited Financial Counselor
(AFC) and the Accredited Housing
counselor (AHC) program.

Future plans. We are presently
investigating the possibility of
linking members to members in
order to open up another resource to our membership. If
you or your organization has a web
site, please ask the webmaster to add a
link to the AFCPE web site.

At the Annual Conference in
San Diego next December, the
ECC committee invites all
members who are interested in
computers, programs, and the
WEB to join us at an informal
meeting — time and place to be
announced at the


Brad Towle, CFP, Apple Valley, CA

Sherman Hanna, WEBMASTER, The
Ohio State University

1997 AFCPE Awards

Every organization strives to
promote excellence and innovation
within their chosen field. But,
excellence and innovation are
characteristics of individuals not

AFCPE every year seeks to
honor those who have exhited
these characteristics through their
awards program. The five awards

Financial Counselor of the

Journalism Award

Mary Ellen Edmundson
Educator of the Year

Outstanding Education

Outstanding Financial Center

In considering nominees, you
are not limited to contributions
made in the current year. Look at
the accomplishments that
individuals/centers have made
throughout their careers.

The AFCPE is fortunate to
have extremely talented and
dedicated members who go above
and beyond to do good things for
the financial counseling and
education professions. This is our
chance to say “you did a great
job.” Do your part. Nominate a
members who you know makes a
difference. And yes, you can
nominate yourself.

Click here to see Awards criteria and nomination

Dennis Chrisco, Awards Committee
Chairperson, McConnell AFB, Wichita,

Call for AFCPE
Distinguished Fellow

Now is the time to nominate for
the Distinguished Fellow Award a
member who has made significant
contributions over many years to

The criteria for the award are
that the nominee must:

(1) have provided exemplary long-standing service to AFCPE.

(2) be a nationally recognized
leader in the field of financial
counseling and planning
education; and

(3) have displayed high standards
of professional and ethical conduct
throughout his/her professional

Persons making nominations
should provide the name of the
nominee and his/her current
mailing address and telephone
number, a descriptive outline of
the accomplishments of the
nominee in relation to the criteria,
and provide your address and
telephone number. Nominees may
be contacted for additional
information. Please forward
recommendation(s) to
, AFCPE Executive
Director, by May 31, 1997.

Rosemary Walker, Chairperson

1996 Distinguished Fellows


Myung-Hee Park, Seung Sin Lee
& Mi Kyeong Bae (1996).
Overspending of Wage-Earner
Households in Korea – Application
of Financial Ratio Analysis.
Journal of Korean Home
Economics Association
, 34(5),

The analysis in this article shows
that 18% of Korean households
with an earner in a large, national
sample overspent. This is lower
than the United States rate, as a
40%over-spending rate for all
households was reported by Bei,
Hanna and Lindamood, 1993
Financial Counseling and

In the Korean sample
households with at least one
earner, over-spenders have higher
mean spending on housing,
apparel, health, education, and
leisure than non-overspenders.
Overspending households had
higher mean income but lower
financial assets than those that did
not overspend. A multi-variate
regression analysis showed that all
other things equal, the ratio of
spending to income was higher for
educated households and for larger
families, and increased with age up
to age 55.

Sherman Hanna and Seonglim Lee

The Ohio State University

Stephen E. Frank (1996,
August 23). Over Your Head in
Debt? Bankruptcy Offers New
Wall Street Journal C1, 6.

The increase of bankruptcies
doesn’t carry the stigma today it
once did. The article discusses the
conflicting advice given
overdebted consumers: file
bankruptcy and discharge debts
versus seeking credit counseling
and making the best possible effort
to pay the creditors.

Relying on bankruptcy to get out
from under debt, even if it is
technically legal, morally it simply
isn’t right, says Irene Leech,
associate professor of consumer
education at the Virginia
Polytechnic Institute and State
University in Blacksburg, VA and
AFCPE member. “We need to do
everything we possibly can to
repay our debts,” she said.

Still some experts including
Ronald Mann, associate professor
of law at Washington University,
St. Louis say, “For a lot of
consumers, filing for bankruptcy is
likely to be the best way to keep
their house.” Bankruptcy stops
debt collectors, allowing debtors to
discharge their debts while holding
on to important assets, such as a
home or car, according to Mann.

According to the article, a
lawsuit was pending at the time of
writing against the National
Foundation for Consumer Credit
(NFCC) because NFCC members
don’t advise clients of the
bankruptcy option, even when
filing for bankruptcy might be in
the clients’ best interests. The
NFCC denies the charge.

NFCC President Durante
Abernethy says there is no conflict
of interest. He says he is
“confident” member agents
discuss bankruptcy with clients,
though he says the NFCC doesn’t
demand that they do so.

The average NFCC client, he
says, earns $25,000 a year, has
$19,000 in outstanding credit-card
and automobile debt and requires
42 months of credit counseling to
emerge from debt.

“These folks have come to us in
most cases because they
understand we’re an alternative to
bankruptcy,” he says. “It’s not
scripted in every counseling
session that if they’re insolvent we
tell them they could file for
bankruptcy, because we know
when they come in they don’t want
to do that.”

Submitted by Jean Lown, Utah State
University and summarized by the Editor.

Early Retirement Isn’t in the
Boomers’ Future.
Wall Street
, May 6, 1996, A1.

Trend toward early retirement is
likely to reverse.

Primary reason is economics
(inadequate savings).

Contributing factor: “dying
paternalism of big corporations”.

Scaling back of retirement
benefits for government workers
who joined after 1984.

Rise in Social Security retirement

Maximum monthly Social
Security check is currently $1,248.

The big question is what are these
aging, economically needy
Boomers going to do?

Alderman, L. (1997, January).
“They’re living the good life on
$17,500 a year.” Money, 133-138.

Describes the money saving
techniques used by Amy
Dacyczyn, author of The Tightwad
and her husband, Jim.
After describing strategiess used to
cut expenses such as garage sale
shopping, patronizing day-old
bread stores and warehouse food
stores, etc., experts including a
financial planner and family and
consumer sciences professional
assessed their methods. The
experts laud their thriftiness but
question the safety of out-of-date
food, the wisdom of lack of
investing for retirement and
emergencies, and possible reaction
of children reaching difficult
teenage years who have to rely on
used clothing and minimal paid
entertainment. This article
provides a balanced look weighing
thriftiness versus spending to meet
a child’s perceived needs.

Web resources related to frugal living”

Bulletin Board

OOOOps! AFCPE Newsletter,
January 1997.

Book review, The Low Income
Consumer: Adjusting the Balance
of Exchange, Chapter 6 …. The
result: 44% of those with incomes
less than $15,000 do not use

Congratulations to Linda Kirk
Fox, Associate Extension
Professor and Extension Family
Economics and Management
Specialist, University of Idaho,
and AFCPE Board member
was named one of 10 outstanding
1996 Leaders by the American
Association of Family and
Consumer Sciences.

Call for Papers for the Journal
of Consumer Education
papers or research articles. Due
October 1. Contact Vicki
Fitzsimmons, Editor, (217)333-2958, vicki@uiuc.edu

TIAA-CREF invites you to
submit an article or book on
scholarly research about lifelong
financial security to be considered
for the new, $20,000 Paul A.
Samuelson Award. For more
information, log onto the TIAA-CREF web site at
http://www.tiaa-cref.org or
contact Dr. Mark J. Warshawsky,
TIAA-CREF, 730 Third Avenue,
23rd floor, NY, NY 10017-3206.

New area code for Newsletter
Editor on April 15, 1997

(870) 526-2199; FAX (870-526-2582)

Newsletter (ISSN-1096) of the
Association for Financial
Counseling and Planning

Vol. 14, No. 2 April, 1997

Published quarterly January,
April, July, October

Ruth Helein, The
Administrator’s Group, 3900
East Camelback Rd.., Suite 200,
Phoenix, AZ 85018 (602)912-5331; FAX (602)957-4828;

FINANCE (IPF), Ann Coulson,
CFP, Director; c/o The
Administrator’s Group (See

KAREN VARCOE, President,
Cooperative Extension Service,
University of California;

ESTHER MADDUX, CFP, Past-President, Cooperative
Extension Service, The
University of Georgia

MICHAEL RUPURED, Vice-President, Cooperative
Extension Service, Kentucky
State University,

FRED WADDELL, Secretary,
Auburn University, AL

Treasurer, Port Mugu Navy

Board Members

Sharon Burns, CPA, Columbus,

Judith Cohart, NFCC, Silver
Springs, MD

Linda Fox, Cooperative
Extension Service, University of

Deanna Sharpe, Family &
Consumer Sciences, University
of Missouri

Issac Templeton, USAC FSC,
Alexandria, VA

Debbie Vosburg, Air Force Aid
Society, Arlington, VA

Contributors: Janet Bechman,
Pat Behal, Sharon Burns, Dennis
Chrisco, Connie Costello, Ann
Coulson, Linda Fox, Tom
Garman, Sherman Hanna,
Stephen Hannan, Jean Lown,
Michael Rupured, Deanna
Sharpe, Peggy Shorney, Brad
Towle, Karen Varcoe, Debbie
Vosburg, Rosemary Walker

Submit articles by June 1 to:

Judith R. Urich, CFP,
Newsletter Editor, University of
Arkansas, NEREC, East Main
(UPS); P.O. Box 48, Keiser, AR

(870) 526-2199

FAX: (870) 526-2582


Layout: K. Boyles

Click here to return to the AFCPE Newsletter index
AFCPE home page
Financial Counseling and Planning Journal home page