Ideas please

[moneymatters]

One of my co-workers and I are thinking about starting a debt management club at work and need some advice on how to set it up properly.

We want to start the club off with 10 members and work out way up to 50 members. Each member will contribute $10/week, totaling $100/week to start. Each week, we would give two members $50 each to put towards their personal debt (credit cards, personal loans, student loans, medical bills, etc...). The collection does not apply to mortgage loans. Each member must be committed to paying his/her weekly dues, or they will be kicked out of the club.

We would all choose 4 club members that are reliable, knowledgeable in debt management, and trustworthy to handle all club operations. One of the 4 members would serve as a treasurer. The treasurer would be in charge of collecting weekly dues from each member and put the money into the club's bank account. This person would send off all debt payments for each member of the club to ensure the money is going toward his/her debt. Of course, we would have maybe one or two other leading members to verify all deposits and payments. One member would be in charge of all club operations.

Do we need to write up a contract? If so, what should it state?
Is it necessary for us to register the club as a non-profit organization?
Should we have a treasurer to handle debt payments or give the money to the member?

Your input is greatly appreciated.

[Harrison]

I saw the similar system in my neighborhood. They don't really sign any contract but just trust within each other.

[Fern]

why do you feel it necessary that the $50 handouts be used only for personal debt, not mortgage debt? I think it's a little heavy-handed that you're going to have a club member who pays the debt off for the person who got a $50 handout that week.

a little invasive as far as privacy goes. If they want to blow the $$ on something else, they have only themselves to blame.

[safari]

I think I am missing something. Why would the people who are trying to pay off their debts add another $10 weekly payment? Who is going to decide who gets the $50? Even if each member gets $50 every 5 weeks, they will break out even. Why can't you have a club without membership dues?

[thekid]

If each person just contributed their 10$ to their own debt wouldn't it work out the same? Am I missing something?

[boefixepa]

I too have trouble seeing the logic of this club. I can't help but feel sometime somewhere, people are going to be burned.

Now getting together to share ideas, and support one another, maybe getting together and brown bagging lunch rather then going out, things like that. With money getting involved you are asking for trouble.

Personally what I see happening is someone in desperate need coming for the handout then backing out and not contributing or dropping out all together so they come out ahead.

Plus all my debt is in my house, so I'd contribute, but never get the chance to recieve?!? That makes no sense.

You have to be careful with this. I can see lots of problems.....

[myself]

One of my co-workers and I are thinking about starting a debt management club at work and need some advice on how to set it up properly.

We want to start the club off with 10 members and work out way up to 50 members. Each member will contribute $10/week, totaling $100/week to start. Each week, we would give two members $50 each to put towards their personal debt (credit cards, personal loans, student loans, medical bills, etc...). The collection does not apply to mortgage loans. Each member must be committed to paying his/her weekly dues, or they will be kicked out of the club.

We would all choose 4 club members that are reliable, knowledgeable in debt management, and trustworthy to handle all club operations. One of the 4 members would serve as a treasurer. The treasurer would be in charge of collecting weekly dues from each member and put the money into the club's bank account. This person would send off all debt payments for each member of the club to ensure the money is going toward his/her debt. Of course, we would have maybe one or two other leading members to verify all deposits and payments. One member would be in charge of all club operations.

Do we need to write up a contract? If so, what should it state?
Is it necessary for us to register the club as a non-profit organization?
Should we have a treasurer to handle debt payments or give the money to the member?

Your input is greatly appreciated.

• Avoid the membership dues, since someone will always feel like they were ripped-off.
• Use a conference room after work (if that's OK with your bosses). Or everyone cycle around to meet at someone's house.
• Have them allocate an extra $10/wk that they were going to spend on themselves (i.e. eating out at lunch, etc.), and put it towards their bills. $40/month can be a substantial amount of money to put towards bills in some cases.

It's great to see you thinking of others!

[Tree0164]

I don't think you need to have a membership fee. Getting together at lunch or after work for support is good.

Dave Ramsey's financial peace has an "at work" program. Maybe you could look into doing that.

[moneymatters]

Fern, personal loans are faster to payoff than mortgage loans, and applying $50 to a mortgage loan every 5 weeks doesn't do very much to any of the members.

The person in charge of handling payments would volunteer to pay off the debts, which maybe my partner/co-worker or myself. Most of the people I work with trust the both of us, so I don't think they would have a problem if we took a look at their overall debt, especially when we're trying to help them. Each member's financial information would be strictly confidential.

Safari, many of my co-workers have bad spending habits, and I doubt that their trying to get out of debt. We're talking about folks that spend $200+ per week going out to eat for lunch, so my partner and I figured it would be a good idea if the club members would allow us to help them put some of that money into good use, particularly to pay down their debts. $50 may not seem like much, but it could help someone out a lot in the long run.

We would pick members in alphabetical order, maybe split it like one person whose last name begins anywhere from A - M, and the other member whose last name begins anywhere from N-Z.

As I said above, a lot of my co-workers do not know how to handle money, so we thought it would be a good idea if someone who does volunteer to help them pay their debt. Bad idea?

Also, if a member is not committed to pay their $10 every week than we know their not serious. We will replace them with someone who is serious about debt management.

My partner pointed out that in case any member(s) gets laid off, quit, or fired, he or she should commit to continue paying $10/week until we find another member to replace them.

Just thought it would be a good idea to start up something to help out the people I work with.

[Daniel_Shop]

I think this is a great idea.

It could bring some problems and some extra work to make it happen but the idea look good.

You must have very good leadership skills it seem.

The club can find new ways for saving. And can even come up with ideas about how to rise extra funds to pay out debt.

I love it

[Fern]

Why would you go to all this trouble and work to help co-workers who don't know how to manage their money? Will you stand to gain anything financially by doing this?

I still would have issues with this the way it's currently structured vis a vis privacy issues. I would definitely not want to be required to reveal all my personal stuff to you without similar disclosure and sharing by you, or without having the choice to selectively reveal certain aspects of my financial picture as i saw fit.

[moneymatters]

No one in the club would actually "gain"anything financially, except reducing their debts. The 4 members in charge would volunteer to help and not be paid.

As for the privacy issue, there would be only one member, the treasurer, who would have a record of all members personal debt, and their info would not be shared with anyone one else in the club. There's about 3 people whom I work with that we all trust to handle the debt payments and keep our personal debt info on a "hush, hush". However, only one of them would be chosen for the job.

Anyway, my partner and I are going to do some more research to help us come up with better ideas of starting the club.

Thanks again for your input!

[safari]

Safari, many of my co-workers have bad spending habits, and I doubt that their trying to get out of debt. We're talking about folks that spend $200+ per week going out to eat for lunch, so my partner and I figured it would be a good idea if the club members would allow us to help them put some of that money into good use, particularly to pay down their debts. $50 may not seem like much, but it could help someone out a lot in the long run.

$200+ per week for lunch? Wow. Thats $40+ per day. Doesn't look like they are trying to get out of debt. How are you going to ensure that the $50 that you give them will go toward their debt and won't be spent on lunch or something else?

[Fern]

he said in an earlier post that they would designate a 'treasurer' who would pay the bills (debt) for the person. That's why i've been saying all along i'd have a problem with that arrangement due to privacy issues.

[moneymatters]

he said in an earlier post that they would designate a 'treasurer' who would pay the bills (debt) for the person. That's why i've been saying all along i'd have a problem with that arrangement due to privacy issues.

Yes, we have chosen to designate a treasurer to send off the payments to make sure the money is going towards each members debt instead of something else. The treasurer would provide copies of reciepts, checks sent, etc... to each member. Bad idea?

Or should we just give the money to each member and trust that they will pay their own debt? I don't really trust this doing this as many people I work with don't know how to handle money.

FYI, I'm a female.