With more and more families living paycheck to paycheck, budgets are tight. It’s become a fact of life to barely make obligations and to have little money left over for savings. If this describes your budget, you may find that credit and debt counseling can help you loosen your budget, get more cash to spend each month and ultimately improve your financial situation.
How Debt Counseling Works
The first step is to make an appointment to talk with a debt counselor. This can be done over the phone, on the Internet or in person. You will probably be asked to bring documents to the meeting like bank statements, proof of income, pay stubs, credit card or other loan statements and various identifying information. You may be asked to fill out a general budget form saying about how much you spend per month on things like food, housing, utilities, debt service and savings.
Once you have all your information, your debt counselor (also known as a credit counselor) will go over your budget line by line to identify ways to save money. For instance, if your income suggests that you are eligible for the Supplemental Nutrition Assistance Program (SNAP, or food stamps), the counselor may provide information on how to apply and save some money on food each month. If your line item for entertainment is very high, a counselor will give you tips on how to be a little more frugal in your spending habits.
Your counselor will also look at the details of each of your debts and talk to you about what they mean. For instance, many people don’t know that if they just make minimum payments on high-interest credit cards each month, they could take 20 to 30 years to pay off. That debt payment represents a significant amount of money each month that could, if paid off, go toward more prudent investments like a down payment on a house, college savings for the kids or retirement.
Finding a Solution
Debt counseling is all about finding solutions, one of which might be Credit Guard debt consolidation. If you have high-interest, high-balance debts, your counselor may recommend consolidation as an option. While it may not lower your monthly payments in the immediate short-term, your long-term savings may be in the thousands. A counselor will help you determine if consolidation is the right approach for you, so why not give one a call today?read more