When the time has come to do something about your overwhelming monthly bills, you can seek debt advice from a variety of sources. The trick is to obtain advice from someone who has your best interests in mind, and not from someone who is trying to take advantage of you.
Certified Financial Planners
Certified Financial Planners have expertise in the field of personal finances. They can assist you not only in debt relief, but also on other matters such as insurance and estate planning. You can pay a Certified Financial Planner for their time, or you may be able to find a free service through a government assistance program, a college, or through a local community center. The debt advice you will receive will more than likely be similar to this:
- Know your income and financial obligations. You can't hope to get a grasp on your finances if you aren't really sure how much money is coming in and going out each month. You may think you don't make enough money to pay your Visa bill each month, but do you really know how much money you actually make?
- Draw up a monthly budget. Most financial experts will agree that the first couple of months of a budget are practice months, because it will take time for you to get the hang of a written budget. After it starts to work, however, you will find that you have a much better grasp on your finances.
- Stay in contact with the people you owe money to. If you are starting to fall behind on your payments, one of the worst things you can do is keep your creditors in the dark. Most lenders are more than willing to rearrange your payment schedule and even lower your interest rate as long as you contact them before your payments become delinquent.
- Stop using your credit cards until you get control of the situation. Using credit cards for purchases when you are in the middle of a financial crisis is like adding gasoline to already-burning fire.
Since Certified Financial Planners are required to stay current with their practice you may be able to locate a Planner who is willing to review your financial situation free of charge.
Consumer Credit Counseling Service
Consumer Credit Counseling Service (CCCS) is a program which is designed to assist consumers who are having trouble maintaining payments on their debt. CCCS negotiates smaller monthly payments with creditors and also obtains lower interest rates for their customers. CCCS is not designed for consumers who are in good standing and who have no problem making their monthly payments, because enrollment in CCCS is damaging to your credit score. The credit counselors at CCCS are trained to assist people in getting back on track with regards to their debt by offering customized debt advice. Various CCCS programs exist, so it is best to compare the different programs to find one that is best for you.
Debt Advice from Friends and Relatives
Friends and family are usually eager to disperse debt advice, but you must be careful which advice you take to heart. The surprising thing about debt is that you are never quite sure who is overwhelmed by it, so although your close friend or relative may appear to have their finances under control they may in fact be drowning in debt. This is why you should not take to heart every bit of debt advice you receive from the people close to you. An uncle may tell you to maximize your credit card rewards by using your card for absolutely every purchase…although this may seem logical enough, it is not really sound advice for someone who is having debt problems. A grandmother may tell you to empty out your savings account to pay off your debt, but this can be dangerous if there is not additional money left over in case of an emergency. It is best to seek debt advice from a professional, and take all other debt advice you receive with a grain of salt.