Confessions of a Financial Counselor
As a Financial Counselor, most people I see in my office are people that are stressed by debt. I see a huge range of people: five-digit monthly incomes to three-digit; single folks to married couples with several children; recent immigrants to those whose people go back to the first bipeds on this continent; and everyone in between. Their debt spans a broad range, too: An unnoticed $118 medical bill that went to collections to $98,000 in credit cards.
Here's the story of one of the many families with whom I've worked:
Mark and Carol's Story:
Our story really starts in 2009 with the economic downturn. My husband and I were self-employed and we found that we were losing ground quickly. We were making all of our payments and basically just ‘surviving.’ We decided to rent out our home and were able to make the mortgage payments, but then something else would give. And as a result we ran up our credit card balances. We could pay one but not the other. With a heavy heart, we decide to list our house for sale. Thankfully it sold in just a few short days. This was a big monthly payment off our chests and we regrouped. Finally, we hit the wall again. We knew something had to give.
The anxiety people have about seeing a financial counselor for their debt can fill the office. Some express it out loud: “I was so afraid to come.” “I am so ashamed to be here.” Now, I know they shouldn’t have those feelings, but they do and they are real. When I think about it, I am astounded by their courage to come anyway! Could I be so brave?
We work hard to put people at ease, and one of the most gratifying phrases our financial counselors hear is, “I’m so glad I came!” We don’t do magic, but we can help clients develop a realistic strategy to deal with their debt. Programs like our Debt Management Plan (DMP) can feel like magic, although it really comes down to people summoning the courage, making changes big or small, and math. A realistic spending plan is part of the math—not spending more than what is coming in— plus basic addition and subtraction. The other parts involve percentages and commitment. (Okay, I don’t remember studying commitment in math either, but it is about seeing the problem through to the final solution.) The percentage piece is the APR (Annual Percentage Rate, aka interest rate) you are paying on the debt. If it is high, you can be spinning your wheels, paying month after month after month with minuscule progress to show for it.
A Debt Management Plan can lower those interest rates so the debt is paid in a fraction of the time. As one client put it, “I can see light at the end of the tunnel, and it isn’t from an oncoming train!” One phrase we hear that isn’t so gratifying is, “I wish I had come in sooner.” It isn’t gratifying because we often think it to ourselves. It is much easier to change course before you hit the wall than after.
Call us if you are showing the first signs of distress:
- Only making the minimum payments
- Using more than 50% of your available credit
- Needing to use credit after paying for credit
- Making late payments
- Paying off debt with another debt
- Considering using retirement or other long-term savings to pay debt.
So, take a deep breath, say “I need to do this,” and do it! Be one of the many thousands who were glad they did. You will thank yourself for your courage! Go to our website to get started.
Author Mary Ellen Kaluza is a Financial Counselor at LSS Financial Counseling and specializes in helping people take charge of their financial situation.