It is so hard to think about all of my financial problems. Friends are telling me to find a professional. But who would I see? A financial advisor, a banker, a financia
l counselor? It is so confusing and I just want my money problems to go away….
If this sounds like the messages going round and round in your head, it may be time for you to see a financial counselor. A financial counselor works with individuals or couples to help them learn better personal financial management. This might include education on sound financial principles and helping identify ways to overcome financial indebtedness. A financial counselor might help clients identify and modify ineffective money management behaviors .
A financial counselor may work for a small fee, or may even be free for those who qualify and typically, they won’t sell investment opportunities. A financial counselor will meet with a client first in order to get a clear idea of his or her personal finances. The client should bring all relevant items to this meeting like bank statements, unpaid bills, a current credit report and loan documents.
The counselor’s job is to consider all information presented. They will help the client determine their total debt load as well as their net worth. If the client doesn’t know how to access a current credit report, the counselor can either run this report or help the client access this report.
Once the information has been gathered and analyzed, the financial counselor will help the client develop a payment plan. The counselor might advise the client on which bills to pay first. As an example, the counselor may advise the client the order in which they might consider paying their bills. Housing will be carefully considered as paying for a place to live is a major priority. A payment plan might be determined to make the best use of income to pay down debt.
Debt consolidation might be discussed as well. The counselor may contact creditors to set a payment schedule and then lump all debts together. This can make it less confusing as it is simpler to pay just one bill every month. Consumers should be careful with this option and consider the changes this would make for their ability to pay one monthly bill for debt consolidation, rather than individual debts.
A financial counselor may work independently or as a part of a larger financial counseling service. You might find a financial counselor in your area through referrals from your bank. You may find a financial counselor through family, friends or coworkers. To find a professional in your area, see the Association for Financial Counseling Planning and Education at www.afcpe.org
Interview at least two financial counselors to find a good fit. Prepare for the interview by asking questions such as 1)What process do they use to determine goals for their clients? 2) How are they paid for services? 3) What kind of experience do they have in advising others who might be like you? And 4) How do they take clients’ values into consideration?
Ask questions to make the most of your time with a financial counselor. A financial counselor will help you create a plan to pay down debt…and help you sleep better at night.
