Successfully managing our daily lives includes making smart financial decisions, often requiring a fair degree of financial competence. Nevertheless, the
"Personal finance can be complicated, thus there is no shame in admitting difficulty understanding how to best manage money," said
Consumers may be hesitant to reach out for help due to misconceptions about financial counseling. Below are some of the false beliefs toward financial counseling that consumers admitted in the
* Financial counseling costs too much. The truth is that through an NFCC member agency counseling is either free or low cost. One of the requirements for membership in the NFCC is that no service will be denied based on an inability to pay. Cost should never be a barrier to finding the financial help needed.
* It would be embarrassing to discuss my situation. NFCC member agencies counsel more than 1.5 million people each year. It is highly likely that the trained and certified financial professional you visit with has encountered a financial problem similar to yours, and may do so every day.
* Credit counseling agencies only offer advice, not real solutions. Although financial education is critical to financial success, when a person has debt beyond what he or she can responsibly manage, a Debt Management Program (DMP) may be appropriate. The DMP allows consumers to continue to service their debt, repaying it in full, but often with a more affordable monthly payment, a lower interest rate, and late fees and over-limit fees stopped or lowered.
* Seeking credit counseling might damage my credit report and score. Credit counseling is not reported to the credit bureau, thus could not have a negative impact on a person's credit report or score. However, if a person elects to repay their debt through a DMP, the creditor may make a notation on the credit report of participation in the program. Nonetheless, graduates of the DMP often emerge with improved credit scores due to having paid off the debt through consistent monthly payments.
* Debt settlement or bankruptcy seems like better solutions. Both debt settlement and bankruptcy are serious financial decisions which can negatively impact a person's credit report and score for years. Before opting for either, a person should first rule out all other alternatives.
If you desire to improve your understanding of personal finance, you are not alone.
The NFCC's June online poll question and answers are below:
Which of the following best describes your financial confidence?
* I'm the CEO with a good grip on my finances = 8%
* I'm in mid-level management steadily working my way up = 30%
* I'm an entry-level employee trying to learn the ropes = 35%
* I can't seem to catch on and wish I didn't have this job = 26%
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