Debt Counseling Boosts Financial Literacy

Jeanne McTaggartDebt

Debt Counseling

Even if you are no longer in school, you can still learn helpful financial lessons and improve your “grade” in personal finance through debt counseling. According to a recent article by nerdwallet.com, 2 out of 5 Americans say they would earn a C, D or F if someone graded them on their personal finance knowledge. The article cited a survey on financial literacy. If you have more credit card debt than you can comfortably manage or are barely able to make the minimum payment on credit cards, consider lessons many people learn from their credit card debt. A certified and trained credit counselor will work with you one-on-one to educate, inform, guide and teach you about budgeting and boosting your credit score.

Understanding future consequences

Some people fail to realize the debt they take out at an earlier stage of life can easily affect their opportunities later in life. If you ruin your credit score by declaring personal bankruptcy when you are in your late 20s, you will likely have a difficult time buying a home in your early 30s. Having too much credit card debt often affects the debt-to-income ratio used when qualifying for a home. Credit card debt also affects your ability to afford rent, a car and miscellaneous expenses. By receiving debt counseling, you lay the foundation for a better financial future.

Setting priorities and goals

Another benefit of debt counseling is receiving clarity about your priorities and goals. According to the nerdwallet.com article, it is important to understand how buying low priority items you don’t value often prevents you from affording purchases that hold more importance or meaning. In other words, it is not smart to use credit cards to fill up your home with a lot of stuff you don’t even value.

Achieving a life, not a lifestyle

If you used credit cards to achieve a certain lifestyle, you could be missing out stability and security in life. It is not smart to use credit cards to impress other people only to sacrifice your own financial security as credit card debt spins out of control. With credit counseling, you learn how to manage your life instead of faking a lifestyle. Many people decide to consolidate debt so they pay off their debt in a set number of months. When reaching out for debt counseling, ask about how a debt management plan makes it easy for you to fulfill your financial responsibilities.

Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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