Credit Counseling Services and Financial Discipline

Written by admin on December 6th, 2010

It is no wonder that credit counseling has assumed a great importance. Everyone around seems to be under the stress of debt and wants to get rid of it in an easy way. Many credit counseling services are providing valuable help to people who find it difficult to manage their finances and end up getting into difficult situations.

If you are in need of credit counseling and looking for someone to help, the first thing that you need to know is how to weed out the fake from genuine. A genuine credit counseling company is one that has experienced professionals who know the ropes. Credit counseling is much more than just advice about spending carefully, reduce expenditure and save money. Everyone knows that and if the counselor is going to tell you just that then there is hardly any need for one. You have been told that right from your childhood. The fact that you need counseling now is exactly because you did not follow your mom and dad’s advice.

Good credit counseling means making you aware of the reason why you are in a situation that you are in.  Actually, you are not alone because most people in America end up in debt. Actually, on a rough estimate, an average American is under ,000 of credit card debt. The biggest common denominator is easy availability of credit and reckless use of credit cards.

When you have a credit card you feel like on top of the world. Nothing seems to out of reach for you. You want that latest electronic toy? No problem. Flash your credit card and it is yours. You do not even ponder for a second what it will do to your budget when it is time to pay the bills. Eventually there comes a time when your credit card is rejected. This is why many people opt for multiple cards.

Coming back to credit counseling, what you need to understand is not only how to manage your finances but also to resist temptations. That brings us to financial discipline. Financial discipline is living within your means, no matter whether there still is unused amount on your credit card. If your card allows you to spend, say ,000, more it does not mean that you go out and spend.

Financial discipline is preparing your household budget and strictly adhering to it. If you want some big ticket items that you must have, you have to structure your budget accordingly and purchase them in a phased manner rather than all in one go.

The credit allowed to you should be construed as a facility and not a license to spend. It is an arrangement for deferred payment for goods and services but eventually you have to pay the bills. And what you can pay depends upon your income. Here again, many people tend to misunderstand the meaning of income. Good credit counseling services will tell you that income is what you actually earn and not what you hope to earn in future. Spending now in the hope that your income will increase over time is a common mistake that people commit and find themselves in debt.

Credit counseling is of no use if you are not going to follow it. Don’t use your credit card recklessly and live within your known income. Remember these two basic mantras and you will never have to seek debt reduction solutions like debt consolidation and debt settlement.


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