Personal Finance Interview with Lauralynn Schueckler on Credit Counseling for Mint.com
If you've been procrastinating on taking a hard look at your bank account, Lauralynn Schueckler, online marketing specialist for Advantage Credit Counseling Service, says there's no better time than now to start managing your finances properly.
"It's so important to have a household budget and stick to it every month," she says. "It's also important to have enough money left over each month to put it into a savings account or retirement fund."
Getting started on money management is especially important if you're in debt, because the longer you wait, the more time and money will be needed in order to become debt-free, she adds.
We recently checked in with Lauralynn to learn more about the smartest things you can be doing with your money, the worst habits to get into and how to take control of your finances.
Tell us about Advantage Credit Counseling. What services do you offer?
Advantage Credit Counseling Service is a Nonprofit 501(c)3 organization that has been assisting individuals with their financial issues since 1968, by providing expert credit counseling and debt management services. We have a tried and true Debt Management Program that can waive or reduce high interest rates, eliminate late and over-the-limit fees, save people money and help them get out of debt as quickly as possible.
We offer free credit counseling, bankruptcy counseling, a bankruptcy education class for discharging one's bankruptcy, our debt management program, housing counseling, credit report review services, free online budgeting and goal tracking tools, and much more.
We also offer free outreach programs and classes to help educate the community about budgeting, saving money and the wise use of credit. Our online educational library and blog both have numerous relevant topics and discussions that our visitors find really useful and helpful in their everyday lives. Social media is another tool we use to help educate consumers and connect with people that may need our services now or in the future.
Who should be using them?
Anyone can benefit from our services, even if they do not feel they have a debt problem. We can still help them find ways to save more money, start an emergency savings fund and build a budget.
The individuals who could benefit the greatest from our services would be someone who has unsecured debt issues with credit cards, medical bills or personal loans. They would probably be good candidates for our Debt Management Program, which could save those individuals thousands of dollars in interest and years on paying off their debts.
There are also those people out there who don't know they have a debt problem. They are making the minimum monthly payments on their credit cards and they think they are fine, but they are one life-changing event away from falling into debt. Whether it's the loss of a family member or job, some medical issues creep up, a divorce, a new baby, a wedding, etc. Suddenly they find themselves in over their heads, and they don't know what to do. We'd like to help those people now, so they don't have to call us in the future when things are really bad.
Can you tell us about your debt management program? How does it work?
Our Debt Management Program (DMP) is beneficial, realistic, tried and true. Our certified credit counselors are experts in creating personalized debt management programs for individuals who are faced with unsecured debt problems. The DMP will include a money-spending plan based on your income, expenses and lifestyle, which will help you manage the debt you have today and the money you'll make tomorrow. There are also a number of less obvious benefits, such as learning to use and maintain a healthy budget, living without being dependent on credit, not having to worry about your creditors, and learning the importance of paying more than the minimum payment.
The first step in our DMP process is to go through our free credit counseling session. This can be done online, over the telephone, or in-person. Once the credit counseling session is complete, you'll get an overview of your current budget, and you'll also receive a custom Action Plan with helpful tips, links, and suggestions.
If you sign up for the DMP, we will then send your proposals out to all of your creditors. We'll try to get them to lower or waive your interest rates and reduce your monthly payments. When all the proposals have been accepted, you'll only need to make one monthly payment to the agency, and we will distribute it out to all of the creditors. This continues and as you pay off one creditor completely, that amount will be added in and sent to the next creditor with the highest interest rate, and so on and so forth, until all of your creditors have been paid in full, and you are debt-free!
What are the biggest concerns or problems people are coming to you with right now?
We're seeing consumers who are struggling with unsecured debt, such as credit cards, finance company loans or medical debt. In some cases, these consumers are having difficulty making the minimum monthly payment and are falling behind, or they are making only the minimum monthly payment and they're not making any progress in paying off their debt because of interest.
Another big problem or concern is with medical debt. This is when a medical illness or injury has caused a large amount of medical bills and the consumer is having a difficult time keeping up with the payments. The reason we see so many medical debt problems is because the individual usually cannot work because of the illness or injury, and if they are not insured, they have to pay the medical bills when there's no money coming in.
How do you think people's views of money and personal finance have changed since the downturn in the economy?
I think people are learning to be a little more money conscience and responsible with their credit. That's not to say that people aren't still opening up credit card accounts and using them, but I think with the Internet and all the information we have at our fingertips now, people are more informed and are using credit a little more responsibly.
What's the first step that people who are heavily in debt should take to pay it off?
Consumers who are heavily in debt need to know exactly how deep in debt they are in order to come up with a plan to pay it off. I would recommend that they review all of their monthly credit card and loan statements to fully understand their total monthly obligations.
I would then recommend checking their credit report through the website www.annualcreditreport.com to confirm there are no other accounts that they are liable for. Once they know what they're dealing with, they need to develop a plan of action to pay off the debt. This could include seeking assistance from a nonprofit credit counseling agency or deciding to tackle one debt at a time by paying more than the minimum payment. However, it's important to maintain the payments on all accounts in order to remain current. The consumer may also want to consider contacting the creditor to see if there are any payment assistance programs available that will provide a reduction in their monthly interest rate.
What are some good habits you encourage everyone to get into when it comes to managing their money?
Setting up a budget is the foundation to good money management. You can't manage your money properly if you don't know what's coming in and what's going out each month. So we recommend starting with a budget, and then finding any cutbacks or places where you can save money each month.
Then we suggest taking that extra money and starting an emergency savings fund in an interest-bearing savings account. This will protect you from any unforeseen emergencies or unexpected life-changing events. It's also a great idea to start a retirement fund, if you haven't already.
What are some bad habits they should try to kick?
Some budget busters that should try to be avoided are getting that expensive latte every morning before work, buying bottled water every day, going out for lunch multiple days a week, purchasing small ticket items such as gas, gum, fast food, movie tickets, etc. on a credit card.
There are other bad habits that can lead to some serious debt, such as a gambling addiction, drug and/or alcohol addiction, shopping addiction, etc.
Another bad habit is spending money before you have earned it. Many people think it's OK to spend money before they've earned it, because they know it's coming in that next paycheck. But what if it doesn't? What if you suddenly lose your job and that income isn't coming next week? This kind of mindset can really be harmful and unproductive to good money management.
What are your favorite tools and resources for helping individuals and families manage their money?
We offer a free online budgeting tool called Budget Builder that is secure and super easy to use. We also offer another free tool called Goal Tracker that will help you with your savings goals and keep track of how much money you have saved and how much more is needed to reach each goal. Some of the other tools and resources that we recommend are www.mint.com, www.annualcreditreport.com, both Credit Karma and Credit Sesame for monitoring your credit score, and any reputable finance blog that's relevant and up-to-date.