I want to send this out to you to answer a question that came up in yesterday’s class regarding those Credit Counseling programs. The one’s where you give a company authorization to handle communication and re-payment arrangements with your debtors.
With the growing issue of people getting in to large amounts of debt this has become a thriving industry. There are good stories and there are bad stories from people using these company’s services. Mostly bad. I found a report by Fox Business, from February of 2013, that used a statistic from the National Foundation for Credit Counseling that stated only 21% of plans succeeded while another 21% of participants pulled out in order to finish paying on their own and 51% simply dropped out and filed bankruptcy. You make your own decision from those industry statistics.
The bottom line is getting to the root of handling the household finances. The root is ‘behavior’. Tthe major problem is that the use of these companies doesn’t address the change of behavior. Delegating the ‘clean up’ to someone else is like an ostrich putting their head in the ground. You are ignoring the #1 issue…knowledge to change behavior. By having someone else take care of it you are not addressing the knowledge and skillset to fix it and know what not to do to move forward in the right direction. By doing this people, most times, end up in the same spot they were before ‘credit counseling’.
FPU teaches us to take responsibility for our actions and teaches us to learn how to ‘not do it’ again. FPU is showing us what we need to do to dig ourselves out of hole and give us the strategy to put ourselves in a position to move forward towards financial security and financial freedom. A side note; by doing this we are setting ourselves up to use the blessings God has given us the way He has planned for us AND to establish a legacy for the rest of our family.
This is not easy. BUT, it is very VERY possible. And once you get to a point of seeing the light at the end of the tunnel you will be so excited about where you are going and the possibility of that ‘feeling of freedom’ that you will never go back to where you were.
I am so passionate about this that I felt the need to dig in to this and get back with you right away.
I hope this helps.
Jim Henkel - Clinton Twp Campus FPU Coordinator
Dave Smith is part of the KCC finance staff and a Dave Ramsey Certified Coach.