Making The Most of Credit Counseling

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If you decide that credit counseling is your best path to paying off debt, learning how to make the most of this debt reduction method can help you reach your goals more easily. In addition to supporting you through the process, it's surprising how aligning your thinking with these simple tips can make the experience more productive and pleasant:

Be clear about your situation

Before meeting with the counseling service, take an honest look at your financial situation. List every outstanding debt, including balances and monthly payments, as well as your living expenses, to get an accurate picture of what you spend every month. Also list all sources of income. This exercise helps you prepare for your meeting financially and mentally, and ensures that you can move along to next steps more rapidly.

Be realistic

Overspending may have gotten you into debt, so assuring the counselor you're ready to go cold turkey financially may seem like the answer, but be honest with yourself. Can you really live a Spartan existence? Probably not. In order to become debt-free, you have to cut debt considerably, but you also need to allow yourself some cushion, and most credit counselors will recommend this approach.

Be open to suggestions

Credit counselors are there to help. So let them. After they've carefully reviewed your debt load, spending patterns and income, they will offer a variety of solutions -- some of which may be hard to hear initially but are designed to help you in the long run. If the counselor suggests, for instance, that you consider ways of raising your income, respond by giving the idea some thought. Also don't be afraid to ask for recommendations.

Be committed

You could potentially spend the next three to five years of your life adhering to the rules set forth by your credit counseling program, so it's critical that you see yourself continuing for the long haul. Don't sign or agree to anything until you're sure that credit counseling is right for you.

Credit counseling has helped many people take control of their debt. By understanding how to take advantage of the process, you'll get the most out of your journey to a debt-free life.

Julie Bawden-Davis is a Southern-California-based writer specializing in personal finance and insurance. Since 1983, her work has appeared in a wide variety of publications, including Family Circle, Ladies' Home Journal, Parenting, Entrepreneur and The Los Angeles Times.