How to Prepare for Your Credit Counseling Session

Financial counselor wearing a headset and talking to a client.

Credit counseling is more accessible than ever. MMI offers 24/7 access to financial experts online and over the phone. No matter what you're struggling with, if you're unsatisfied with your financial situation working with a trained financial counselor is a great first step.

If you're hesitant to get started because you're worried you're not prepared or don't have what you need to have a productive session, there's good news: credit counselors can work with whatever you've got. But if you want to go the extra mile, here are some things to have on hand when you start your counseling session.   

Know your sources of income

First, consider all of your sources for income. Sources of income might include money received from paychecks, rent, Social Security, and child support. Think about the amount of income you can expect to earn in the future.

If your income fluctuates, think about what you expect the average to be over the next year. A big part of budgeting and weighing options for your debts and goals depends on understanding how much you can reasonable spend.

Figure out who and how much do you owe

Having all of your recent bills and statements on hand is a great way to make sure you've got up to date information on your creditors. That information is crucial to building a healthy budget, but it may not always be easy to track down.

Luckily, for your convenience, your counselor can help you do most of the work by pulling a copy of your credit report. This type of credit pull is called a "soft inquiry" (basically, it's for informational purposes only) and won't have any impact on your credit score. While credit report data may not include your most recent payments, it's a great way to capture all of your debts quickly and without much legwork.

Know your expenses

Next, think about where your money is going. It might be helpful to consider that there are three main types of expenses:

  1. Variable expenses are those that vary from month to month, such as clothing and food. For these, it may be helpful to look at a few months' worth of spending and create an average.
  2. Fixed expenses are those that do not vary from month to month. Examples of fixed expenses include car payments and mortgage or rent payments.
  3. Periodic expenses are those that are not paid on a regular monthly basis. For example, both holiday and tax debts are periodic, meaning they are not part of regular monthly expenditures.

The more accurate the better, but don't let accuracy get in the way of action. Even a good guess is better than nothing, and the most important thing is that you get started. Your counselor can help you review all areas of your budget and find any expenses you may have forgotten.

Identify your financial goals

Finally, think about your financial goals. What's not working? What do you want for yourself and your family? Whether you're saving for a house, planning a trip, or simply want to stop stressing out about money every month, any goal is achievable with the right set of directions.

There's no wrong time to get help, but the sooner you start your journey, the sooner you'll reach your goal. Lots of people seek financial counseling out of panic. Things just get worse and worse until they can't ignore their problems. Don't wait until things become unbearable.

Financial counseling is free and available whenever you need it. Get started today and let an expert give you the advice and support you deserve.

Tagged in Expert insights, Helpful resources

Jesse Campbell photo.

Jesse Campbell is the Content Manager at MMI, with over ten years of experience creating valuable educational materials that help families through everyday and extraordinary financial challenges.

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