Christian Financial Counseling Services
Individuals often choose Christian financial counseling services as an appealing alternative over filing for bankruptcy in a severe financial crisis. Overdue bills and surmounting fees and interest payments can quickly become overwhelming. Similar to a debt consolidation program or filing Chapter 13 bankruptcy, this special type of counseling program can help consumers caught in a debt spiral that is spinning out of control without the repercussions often present with the other two options. Taking a holistic approach to debt management, financial counseling services walk individuals through establishing a debt recovery plan and provide educational resources to help them continue to establish good credit after leaving the program.
Consumers in debt often seek out financial counseling services to manage their debt. Counselors in an eligible program have years of experience working with creditors and can negotiate with them to create a viable repayment plan for both parties. Most times, creditors prefer to work with these programs over dealing with the courts in bankruptcy proceedings. Since more of the money will be returned through such services, they are often flexible and will create a realistic repayment plan for the debtor, reducing or suspending interest and overdue charges. Counselors consolidate all outstanding credit accounts and act as a liaison between the debtor and the creditors. Like debt consolidation programs, consumers only have to make one payment to the counseling service, which is often lower than paying each creditor individually. Their counselor will then disperse agreed-upon payments to all the creditors. This debt management plan (DMP) primarily serves to get the debtor out of debt. It usually won't lower the debt owed, but these counseling agencies can reduce the amount of extra fees paid in the process and make it more convenient for individuals who are simply overwhelmed by the amassing amount of debt.
With a viable plan in place, consumers gain relief from additional debt and the stress associated with getting their finances back in order. After agreeing to a plan, creditors will put collection calls and any pending legal action on hold as long as the debtor and counseling service keep their part of the contract. Most financial counseling services provide assistance for multiple types of credit issues that can put pressure on a consumer. Many plans also include counsel for housing issues like foreclosure and high mortgages. Counselors analyze an individual's income and expenses to create an individual working budget to repay outstanding debt, establish a savings plan, and stay on track after the program has ended. In extreme conditions, referrals are made to other social agencies and resources that can step in and help in the entire process to prevent further financial crisis. This education is meant to solve the long-term problem, not just temporarily fix a short-term issue.
The Bible provides a great example of avoiding such crisis situations. The book of Genesis tells the story of Joseph. God gave the Pharaoh of Egypt a dream of seven fatted calves followed by seven lean calves. Joseph translated the dream as a warning that seven years of profit would be followed by seven years of famine. The king believed him and put him in charge of not only getting his household in order for these upcoming events, but he put Joseph in charge of getting the whole country's finances in order. Joseph made a financial plan. During the seven years of plenty, he gathered up as much food as he could and stored it in preparation for what was to come. "And the seven years of dearth began to come, according as Joseph had said: and the dearth was in all lands; but in all the land of Egypt there was bread." (Genesis 41:54) Financial counseling services help consumers do just that - to create a plan to save in times of plenty for times when higher bills, layoffs, or unexpected expenses threaten to overtake them.
However, some consumers are concerned with how such programs might effect their credit. While financial counseling services do not report to the credit bureaus, creditors may place a statement on file for the duration of the program, not permitting the debtor to borrow any further funds until the current debt has been reconciled. This practice varies among creditors. Some see counseling as a positive step to repaying debt. Others are suspicious and believe enrollment to be a sign of poor financial management overall. Regardless, statements of enrollment are usually removed once the individual has completed the program. Even with creditor statements, overall credit scores are not affected. If anything, enrollment in such programs improves credit scores. Payments are being made on time and there are often no further defaults listed. Although scores will take time recover, consumers often benefit from enrolling in financial counseling services in the long run.
Like any financial recovery program, individuals must be cautious in choosing the right service. The Federal Trade Commission (FTC) recommends interviewing at least three financial counseling services and seeking referrals over media advertisements before making a decision. Another good practice is to confirm that the agency is a member of one of three main national trade organizations: the American Association of Debt Management Organizations, the Association of Independent Credit Counseling Agencies, or the most popular National Foundation for Credit Counseling. It is also important to check fees and how they are collected. Even non-profit agencies charge for their services, although their fees are usually less than for-profit agencies. Some consider take the first consumer payment as a fee. Others take a percentage of each collection, meaning that creditors receive less than expected. However, finding a complete holistic program that focuses on education as well as repayment shouldn't be too hard to find. Each of the trade organizations have hundreds of agencies to choose from.
Christian Financial Planning ServicesFinancial planning services can help individuals get personal finances back on track as well as set and reach long-term monetary goals. Planners focus on long-term solutions, not short-term quick fixes, so consumers in serious debt should pay off outstanding creditors first and avoid accruing further debt before seeking advice from these types of providers. Credit card debt and high interest loans will only get in the way of setting and achieving long-term goals. Settling these accounts frees individuals to focus more on the big picture, which is exactly what financial planning services provide.
Planners help consumers with a variety of needs. One of the most basic foundations of financial provision is developing and following through with an effective budget. Budgets help individuals, families and business keep on track by spending less than they earn and staying out of debt. But professionals who offer financial planning services also do a whole lot more. They help consumers manage investments, retirement funds, mortgage, and estate planning. Some specialize in tax preparation, helping individuals and businesses take advantage of the ever-changing tax laws to maximize deductions and get the greatest returns to invest in their futures. Planners can also offer advice in obtaining medical and life insurance plans that work for the consumer's unique situation.
The big picture includes managing cash flow from beginning to end and enhancing monetary independence when an individual retires. But in order to begin working on the big picture, individuals must be able to communicate personal goals and ambitions. A plan that works for one person may not be appropriate for another. Each plan is unique to fit that individual's situation. Financial planning services identify where each person is in their personal journey. Is the purchase of a home in the near future? Are children involved? What lifestyle does the customer expect upon retirement? All of these factors play into creating a unique budget and setting long-term goals. Individuals must have the answers to these questions before seeking advice from a planner. Of course, no one truly knows what the future holds. "A man's heart deviseth his way: but the LORD directeth his steps." (Proverbs 16:9)
Financial planning services vary according to the type of assistance needed. The most popular and respected, a Certified Financial Planner (CFP) can help consumers in a variety of areas. Each CFP has completed three years of training and adhere to a strict code of ethics. Certified Public Accounts (CPAs) generally specialize in tax preparation and laws. Personal Financial Specialists (PFS) usually have combined qualifications as a CPA and some other field. The two remaining service providers, Chartered Financial Consultants (ChFCs) and Chartered Retirement Planning Counselors (CRPCs) specialize in insurance and retirement, respectively. Both planners are certified within the state in which they practice. Other organizations such as the Certified Consumer Credit Counselors (CCCCs) receive their certification through the National Foundation for Consumer Credit and can help consumers get out of serious debt problems and establish basic money management skills.
Fees for financial planning services also vary greatly. The industry is relatively new, and since it's beginning in the 1990s, is still not regulated. Commission is the most popular method of compensation. Some planners will usually charge 1% to 2% of a customer's assets for their services. Others may charge a portion of each purchase to cover costs. Services may also charge flat fees instead of basing them on commission. Hourly rates can average around $200 per hour. Some may charge a flat fee for a complete comprehensive plan. A third alternative involved an annual fee based on the percentage of a person's total assets.
Although many people can figure out how to manage money independently, they simply don't have the time to gather the information needed in all the various areas. By utilizing financial planning services, consumers not only save valuable time, but also have the assurance that the professional advice received is sound and secure. Of course, finding a planner who the consumer is comfortable with can take some research and time. Figure out the reason for seeking help then search for service providers who specialize in that type of planning. Schedule an introductory meeting to interview prospects regarding long-term goals. This meeting should have no fee attached. Get referrals whenever possible. Never sign with a service without knowing fee structures or hidden costs. Most planning providers now have Internet pages where potential customers can get most of the information needed.
For businesses, financial planning services can offer a more focused economic perspective to a company's financial plan. Planners help business owners assess their current situation and plan a course of action to meet where they want to be in the future. Developing a business plan, involves assessing current income, projecting cash flows in the near future, and assembling a balance sheet. All of these items will help a planner establish realistic goals for a company, small or large. Unfortunately, most small business owners cannot afford such services and are forced to figure out the difficult landscape for themselves. Larger companies who have the extra funds to outsource these types of services benefit greatly from them. But small businesses are not left out in the cold. There are many free and lost cost financial planning software packages that can help smaller companies get make the most of their finances.
There are many resources available to help Christians and businesses manage money effectively for long-term growth. The purpose of a well thought out plan is secure finances for the future. Every person who invests in a solid financial plan will benefit if the plan is not aborted but carried out as determined. Whether securing the services of a professional or handing finances individually, planning for the future is crucial to less worry and concern spent today. "Take therefore no thought for the morrow: for the morrow shall take thought for the things of itself. Sufficient unto the day is the evil thereof." (Matthew 6:34)