Money Management & Counseling

Money management is a learned skill, and the Federal Trade Commission (FTC) website advises that help is available through nonprofit credit counseling companies if you need assistance. Voluntary counseling builds skills and also gives you options if you have serious debt management issues. You have no choice if you file for bankruptcy, which has a counseling requirement.

Services

Many nonprofit counseling firms offer both group and one-on-one money management assistance. These companies typically have educational materials on their websites, and some hold classes and seminars on making a budget, getting out of debt and similar topics. Counselors also do individual sessions if you need more personalized help. You discuss your current money situation and the counselor assesses it and gives recommendations, according to the FTC.

Finding Help

The Better Business Bureau website recommends evaluating several credit counseling firms before choosing one to help you with money management. The National Foundation for Credit Counseling and the Association of Independent Consumer Credit Counseling Agencies are professional organizations that offer referral databases. Ask about fees and make sure the firm you choose gives written contracts. Legitimate firms are licensed and employ trained and certified counselors. Nonprofit status does not guarantee that a firm is reputable, according to the FTC.

Warning

You may need to get into a debt management plan if your finances are in seriously bad shape. Such plans are administered by credit counselors, who are often able to negotiate on-time status for your credit reports, the lowering of interest and the elimination of accumulated late fees, according to Ray Martin of CBSNews.com. They are often beneficial, but Martin warns that some counselors push the plans rather than simple money management alternatives because their firms collect a fee from each monthly payment. Beware of counseling that focuses on payment plans rather than exploring all of your alternatives.

Considerations

You may end up filing bankruptcy if other money management efforts fail, and the FTC advises that counseling is a legally required part of the process. Federal law makes you get counseling from an approved provider before you file. Then you must take budget training before your bankruptcy is considered final. You must use a government-approved counselor, and the fee for both sessions is waived if you cannot afford it. The first counseling session ensures you know other options before you commit to bankruptcy, and the second session teaches money management skills to help you stay on track after your bankruptcy.