A financial counselor assists individuals or couples in improving their personal financial management skills. A financial adviser, on the other hand, may provide some form of debt counseling, but generally provides clients with advice on investments, retirement funds, and insurance policies, among other things, and may earn a commission on these sales. A personal financial counselor typically does not sell investment opportunities and may work for a small fee or even for free for those who qualify.
A financial counselor will meet with a client first to get a better understanding of his or her financial situation. All relevant documents, such as bank statements, loan documents, credit card statements, tax information, and unpaid bills, should be brought by the client. The counselor will then use all of this data to calculate the client’s total debt as well as his or her net worth. A credit report check may be performed by the financial counselor to obtain information about your current credit score and credit history.
After all of this information has been gathered and analyzed, the financial counselor will most likely assist the client in developing a payment plan to pay bills; some counselors may even be able to contact creditors and work out a payment schedule if the customer agrees to stop using the credit card. The counselor may be able to advise clients on which bills to pay first; for example, to avoid wage garnishment, one should pay any government taxes first.
Debt consolidation is also common, in which a credit counselor contacts creditors to set up a payment schedule and then consolidates all debts into a single payment to the credit counselor rather than to each individual creditor. However, be wary of this option because it frequently necessitates the destruction of one’s credit in order to consolidate debt, and interest rates are frequently extremely high. If you want to consolidate your debts, go with a non-profit consumer credit counseling service rather than a for-profit company.
A financial counselor can work alone or as part of a larger financial counseling organization. It’s critical for financial counselors to build trusting and professional relationships with their clients so that they can refer others or return for more financial advice in the future. Many people find this career rewarding because it allows them to help others manage their finances and pay off debt.