Counselling. It’s not really dinner party conversation, is it? “How have you been, Fred?” “Things are going really well, Stewart! I’ve just signed up for counselling and I’m really excited to spend my time and money going over personal, private matters with a complete stranger. Pass me the bread, would ya?”
All kidding aside, significant progress is being made toward increasing the acceptance and positive perception of counselling in all its forms. Though we may not jump at the chance to share our need for or experience with counselling, it’s certainly not something of which to be ashamed.
This particular article will discuss credit counselling, which is simply the process of consulting with an expert to get advice and assistance solving debt issues. Credit counsellors are there to fix your current financial problems which, in most cases, is overwhelming debt. They also ensure you’ll never find yourself in such a situation again by teaching money management skills that will last you a lifetime. Oh, and by the way, it’s free.
So relax, sit back, don’t be nervous and, actually DO pass that bread. We are going to go over some of the most common credit counselling myths in case you were on the fence or just want some good dinner party topics.
"My Situation is Too Far Gone"
This myth is pretty common. Sometimes people just get to a point where it all feels like it’s too much to handle and that they can't be helped. Once the bills and responsibilities start to pile up (literally and figuratively), it can feel extremely overwhelming.
While addressing your problems early on is ideal, it's never too late to address the state of your debt. Talking with a credit counselling professional can help you take an honest look at your situation, and help you with insights you may have never come up with yourself.
You are never too far gone, though it may feel that way. Regardless of the amount of debt you’ve incurred or your age, living situation or marital status, you’re not in it alone. In fact, over the years many Canadians have fallen into more debt than ever. According to Statistics Canada, the average household owe more than $1.50 for every dollar of disposable income. Because of this, many people carry the misconception there’s no way they can live without relying on credit, but if you can't pay it off, you can quickly get into a downward spiral of repayments, while never actually catching up.
Some people also are concerned with their credit being pulled or examined as part of the credit counselling process. But not taking a look at your overall credit is like trying to drive with your eyes closed: you need to know where you're at and where you’re going to determine the best path forward.
"People Will Look At Me Differently"
Stigma is a powerful thing, especially for something like personal credit. For some people, the fear is that either professional credit counsellors or other people will look at them differently if they know what their struggles are.
This is a myth. The people who really matter will see you as the intelligent and responsible person you are for realizing you need help and taking the correct steps to fix your situation!
As for the fear of a financial professional judging you, remember, it's their job to help. (Do you care what your doctor might think of you when you're sick?) Counsellors aren’t men or women in stuffy business suits — in fact, you’ll find they’re rather down-to-earth! They've seen other clients before you, and they will see many, many others after. Their role isn't to pass judgment; it’s to use their expertise to look at your situation and help you find a solution that works for you, long-term. No need to feel embarrassed, either, because this happens to way more people than you think. Dealing with debt is completely normal, and speaking with a professional is the right call if you don’t know what to do!
“I’ll Look Stupid if I Don’t Know How to Budget”
Many people assume that everyone knows how to budget and how to keep their finances under control, but that couldn’t be more of a myth. Personal debt levels for Canadians are at an all-time high, which has brought challenges for many people and their families when it comes to budgeting. Plus, most household budgets don't take into account debt repayments on credit cards or student loans, so any extra cash you think you might have usually gets eaten up by these payments.
With these mounting expenses, it can be daunting to figure out how to allocate your income, especially if you have a prom dress to pay for or an unexpected car repair. Credit counsellors work with you to note all of your expenses and construct a realistic budget to help you save money and get out from under the crushing debt. It’s not embarrassing — it’s being smart about your financial future.
“I Can’t Live Without a Credit Card”
At one time or another, someone’s probably told you, “You need a credit card.” You guessed it: That’s also a myth. While having a credit card in your wallet can feel like a security blanket, if you don’t have the means to pay those expenses off, interest builds and getting trapped in a vicious debt cycle becomes all too easy.
Credit cards can be very dangerous because of their high interest rates, coupled with the “I’ll pay it back later” syndrome. For frivolous spenders, a credit card spells trouble — especially if you’re not being realistic about your expenses and what you can realistically buy and pay off in accordance with the card’s stipulations.
Here’s an example to help dispell the myth of “needing” a credit card:
"Brenda" is an 80 year-old woman who came in for a credit counselling session with one of our counsellors. She had racked-up a ton of debt with a credit card her son told her she needed, in case she ever wanted to rent a car. But when the counsellor asked Brenda when was the last time she rented a car was, she quickly answered never. By bringing this point to light, it became very clear to Brenda that she really didn't need a credit card, and all it was doing was pushing her further and further into debt.
"I'm Too Old (Or Too Young) For Credit Counselling"
Many people think that now is the “wrong time” in their life to consider credit counselling. For some people, they think they're “too young” and have time to fix it themselves, while others think they're "too old" or too fargone in debt to repair their credit. The truth is there is no wrong age or time for credit counselling. Since it's a process that's customized for the individuals it services, credit counselling takes into account things like age, social situation, and future goals, whether it's buying a home or preparing for retirement.
"I Make Too Much (Or Not Enough) Money For Credit Counselling"
There's no direct correlation between what kind of job you have or how much money you make and whether or not you need debt help. There's also no direct correlation between your credit report and score, and how much money you make. There's a portion of your credit score that's related to paying your bills on time (which you of course need money to do), and having a high-paying job will certainly look good if you're talking to a lender, but we've had clients from all walks of life, from doctors, lawyers, professional athletes and actors, to people on social assistance. Debt doesn't discriminate and anyone can run into debt and credit trouble.
Credit Counselling Help is Available
Change isn't always easy and can sometimes be unpleasant. However, having a problem or blemish on your credit report can often feel worse. It’s very common for people who have sought professional credit counselling to express feelings of great relief. They also report to sleep better at night and enjoy happier lives.
While credit counselling isn't a silver bullet for credit problems, it starts with a plan. Don't let these myths hold you back from the kind of future you'd like to have. A debt-free life is possible. Feel free to start the conversation and speak with one of our certified credit counsellors — it won't cost you a thing and it will be time well spent.