Tag Archives: debt-management program

Consult A Financial Planner To Plan For Your Retirement

Credit counseling is not the same as a debt-management program.

If you’re like many other people, you make decent money, but still don’t have enough and can’t understand why. Credit counseling can help you create a budget, make steady payments and offers education. A debt-management program (DMP) actually handles the payments for you. All you have to do is pay one monthly bill, but these only benefit 35% of people who call counselors.

Credit counselors don’t cut your bill in half.

If you missed the last two monthly $200 bills, you’re going to owe $600 next month. A DMP agent can re-age that boll back down to $200, but you didn’t save anything. If you’ve never missed a payment, you’ll save on interest, but by no means will you save 50%.  

If an interest rate looks too good to be true, it is.

The best home equity lines are quoted in the range between the prime interest rate minus 75 basis points and plus 2 percent. Lower rates are just advertised to top search engine lists.  

If an agency claims to negotiate lower payments than others, they’re damaging your credit.

DMPs do not negotiate lower payments; their strategy is to hold your money until creditors agree to accept pennies on the dollar. They make a profit while your credit score takes a beating.  Debt-consolidation is not always going to save you money.

Financing without out-of-pocket expenses is not necessarily a better option because those fees are just being rolled into your monthly payments.

When deciding if debt-consolidation is for you, compare your existing minimum payments to what they would be for the same debt under the DMP, including fees and contributions. If you are not saving 5-10%, it’s the wrong choice.  

Debt-management programs will not always help your credit.

Explore a home equity line of credit as an alternative to a DMP if you have great credit. Conversely, if you’ve already missed payments, credit counseling might not make your credit worse, in which case it can only help. This is when DMPs are most beneficial.  

Planning for your retirement

The bottom line is that there are a ton of programs out there that will peak your interest and will be presented as ways for you to protect your investments, but in order to know which one is right for you, you need someone who understands what all of these programs are about. Financial planners are experts in the retirement planning process and we know how to navigate these difficult waters so that you can make the right choices to secure your financial future. So consult a local financial planner for more information on how they can help guide you towards your retirement.

Part of the retirement planning process is making sure that you have a sound tax strategy which is critical to ensuring that your income will last throughout your retirement years. A financial planner should understand how important this process is. Let them show you how carried interest can become a sound piece of your retirement plan.

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If you live in the Seattle, Washington area are are looking to find out more about planning for your retirement, then consult a Seattle, WA financial planner.