January 14, 2001

CCCS Can Help

Ease Credit Woes

‘Twas the night before Christmas

and all through the store,

the people were shopping and buying galore,

charging and charging with all of their might

so they could have gifts to hand out That Night…

A month after Christmas the bills hit their door.

They saw what they owed, and ‘bout hit the floor….

(“The Plight Before Christmas,” Money Management International)

Did you go overboard in December?   When you open your wallet, do moths fly out?   Andy McKinney knows the signs.  Too much money spent, credit cards maxed out, and by February the bills are pouring in.  “People can lose sight of how much they spent during the holidays, and when the January bills hit, that’s when they have that ‘Omigod’ moment when they realize there’s not enough money there,” said McKinney.  And that’s when McKinney’s phone starts ringing.  McKinney is a counselor at Consumer Credit Counseling Service of Huntington, which he calls the city’s best kept secret.  CCCS is a non-profit agency that is part of the National Federation of Consumer Credit Counseling.  CCCS is a member of the United Way and receives funding from the community and from creditors. 

“We help anyone who is having trouble managing their monthly budget,” says McKinney. “Overspending affects all income groups, and all incomes,” said McKinney.  “There is no one group or class that is immune.”

“Usually, people wait until they are in a crisis state and have maxed out their credit cards,” said McKinney.  “But they’re better off coming in earlier.” 

The first step toward financial health is to recognize there is a problem.  “Some people make a financial decision by not doing anything at all,” said McKinney.  “By doing that, they’re abdicating responsibility to themselves.”  They ignore bills and bill collectors while the problem becomes worse.  American Express has published a checklist for how to tell if you have financial problems:

Do you have to borrow to pay current bills?

Are you frequently late paying your bills?

Can’t avoid using credit?

Are you being contacted by bill collectors?

“No doubt about it, more people are losing control because of credit cards,” said McKinney.  “But the scary part is that most people don’t recognize it.  Most people don’t realize how much they’re spending because it’s invisible.  They’re spending $200 a month but only paying the $60 minimum.”

McKinney says the second step is to get help.  To get assistance from CCCS call  522-4321 or 888-534-4387.  CCCS will send out an application package and a financial assessment package that must be completed before an appointment could be scheduled.  ‘That’s the hardest part,” said McKinney.  “It’s ironic how many people call for the application, then won’t make an appointment.  It’s a defensive mechanism.  People believe, ‘if I don’t deal with it, maybe it will go away.’”  He says people also find it difficult to admit to someone that there is a problem.  “It’s thinking about sitting down with a total stranger and saying, ‘look what I’ve done to myself,’” said McKinney.  “People are concerned about being judged.”

He says that’s what CCCS counselors don’t do.  “We provide an opportunity for someone to sit down and be objective.  We don’t tell people what they need to do,” said McKinney.  “We simply help them see where they are, and start them talking about options.”

The third step is to make a financial plan.  Decide how much of your income will be allocated to expenses.  Look ahead toward the rest of the year and budget for the new car purchase, insurance payments and any other budget buster that might come along.  “That’s the real benefit of a spending plan,” said McKinney, “It helps you make good decisions that are not based on emotion.”  McKinney suggests taking an index card with you every day and writing down all the money that is spent.  “Don’t use a notebook, because you’re tempted to write down phone numbers and other information,” said McKinney.  In the evening, transfer your figures to a summary sheet and at the end of the month, total everything up.  What is the one expense that consumers trying to get rid of  debt will cut first?  Movies?  Clothing?  McKinney says most people will cut back on grocery expenses.  He says everything should receive a second look, from automobile expenses to vacation plans.

McKinney says some consumers are disappointed that CCCS doesn’t step in and manage the situation.  “Sometimes you get the sense that people want to know what you will do, but it’s something the consumer has to do for themselves.  Only two things can take care of financial problems – time and money.”  CCCS will provide the information consumers need to handle financial problems and help set up a monthly financial plan.

And what can you do now to make sure that you won’t face the nightmare before Christmas again?  Money  Management International suggests:

Review your budget.

Put off some gift giving until after the holidays.

Give gifts of service.

If finances are tight, shrink the gift list.

Have everyone in the family agree on price limits.

Give one gift to each household.

Start thinking of appropriate gifts early in the year.

Above all, don’t be afraid of getting control of your spending.   “Credit has to be used as a tool and managed effectively,” said McKinney, “but you can’t become a slave to it.”

www.nfcc.com

National Federation of Consumer Credit Counseling.