Are you a Veteran? Veterans Affairs Canada estimates that there were almost 640,000 Veterans in Canada as of March 31, 2019. While the military certainly teaches you essential skills on the battlefield, financial skills is an area you may be lacking in. For example, do you have a poor credit score? That’s where credit counselling may come in handy.
In this article we’ll look at what is credit counselling, managing a lump sum payment and managing debt for Veterans.
What is Credit Counselling?
Credit counselling helps you better manage your finances through financial education and debt reduction strategies. Whether you’re part of the active duty military or Veteran affairs, it can help with your personal finances. Credit counselling is offered by non-profit organizations. The goal is to put you in a better financial situation than you started.
Credit counselling isn’t an instant solution. It can help with money management, but it takes time and commitment. A credit counsellor will sit down with you and come up with solutions to your financial problems. The credit counsellor will also work directly with creditors on your behalf.
It’s a good idea to work with a credit counsellor who specializes in providing credit counselling for Veterans or is at the very least familiar with the financial programs offered to Veterans. By taking advantage of financial counseling today, you can help get your finances back on track sooner.
Managing Your Lump Sum Payment
Are you an active or past military service member and you’ve received a lump sum payout from Veterans Affairs Canada? If so, here are some tips to better manage your finances.
Consider Your Goals and Needs
Take some time to consider how you want to use the lump sum payout. Think about your immediate needs versus your goals in the future. If you have any high interest debt, you might want to consider paying it off. Otherwise, you can always save the money for a rainy day.
While you make up your mind, you can keep your money in a safe place and earn a decent interest rate too. A high-interest savings account or Guaranteed Investment Certificate is a good place to keep it until you decide what you’d like to do.
Get a Second Opinion
If you receive a large sum of money it’s probably wise to seek out assistance. A financial professional, more specifically a financial advisor or financial planner, will help provide you with the guidance you’re looking for.
When looking for the ideal financial professional, you’ll want to inquire about the types of services and products they offer, how they are paid (i.e. a salary or commission), what are the fees and costs associated with working with them and what are their financial designations.
Once you have all of this information in hand, you can interview a few financial professionals and make a decision about which one you want to work with.
Are you a military member or part of a military family with debt? Here are a couple ways you can better manage your current debt situation.
Debt Consolidation Loan
If you have high-interest debt, you might think about taking out a debt consolidation loan. With a debt consolidation loan, all your high-interest debt is rolled into a single loan with one monthly payment. Not only is it convenient to only have to make one payment, it can save you money since the debt consolidation loan is almost always at a lower interest rate than the debts you were previously paying.
To take full advantage of your debt consolidation loan, use it to pay off your debts sooner. Whatever you do, don’t let you debts grow after taking one out.
Debt Management Plan
If you feel like you aren’t able to handle your debt on your own, that’s when a debt management plan is worth considering.
A debt management plan is a repayment plan for credit card debt. You can enroll in a debt management plan with a certified credit counsellor. The certified credit counsellor will review your financial situation to make sure a debt management plan is right for you.
A debt management plan is similar to a debt consolidation loan, except with a key difference. Unlike a debt consolidation loan, you still owe the original amounts to your creditors. Your credit counsellor is mainly there to come up with a repayment schedule that works with your budget.
Are you interested in learning more about credit counselling for Veterans? Call us today for a free debt consultation tailored to your own personal financial situation.