Personal Financial Liability Needs Professional Treatment, Not Advice

I contribute a monthly column to a website frequented by financial advisers, benefits providers and insurance professionals.  In an upcoming article I urge these colleagues to take heed of the changing needs of Americans in the 21st century: too many families are depleting their future earnings by buying homes, cars and the latest consumer electronics beyonf their means. Less than a third of us have saved income equal to three months’ income. Think about that and how these families might deal with such emergencies as job loss or a medical crisis. 

Using credit cards, home equity loans and student loans to pay for the present while sacrificing financially secure futures and incurring enormous interest charges, families are setting themselves up as victims of a financial dustbowl.  All that hard-earned income and equity are being blown away.

People have no trouble consulting an attorney on legal matters, or relying on knowledgeable professionals for their insurance needs.  The airwaves are replete with 60s era music accompanying ads for professional financial planning and asset management services directed at baby boomers.

Yet it puzzles me that most folks, even if they are aware their financial liabilities, rarely consult an independent professional to deal with their debt problem in a comprehensive way. Many who are desperate fall prey to quick fix schemes like refinancing and debt consolidation, which only prolong their payback period and negatively impact their credit standing. Others consult “credit counselors” who are agents of the credit industry (a misnomer, since it should be called a “liability” industry). Seemingly your advocates, these firms only want to accelerate repayment since the card issuers have made hefty returns on the interest you already paid them.

 Now, it’s true, some individuals are doing all the research and are making progress in their own intensive (and time consuming) commitment to eliminate their personal liabilities.  I’ve even visited the blogs of some who are sharing their stories online. I commend them for their resourcefulness.

 Still, the average person has neither the time nor the knowledge and experience needed to address personal financial liability as part of a comprehensive system for orchestrating the optimal use of assets and income to methodically eliminate credit card debt, auto loans, mortgages and other obligations.  

 I’ve done my share of do-it-yourself home repairs. But sometimes you have to ask yourself whether several trips to Home Depot until you figure out the right fitting for a leaky faucet is time well spent, when you can just find an ad in the local paper for a plumber who claims there’s “no job too small”.  A leaky faucet is one thing; but managing a liability portfolio that drains away your hard-earned money is not a do-it-yourself job for most people.



About debtonator
I am affiliated with a company that is developing a unique liability portfolio management solution to help consumers systematically eliminate their debt.

4 Responses to Personal Financial Liability Needs Professional Treatment, Not Advice

  1. Marc says:

    I enjoyed reading your article immensely. It is true that America is overspending in the present at the sacrifice of its collective future. I believe that money management should begin early in our school system. This is an area that would benefit more families.

    You might want to take a look at my website when you get a minute. I have put together a number of articles on the subject of ways to manage consumer debt. Prevention is always the best course of action though.

    Thanks again for your insightful article.

  2. Kevin says:

    Debt consolidation can be really helpful – provided the reduced monthly payment and increase in disposable income does’t encourage new debt. Debt is often about discipline and ego.

    Debt Consolidation Advice – Free Report

  3. Neal says:

    Kevin, a band-aid can really be helpful too, provided the wound is cleaned thouroughly and the band-aid is left in place long enough to allow the wound to heal. As a responsible adult we understand this, but to a kid whose only mission for the next hour or two of his life is to get back to the activities that cause wounds, how realistic is it to expect the little patch to remain in place while Bobby slides into third or rolls around in the grass and mud? All little Bobby cares about after the wound is patched is to resume his frivolity and care free fun. Such is America today as it relates to debt -vs- the here and now.

    Debt consolidation is about lowering payments today so we can either survive or spend more tomorrow. Debt elimination is all about discipline and ego suppression; even if it means letting an expert help you get there.

    Do you know any debt consolidators who will stick with their client to manage their newfound cash flow bonanza after the loan closes? If not, the vast majority who choose this option will have more debt to deal with in one year, three years etc. They usually won’t even need anyone to encourage them, that will unfortunately happen on its own.

    Unless they can find that elusive discipline, or the assistance of a managed plan for that increase in disposable income; the consolidation just becomes a temporary bailout without the happy ending.

  4. Robforhq says:

    You have the natural advantage in creditor debt program settlement , which may be appropriate for debtors with …
    Great Solution

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: