Blog

Reduce “debt-stress” with a Debt Management Plan

Nani.Poulson@lssmn.org — Wed, 09 Sep 2026 18:58:07 +0000

Americans are increasingly “debt-stressed” — meaning that they have used more than 30% of their available credit limit and are highly likely to carry credit balance from month to month, according to a new analysis by Protect Borrowers and The Century Foundation.

Minnesota has one of the lowest numbers of debt-stressed households in the nation (23.7%). Still, growth in average credit card balances has increased by 12.5% since 2018, which means more of people’s paychecks are going toward credit card payments. Plus, rising costs and high interest rates are making it nearly impossible for credit card holders to move the needle on their debt. Tools like a Debt Management Plan (DMP) can make all the difference.

What is a Debt Management Plan?

A Debt Management Plan is an agreement you and your creditors make to pay off your outstanding debts. It combines your various credit card and unsecured loan payments into a single monthly payment. Nonprofit credit counseling agencies, including LSS Financial Counseling, offer DMPs.

How does a Debt Management Plan work?

You create the plan with one of our certified financial counselors to combine your credit card payments together into one easy payment. You then make that one payment to LSS Financial Counseling each month, and we send the funds to your creditors. Because you are paying through a nonprofit agency, many creditors will reduce interest rates, stop fees and sometimes lower your payments.

Typically, individuals who create a DMP pay off their debts in five years or less when they make on-time payments. This will reduce your overall payoff period and save you a lot of money in interest. We do charge a small monthly fee for this service; however, the significant interest savings you receive from the lower interest rates more than compensate for that fee.

A Debt Management Plan success

Jax was out of work for a while, and his credit card charges were adding up quickly. Now, he is on a Debt Management Plan that has dramatically decreased the interest rates on his credit cards, making it possible to reduce debt faster — even putting aside a small amount for savings. “I love it!” Jax said about his Debt Management Plan. “It’s relieved so much stress. I feel in control of my finances. I see an end in sight, and that brings me a lot of hope.”

We’re here for you

If you are facing debt, you are not alone. With small, consistent steps, you can gain the financial freedom that comes from paying down debt. Call 888.577.2227 today to schedule a confidential appointment with one of our trusted, nonjudgmental financial counselors.

Author Shannon Doyle is program manager for partnerships and education with LSS Financial Counseling.

Ten tips for back-to-school savings

Mike.Gude@lssmn.org — Thu, 13 Aug 2026 15:50:36 +0000

While summer is coming to an end, students are preparing to go back to class and are eager to show off their new school clothes and gear. However, buying their clothes and supplies doesn’t have to break the bank. Here are several ideas for back-to-school savings.

1) Determine what you need

Take inventory of the school supplies you already have and your children’s clothes that still fit. Get the list of the supplies that the teacher requires or recommends. Determine if anything else is needed, then create your shopping list and a budget for how much you plan to spend.

2) Get your children’s input — up to a point

Some kids have strong opinions about what they want to wear. Before you put together your list, ask them what their favorite outfits are and why. This can help avoid early morning arguments later when they get ready for school.

At the same time, don’t let your kids pressure you to buy unnecessary or overly expensive items. In one NerdWallet survey, at least six in 10 parents say social media and friends influence their children about what to get for school, and parents get pressured to purchase them. Tell your children that you’re sticking to your list, you’re staying within your budget, and you can’t buy clothes for all of the latest trends. This not only keeps you from overspending; it teaches your kids a useful lesson in personal finance at the same time.

3) Use dollar and thrift stores

Dollar and thrift stores often sell high-quality school supplies at a fraction of the cost. Plus, they often have the same major name brands. Secondhand and consignment stores typically sell quality clothing, sporting equipment and musical instruments at much lower prices than retail stores. Like dollar stores, they have brand-name merchandise, too.

4) Comparison shop and search online for deals

Go online and see what different stores charge for the same products. Check for “end-of-summer” sales. Retail clothing chains usually offer deep discounts in late August/early September to make way for their fall clothing lines.

Price comparison sites can also help. You can see prices and information about similar products sold online or in stores. Websites that are rated highly in multiple reviews include Google Shopping, Slickdeals and Woot.

5) Ask for price matching

If you’re in one store and find a lower price for an item elsewhere, ask the customer service clerk about the store’s price-matching policies. You may be able to save money without shopping at another store. Price-matching policies can vary widely from one retailer to the next, but it never hurts to ask.

6) Buy supplies in bulk

There are certain school supplies that are necessities, like paper, pens and pencils. Purchasing these in large quantities creates a supply which can last the entire year.

If your child goes through clothes quickly — e.g., they are on a growth spurt or damage clothing easily through spills, heavy activity and the like — buy extra when they’re on sale so you’ll have replacements on hand.

7) Wait to buy some items

You don’t have to complete all your back-to-school shopping before the new school year begins. For instance, when purchasing fall and winter clothes, wait a few months into the school year when those items will be on sale.

If it’s difficult to afford everything on your list right now, only buy what your kid needs for the moment. Then wait until you run out or a new semester begins. While waiting, watch for sales, and set aside money in savings to spend when you need to replenish your child’s supplies.

8) Consider items that save money in the long run

Multiple, smaller notebooks often run out of paper before school ends. Instead, consider buying a hard-cover, three-ring binder with a set of dividers and filled with regular paper. It might help you avoid buying items — i.e., extra notebooks — that you didn’t expect to purchase.

Consider a waterproof backpack, too. Your kid’s backpack might fall in a puddle or a slushy pile of melting snow. A waterproof bag will protect its contents better and last longer than a less expensive model.

9) Avoid credit cards; pay with cash or a debit card

Paying with money you have now prevents you from building up debt that you’ll have to pay back in the following months. It also helps minimize unnecessary expenditures. When paying by cash, withdraw a limited amount of cash, and watch it decrease as you spend it. Physically parting with money helps you see exactly how much you spend and better control that spending.

If you must use credit cards, pay the balance off quickly — preferably in the same month your next statement arrives. Otherwise, the interest charges eat away at any savings you’ve otherwise gained.

10) Take back unused supplies

If you went over budget this year, see what items your child hasn’t used, doesn’t want to wear, or doesn’t need after all. See if stores will let you return those items.

Ask the store about refund and return policies at the time of purchase. Save any receipts that you might need. When shopping online, keep copies of your order number, the refund and return policies, shipping costs and warranties.

If you would like further tips and tools on budgeting for and managing back-to-school spending, our certified financial counselors are here for you. We also provide support on creating monthly budgets, taking control of expenses and tackling debt. Call 888.577.2227 to schedule a confidential appointment.

Author Dan Park is a financial counseling supervisor for LSS Financial Counseling.

What’s changed for student loans?

Mike.Gude@lssmn.org — Wed, 22 Jul 2026 21:04:44 +0000

If you have federal student loans, you’ve likely heard something about the changes that happened July 1, 2026. Here’s a breakdown of what has changed and how the changes might impact you.

If you are DONE borrowing student loans

This means no loan consolidations, no additional loans for new school and no Parent PLUS loans for your child. If this is true, then:

REALLY nothing changes for you. Payment plans stay the same, forgiveness options and timelines stay the same and if needed, any deferment/forbearance time left can also be used.

If you TAKE OUT NEW loans or consolidate after July 1, 2026

New loan limits come into play — these will include loans already taken out.
Repayment options will ONLY include the new Tiered Standard Payment Plan or the Repayment Assistance Plan (RAP) for all loans (see the tables below). This means that Income-Based, Income-Contingent, Pay As You Earn and the extended repayment plans will not be available for new borrowers.
Any consolidated loans will start at zero months for Public Service Loan Forgiveness (PSLF) and/or Income-Driven Repayment (IDR) forgiveness programs.

The new Tiered Standard Payment Plan

The only traditional plan available to new borrowers and the only plan available to parent borrowers.

Principal Balance	Payback Period	Count Toward Forgiveness?
Less than $25,000	10 years	Yes, but if you remain in the plan for the life of the loan, you will pay off the entire balance before receiving forgiveness.
$25,000-$49,999	15 years	No
$50,000-$99,999	20 years	No
More than $100,000	25 years	No

Table Source: Educational Debt Consumer Assistance Program

The Repayment Assistance Plan

Adjusted Gross Income (AGI $)	% AGI
$0-$10,000	0% (Minimum Payment = $10
$10,001-$20,000	1%
$20,001-$30,000	2%
$30,001-$40,000	3%
$40,001-$50,000	4%
$50,001-$60,000	5%
$60,001-$70,000	6%
$70,001-$80,000	7%
$80,001-$90,000	8%
$90,001-$100,000	9%
$100,001 +	10%

Table Source: Educational Debt Consumer Assistance Program

ACTIONS to take

If you are NOT planning to take out new loans, review the Federal Student Aid’s Repayment Calculator to ensure you are in the lowest plan available.
If you DO plan on taking out a new student loan, be sure to talk to the financial aid office of the higher education institution you plan on attending to discuss how the loan’s limits impact you and what that means for completing your desired degree.
Use the Federal Student Aid’s Repayment Calculator when NOT logged in to your account to determine what your repayment options will be based on the estimated amount of new loans added to current loans.
Compare projected loan payments to projected income (in your career field) to determine if the new income is really worth the cost of additional school/loan payments.

Support is available

Our certified student loan counselors are here to help. We can discuss the changes with you and the impact they might have on your student loan repayment journey.

To schedule a Student Loan Repayment Counseling appointment, call 888.577.2227. There is a $125 fee for this service.

Author April Sanderson is a certified financial counselor with LSS Financial Counseling.

First-time homebuyer? Here’s how to prepare

Mike.Gude@lssmn.org — Thu, 25 Jun 2026 19:06:51 +0000

If you’re thinking about purchasing your first home, there’s a lot to think about. While it might seem overwhelming, it’s also exciting. This blog will break down important steps to consider as a first-time homebuyer.

Start saving

For most homebuyers, a down payment is required to purchase a home. According to NerdWallet, lenders prefer 20% down. Keep in mind this can vary, depending on your credit, the type of home you’re purchasing and the purchase price. Therefore, it’s best to start saving up as much as possible for your down payment and closing costs. Will you need to hire movers, pay for storage or buy furniture? Be sure to think through all of the expenses that might pop up, and include those in your savings plan. Keep in mind there are benefits to a larger down payment, such as a lower monthly payment and/or lower interest rate and more equity in your home upon its purchase.

Buying a house takes both time and money, so be sure to start planning/saving early — likely years in advance.

Improve your credit

In order to obtain the lowest interest rate as possible, it's important to have a credit score of 700 or above, which is considered good. Having good credit is the difference maker in getting a prime mortgage with a lower interest rate. You should pull your credit report for free from all three credit reporting agencies at AnnualCreditReport.com. Be sure to review and fix any errors, get caught up and stay current on all of your bills, and take care of any unpaid collection accounts.

Pay down debt

A great way to improve your purchasing power along with your credit score is to pay down or pay off debt. Review your debts, and determine which to focus on. Try to make more than the minimum payment to pay them down/off faster. Not to mention, getting rid of a monthly payment will make your mortgage payment more affordable. You will need to determine if you can save for the down payment at the same time or if you should focus on paying down debt first.

Create a budget

In order to determine what you can afford for a mortgage payment, utilities and home upkeep, start by creating a realistic budget. Make sure that your budget includes all of your expenses, even ones that aren't monthly. This includes annual or semi-annual expenses such as vehicle tabs/maintenance, school clothes, holiday shopping/other gifts, taxes, insurance, memberships, veterinary visits, etc. A great way to help build savings is to reduce spending wherever possible. Just keep in mind that your end goal is buying your first house. This should help keep you motivated, even if it seems tough or not fun to reduce spending temporarily.

Determine your mortgage payment maximum

Now that you've created a realistic budget, remove your current housing expenses. What you have leftover will help you figure out what you can afford for your mortgage payment, home insurance and property taxes. Keep in mind that you should leave some room in your budget for savings, since you will be responsible for the upkeep/maintenance of your house.

A good guideline is to keep your housing costs to a maximum of 25%-28% of your net income. It's also smart to practice making your mortgage payment. When you know what you can afford, set aside the amount beyond what you're already paying in rent/housing costs now. It will help you see if you can really afford a higher mortgage payment.

Take a first-time homebuyer course

While taking a class might not be first on your list of homebuyer preparation tasks, homebuyer education provides you with helpful information so you can make the best decision for you and your family. Also, taking a first-time homebuyer course might help you qualify for special mortgages, down payment assistance or other help that can make homeownership more affordable. For Minnesotans, we offer the Framework Homeownership Course that complements our homeownership counseling. For all other states visit the U.S. Department of Housing and Urban Development’s (HUD) listing of homeownership/homebuyer programs.

Contact us for support

Buying a home is a big deal; it’s not something that can just be done overnight. The sooner you start planning and saving, the sooner you'll achieve your dream of homeownership.

Our HUD-certified housing counselors can provide advice, tools and support throughout the home purchasing process. If you live in Minnesota, call 888.577.2227 to schedule a confidential appointment.

Author Elaina Johannessen is program director for Debt Management Plan Operations with LSS Financial Counseling.

Behind on your mortgage? [options to help keep your home]

Mike.Gude@lssmn.org — Tue, 26 May 2026 19:56:27 +0000

Job loss, a reduction in income, separation from a significant other, an injury or other medical issues can greatly impact your ability to keep up on your mortgage payments. Missing payments can adversely affect your credit. Even worse, if you fall behind and cannot catch up, your lender can foreclose on your home. Fortunately, there are tools and remedies to help get you back on track.

Please note: None of the following information is legal advice. Be sure to consult with a reputable attorney regarding bankruptcy or other legal questions.

Dealing with your mortgage company

When you are behind on your mortgage payments or concerned about getting behind, you will likely deal with the following departments in your mortgage company.

Collections

If you start to miss payments, the collections department will be one of the first to contact you. This department generally has one goal only: collect the missed payments. Their representatives might reach out to you monthly by phone, mail and email to try and collect the missed payment(s). The collections department typically does not provide home retention options, though occasionally in smaller mortgage companies, that department might handle both.

Loss mitigation

This department will also likely contact you if you miss a mortgage payment. This is the department that can review your current financial situation and explore options to avoid foreclosure. You will often have more communication with loss mitigation than with collections, especially if you are trying to keep the home.

Even though the loss mitigation department is involved, collection activities often continue. You might wonder why collections is contacting you when you have been working with loss mitigation. Unfortunately, the two departments are not always on the same page, so until the mortgage is brought current, collection activities might continue. To get the most current and accurate information about your account, contact the loss mitigation department.

Options to help you keep your home

The options below are not available in every case. What is available to you will depend on:

Who the investor is in your mortgage (for example, whether it is a Federal Housing Administration [FHA] mortgage, a Veterans Administration mortgage, a private-investor mortgage, etc.).
Whether you have been behind on your payments and/or received an option before.
Whether you have been impacted by a natural disaster.
Other factors, such as your income and the equity you have in your home.

Below are the most common options we see for either temporary relief or helping people bring their mortgages current.

Forbearance

Forbearance is essentially a pause in mortgage payments. For example, if you face extended unemployment, an injury or another medically-related incident, you might be offered temporary relief from making payments until your situation changes. A forbearance is typically granted in three-month increments, but it can be just a month or two. In some cases, it can be extended for up to 12 months. During a forbearance, you are not required to make your payments, and your mortgage company cannot charge you late fees or move forward with foreclosure.

Forbearance is a temporary solution, meant to give you relief while you work to overcome a hardship. The delayed payments will have to be paid back eventually, sometimes in one lump sum. Therefore, it’s important to only agree to a forbearance if there is a plan for paying back the missed payments.

In some cases, a mortgage can be brought current through one of the following permanent options.

Repayment plan

This is an agreement between you and the mortgage company that spreads out the past due amount over a set period. If the repayment plan’s time frame is short, which most are, you will have to pay a considerable amount of money to cover both the normal monthly payment and the past-due amount.

For instance, let’s say your mortgage payment is $1,500, and you missed two payments: you now owe $3,000. If the mortgage company gives you three months to pay it back, your payment for those three months would be $2,500/month. Because this temporary increase in payments might not be affordable, repayment plans aren’t always a realistic option.

Partial claim or payment deferral

The term “partial claim” is unique to FHA loans, but conventional or other government-backed loans might offer a similar solution. A partial claim sets the past-due payments aside from the main mortgage into a zero-interest "junior lien" or second mortgage that gets deferred to the end of the first mortgage. The homeowner then has to pay this junior lien once the main mortgage is paid in full or refinanced, or if the property is sold. A payment deferral works in a similar way, but instead of becoming a second lien, the past-due payments are typically due as a one large, lump sum payment (called a balloon payment) when the mortgage matures.

Loan modification

A loan modification brings the mortgage current by financing the past-due payments back into the loan, and by stretching out the term of the loan to hopefully keep the payments affordable. This is the most common remedy that a mortgage company offers. Besides a change in the number of years you have to pay back the mortgage, other terms, such as your interest rate, can also change when your mortgage is modified. Unfortunately, if your interest rate is currently low and it goes up when your mortgage is modified, this can result in higher payments.

Don’t assume that you have the right to a modification if you fall behind on payments. A mortgage company is not obligated to modify a mortgage. In the original mortgage paperwork you sign at the closing, one of the first lines states, "I promise to pay." However, most mortgage companies do offer some sort of modification program, especially if this is your first time missing any payments.

Another note: If you’re able, you can pay the entire reinstatement amount (i.e., the past-due payments plus any late fees and foreclosure fees) at any time, and that will bring the mortgage current and prevent foreclosure. Make sure to get a "reinstatement quote" from your mortgage company that lists exactly how much you owe and the deadline date for paying the amount listed on the quote. If you reinstate the mortgage, the terms of the mortgage do not change, and you go back to making your regular monthly payments once the mortgage has been brought current.

Bankruptcy and affidavit of postponement as options

Filing bankruptcy can sometimes be a way to prevent foreclosure and bring your mortgage current. A bankruptcy filing temporarily puts in place an "automatic stay," and during that stay, you can’t be foreclosed on, evicted or sued. Additionally, when you file a Chapter 13 bankruptcy, you make monthly payments to a bankruptcy trustee over a three-to-five-year period. With a secured debt, such as a mortgage, you can pay back the arrears through these monthly trustee payments. During those three to five years, you would make both your regular mortgage payment plus a trustee payment each month, and then you would be caught up.

It’s important to keep in mind that bankruptcy is a complicated legal process, and LSS financial counselors cannot provide legal advice. If you are interested in filing bankruptcy, you will want to consult with a bankruptcy attorney.

If a Sheriff’s Sale is scheduled for your property and the property is your homestead, you might be able to postpone the Sheriff’s Sale by at least five months by filing a document called an affidavit of postponement with your county recorder’s office, your Sheriff’s office and the foreclosing law firm. The affidavit needs to be filed at least 15 days prior to the scheduled Sheriff's Sale date. Postponing the Sheriff’s Sale will shorten your redemption period (which follows the Sheriff’s Sale) to five weeks instead of the typical six months.

You can create the affidavit using LawHelp Minnesota’s website. Once you finish answering the questions on the website, it will give you detailed instructions on where to file the affidavit. Make sure that when you print the form, you do NOT print it double-sided, because it won't be accepted. Do not sign the form until you are in front of a notary. You will need to bring the Notice of Mortgage Foreclosure Sale with you to file. A few counties in Minnesota require that you bring a newspaper clipping advertising the sale; I encourage you to call the county recorder's office ahead of time to ask.

Get the support you need

The most important first step is for you to contact your mortgage company and ask about the tools listed above. Be prepared to be on hold for an extended period. Also, check out the mortgage company’s website for helpful information and links to apply for the above solutions directly online.

We are here to support Minnesota residents wanting to get their mortgage payments back on track. LSS Financial Counseling is accredited by the U.S. Department of Housing and Urban Development (HUD), and our certified, nonjudgmental foreclosure prevention counselors can explore your options and create an individualized plan with you. Call 888.577.2227 to schedule a free, foreclosure prevention counseling appointment.

If you’re outside of Minnesota, visit the U.S. Department of Housing and Urban Development’s website to find a local housing counseling organization. Keep in mind that all HUD-approved counseling is free. Never pay for help with your mortgage.

If you’d like assistance creating a realistic budget, building up savings or paying off debt LSS Financial Counseling can provide that support too, no matter what state you live in. Call 888.577.2227 to schedule an appointment.

Author Cassy Burr is a HUD-certified housing counselor with LSS Financial Counseling.

Car payments: Understanding loans, leasing and your budget

Mike.Gude@lssmn.org — Fri, 17 Apr 2026 15:29:29 +0000

Getting a car or vehicle is a big decision, and paying for it can be one of the biggest expenses in your budget. It can be a very stressful situation if you don’t know the ins and outs. First, you are faced with the question, do I lease or buy to own? Then, once you’ve found the car or vehicle that fits your (and your family’s) needs, you have to figure out how to pay for it.

In this blog, I’ll share information and tips to help understand and navigate the steps in getting and paying for your car or vehicle.

Lease vs. purchase

Leasing a vehicle means that you are essentially borrowing the vehicle from the dealership. You make monthly payments to use the vehicle and are responsible for the basic maintenance. Leased vehicles are generally new, so there is less to break down. If there is something major wrong with the car, you can take it to the dealership, and they will repair it. However, you are generally responsible for the day-to-day maintenance. Leasing a vehicle also might mean that you have a limit to the number of miles that you can put on the car during the term of your lease. If you drive a lot, you might have to pay additional money when you return the vehicle at the end of your lease. Also, when you return the vehicle, you will not get any money back that you paid for it. You have no ownership unless you choose to buy out your lease.

Purchasing your vehicle means that it is yours (and the bank’s if you have a loan), and you are responsible for all of the maintenance and repairs from day one. You can purchase a brand new car or a used vehicle. You will have unlimited mileage and can drive it as much or as little as you want. If you have a loan and eventually pay it off, you will own the car outright. It is yours to do with as you please until you are ready to purchase another vehicle.

Applying for a loan

If you are leasing a vehicle, the leasing company will provide the financing and set up the payments. You will pay the company until the term of the lease is complete.

If you are purchasing, you can pay for the vehicle outright with cash. If you are not able to do that, there are two ways to get financing: You can use the financing provided by a financing company the dealership works with, or you can secure your own financing. Securing your own financing would mean reaching out to a bank or credit union. If you decide to use the dealership’s financing, it is highly recommended that you do not allow them to send your application out to multiple financing companies. While they could be looking for the best interest rate and payments for you, every time your application for a loan is processed, a finance company pulls your credit report (called a “hard pull”), and your credit score might be negatively affected. This is important because your credit score is a major factor in how high your loan interest rate will be.

Whether you finance a vehicle through the dealership or a bank or purchase the car outright with cash, be aware that there are costs, fees and service charges that will be added to the purchase price. These include title transfer, sales tax, licensing fees and more. If you purchase an extended warranty for a vehicle, that will be added on as well.

Make sure that you read and understand every document you are signing. Also, make sure that you can afford the final payment. Some lenders or sales agents might try to rush you along and might paraphrase what the documents say. It is important that you understand completely what you are signing. These are legal documents!

Once you sign your loan and the keys are in your hands, be sure that you make all your loan/lease payments on or before the day that they are due. If you are late or miss a payment, the bank or dealership can impose additional fees or even repossess the vehicle.

Loan payments

Car loan payments are usually made monthly and include two parts: principal, which is the amount you borrowed, and interest, which is what the lender charges to loan you the money. Early in the loan, a bigger share of your payment goes toward interest. As time goes on, more of each payment goes toward paying down the principal. This gradual shift is called amortization.

Most auto loans have a fixed payment amount that stays the same throughout the loan, and payments are typically due once a month on the same date. Lenders usually offer several ways to pay, including online payments, phone or mail options, and automatic withdrawals. Using autopay can make payments easier to manage, reduce the chance of paying late and sometimes even qualify you for a small interest rate discount.

Paying off a car loan early can be a smart financial move. However, some loans include prepayment penalties, which are fees for paying off the loan ahead of schedule. These are less common today, but they can still exist, so confirming with your lender is important. Most auto loans use simple interest, which works in your favor — when you pay early, you cut down on the total interest you owe.

Once your loan is fully paid off, ask the lender for a lien release to show you officially own the vehicle free and clear. Be sure to keep proof of payoff with your records, as you might need it when selling the car or updating the title. Congratulations! Your car is now yours!

Budgeting for car payments

When setting aside money to pay for a car, start with what fits your monthly budget — not the car you’re approved for. A good guideline is to keep your car payment around 10-15% of your take‑home pay and all car costs (payment, insurance, gas, maintenance and fees) under 20%.

Decide on a comfortable monthly payment first, then work backward to find a realistic vehicle price based on your loan term, interest rate and any down payment or trade‑in. Be sure to check insurance costs before buying, since they can significantly affect affordability.

Leave room in your budget for unexpected costs and changes in income. Remember that it’s okay to pause or walk away from a potential purchase; choosing a car you can truly afford helps protect your financial stability and peace of mind.

If you are looking for ways to make your car payments affordable, our certified financial counselors can help. They provide advice, tools and support on creating workable budgets, paying down existing debt and improving your credit — so you can get the best interest rate possible on your car loan. Call 888.577.2227 to schedule a free, confidential Budget & Debt Management Counseling appointment.

Author Jennifer March is a certified financial counselor with LSS Financial Counseling.

Refresh your finances during Financial Literacy Month

Nani.Poulson@lssmn.org — Tue, 14 Apr 2026 19:28:35 +0000

April arrives with longer days, blooming trees, and a natural sense of renewal — making it the perfect time to give your finances a fresh start. Because April is Financial Literacy Month, it’s an ideal time to check in on your financial health and plant the seeds for long term stability. Here are some tips to get started.

Start with reviewing your budget

Just like spring cleaning your home, reviewing your budget helps clear away some costs you may no longer need. The most important tool you have to maintain day-to-day financial wellness is a realistic budget. If the money coming in is more than your money going out, then you are in good shape. Compare your income and expenses and see if there are any areas you can trim spending.

Some ideas to help trim are to shop at grocery stores that offer the best value, take advantage of free reward programs such as gas rewards, cut non-essentials and spend less on wants like entertainment, dining out, travel and gifts. You might be surprised how small tweaks in your personal budget can have a big impact on your bottom line. If you are new to budgeting, start by simply tracking your spending.

Strengthen your savings

A solid savings plan is like sunshine for your financial garden. It might seem nearly impossible to set aside money into emergency savings, but if you treat savings like a priority in your budget, you will watch it grow.

One way to get started is by automating savings from your paycheck. There is no right or wrong amount to save. In fact, it will likely vary from person to person. A good goal is to have three to six months’ worth of savings in case of a job loss, injury or illness, income reduction, or large, unexpected expense. Savings is crucial to avoid going into debt should something like that happen.

Review your income and expenses to see how much you can afford to contribute to savings each pay period. Whether it’s $10, $25, $50 or $100, something is better than nothing! If needed, consider taking on a renter, second job or side hustle to build your savings.

Tackle debt

With the combination of rising costs and high credit card interest rates hovering around 35.99 percent, it may be difficult right now to make any headway on reducing debt balances. If debt feels overwhelming, consider exploring options like a debt management plan (DMP). A DMP can help reduce interest substantially, sometimes down to zero, which means you’ll pay down debt much faster.

We are here to assist

Let this season be your reminder: with a little attention and steady care, your finances can flourish. Not sure where to start? Our certified financial counselors are here to walk alongside you. They offer nonjudgmental, confidential support with budget planning, getting started with a debt management plan, credit improvement and much more. Call 888.577.2227 to schedule an appointment.

Author Elaina Johannessen is program director for Debt Management Plan Operations with LSS Financial Counseling.

Ways to use your tax refund to get ahead this year

Mike.Gude@lssmn.org — Fri, 13 Mar 2026 19:27:18 +0000

For folks who get a substantial tax refund, it’s exciting and many of us don’t want to spend it on “boring” things. Instead, you might want to treat yourself to a trip or buy a big-ticket item you’ve wanted for a while. While this obviously sounds appealing, it’s financially savvy to use your refund to set yourself up for financial success. Here are tips to help you get ahead financially this year.

1) Get current on past due bills

Being behind on bills can cause a lot of undue stress on people. Are you behind on any debt payments, like a mortgage, car loan, student loan or credit card? Are your utilities current on payments? If not, using your tax refund is a great way to play catch up and relieve stress, as late fees and collection calls should stop.

2) Pay down/off debt

Do you have any credit cards or loans? You could take the opportunity to pay off one of your debts using your tax refund. It can make a huge difference in your monthly budget, as paying off a debt will eliminate a monthly payment. Without that payment, think of the breathing room in your budget that you will create.

3) Make needed repairs

Home and car maintenance can sometimes take the back burner with everything else we have to pay for. When is the last time you changed the oil, air filter, etc.? Do you need new tires? Many repair and maintenance procedures are designed to provide optimal fuel efficiency, which can greatly reduce monthly gasoline costs and the potential for larger (and more expensive) repairs down the road. Or, regarding your home, is there an appliance on its last legs? Are there other repairs you’ve been meaning to get to? Fixing small problems now, before they create larger problems, might save you thousands of dollars in the long run.

4) Save, save, save

Many Americans rely on credit if there is an emergency expense that they have to pay for. If you don’t have a current emergency, think about using your tax refund to establish emergency savings. A good goal is at least three months’ worth of expenses. While that seems daunting, your tax refund can give it a nice kick start. Then aim to set aside money monthly or from each paycheck into savings.

If you already have emergency savings ready to go, think about using your tax refund to start saving for retirement. Saving a little now will allow for less frantic saving when you are older.

5) Treat yourself (smartly)

If you're caught up on bills and have money in emergency and retirement savings, you have a bit more leeway. Is there a trip you have been dreaming of taking with the family? Instead of charging the trip expenses, use your tax refund to pay for them instead. If you’re not expecting enough for a trip, start saving toward that goal. Or, think about ways that you can make next year more affordable. If you buy a lot of birthday or holiday gifts, or if you have kids in sports or other activities with fees, you could start saving toward those.

Bonus tip

If you are playing catch up on bills and receive a large refund every year, there might be a better way to distribute your tax contributions. Check out the IRS website’s withholding estimator. You’ll need to answer some questions about income and your family situation. But keep in mind, if you reduce the amount you pay in taxes, it can provide a boost in your paychecks — hopefully allowing you to stay current on all your bills. Note: be sure to do this every January so you do not create a liability problem and have to pay in.

The key takeaway I hope everyone gets from this blog is to set yourself up for success with your tax refund. But also, do remember to sprinkle in a little fun and treat yourself (if it’s feasible) with something small like dinner and a movie or a new outfit.

Want some more tips to improve your finances or pay down debt faster? Our trusted, nonjudgmental financial counselors can share tips and tools to create workable budgets, and they can explore options to pay off your debt. Call us today at 888.577.2227 to schedule your free, confidential budget and debt counseling appointment.

Author Elaina Johannessen is program director for Debt Management Plan Operations with LSS Financial Counseling.

Behind on federal student loan payments? [How to avoid default and get back on track]

Mike.Gude@lssmn.org — Fri, 27 Feb 2026 16:13:47 +0000

During the pandemic, the federal government paused student loan repayments. Student loan borrowers received temporary relief. Those pauses have ended, and borrowers who were behind on payments (that is, delinquent) or in default now face challenges getting their payments back on track or bringing their loans into good standing.

If making federal student loan payments is difficult for you, it’s important to understand your individual situation and know your options so you can get your loans back on track and avoid default. This blog is designed to help you do this.

Delinquency vs. default

Delinquency and default are not the same. The first day you miss a payment, your loan becomes delinquent; after 270 days of being delinquent, Federal Direct Loans will go into default.

Before a loan goes into default — and you realize that your payments are due but unaffordable — you have a couple of options. First, call your loan servicer to let them know you realize you are behind, and ask for a forbearance (that is, a temporary pause in payments) to get caught up. This means you can avoid having to pay the past due amount and brings the loan current, but it does not change the amount due for the next month. If you cannot afford the monthly payments on a regular basis, use the Federal Student Aid Loan Simulator to see if you are in the lowest payment plan possible. You can also apply for that payment plan when using the loan simulator.

If your loans go into default, there are many consequences:

The total amount of the loan and any outstanding interest are due.
A collection fee is added to the balance and cannot be taken off.
The U.S. Department of Education can take collection actions, which include capturing tax refunds or garnishing wages (without having to take any legal action against you).
You are unable to obtain new financial aid if you go back to school.
Your credit reports show defaulted loans, which will have a major negative impact on your credit score.

Options to get loans out of default

There are two options to get Federal Student Loans out of default; you can either consolidate or rehabilitate the loans. Currently, both of these options can be done once.

Consolidation combines defaulted loans into one new loan that is in good standing. This allows you to cure the default quickly, as it typically takes two to three months for the consolidation to go through. Be aware that this might reset the time earned on defaulted loans that count toward forgiveness programs.

Rehabilitation applies to each individual defaulted loan, keeping the loans as they were prior to the default. This allows you to retain the time earned toward forgiveness programs. A rehabilitation program requires nine payments during a 10-month period. The borrower has to negotiate a “reasonable and affordable” payment with the U.S. Department of Education’s collection division, which is called the Default Resolution Group. This process is not completed, though, until the loans are issued to a new servicer.

Ensuring affordability

Know what your goal is for your student loans. Are you hoping to pay them off or just keep them affordable each month? Usually, these two goals result in completely different payments. Working to pay off the loans might result in a much higher payment. Generally speaking, an Income Driven Repayment plan can create very low payment. However, it might result in the student loan balance growing, as the payment can be less than interest — which means you’ll be paying on the loans much longer, possibly into retirement. Income Driven Repayment plans offer forgiveness, but they usually take 20-30 years of payments to reach that forgiveness.

Typically, you are unable to have both a low payment and a short repayment term. Know which one you want and which is reasonable in your budget. If you want to pay the loans off and this requires a higher payment, ask yourself: Are you able to make changes elsewhere in the budget to ensure this is affordable? If you want a low payment, be sure that you are also willing to have the loan payment continue for 25-30 years.

Support is available

Our certified student loan counselors are here to help. We will walk through your overall finances and repayment options with you to help you know exactly how the payments fit into your budget and discuss your goals for the loans. Our financial counselors will also explore whether you are eligible for different loan forgiveness and loan discharge options.

Learn more about our student loan debt services. To schedule an appointment, call 888.577.2227. Note: there is $125 fee for our student loan service.

Author April Sanderson is a certified financial counselor with LSS Financial Counseling.

Credit report vs. credit score. [What’s the difference?]

Mike.Gude@lssmn.org — Thu, 05 Feb 2026 22:48:44 +0000

“Credit” is a complicated word. It can refer to debt. We can also take out a line of credit, get a credit card, pull our credit report, and review our credit score. We’ve got to love the English language, right?

In this blog post, I’m going to cover the difference between your credit report and your credit score.

Credit report

A credit report is a comprehensive view of a person’s credit usage and history. But what does that mean? Let’s break it down.

There are three credit bureaus: Experian, TransUnion and Equifax. They collect information — both good or bad — from lenders about our credit history and current usage. This can include credit cards, car loans, mortgages, student loans, judgments, bankruptcy and foreclosure. They also collect information regarding debts you’re making payments on (or maybe haven’t been able to pay). That all goes into your credit “pot,” so to speak. Therefore, if you’ve been on time with every payment, that reflects positively on your report. If you’ve missed payments or made late payments, it reflects negatively.

Your credit report includes things like credit cards, secured and unsecured loans and unpaid debts that have gone to collections. Because every credit report is individualized, no one can predict exactly how your score is affected if you miss a payment.

What goes into your credit usage and history is all lumped together to come up with — yep, you guessed it — your credit score.

Credit score

So, what is factored into your credit score? For our purposes, I’ll be referring to the most generally accepted credit score by lenders, which is the FICO score. The FICO score was created by the Fair Isaac Corporation, and it is the most common credit scoring system used. FICO scores range from 300 to 850. The higher your score, the better; ideally, keep working on improving your score until you reach 700 or higher. A lower score often results in paying more for the cost of credit and services; so, it is worthwhile to know what your credit score is, the factors that influence it, and the strategies you can use to improve your score.

See below for the five categories factored into the score.

The largest factor is Payment History, which makes up 35% of your credit score. Essentially this means that making on-time payments is the best thing you can do to improve your credit score or maintain a good score. Lenders are looking to see if you have consistently made payments on time.

Next up, is Amount Owed, which makes up 30% of your credit score, which includes debts with and without balances. If you tend to carry credit card balances and they’re nearing the borrowing limit, lenders will see that you are using a lot of your available credit, which to them means you are at a higher risk of missing payments/defaulting.

Length of Credit History makes up 15% of your credit score. The longer accounts have been open, the more likely that will help your score. However, credit history looks at the age of your accounts — new and old — and how long it has been since you used certain accounts.

Credit Mix makes up 10% of your credit score. Having a variety of accounts (installment loan, mortgage, retail account, credit card, etc.) is better for your score. For instance, if the only item on your credit report is one credit card, that’s likely negatively affecting your score because of the lack of “mix.” However, it’s not necessary to have one of each type of account, and again, this only makes up 10% of your score.

Finally, New Credit makes up 10% of your credit score. Simply put, opening too many new accounts in a short period of time will negatively impact your credit score. Therefore, it’s key to limit opening new accounts only as needed.

Significance of credit reports and scores

If you’re new to credit reports, you might be wondering how everything is used. To sum up, it’s used to determine how "credit worthy” you are. According to myFico, your credit reports “…determine someone’s likelihood for a loan approval, their interest rates, or insurance premiums.” The lower your risk (that is, the higher your credit score), the more likely you will be extended credit from a lender, such as a mortgage, car loan, credit card, etc. Bad credit might even determine whether a landlord approves you to rent an apartment. Finally, in some industries (such as specific financial or military roles), credit might* affect employment. (*This can vary, so be sure to carefully read job requirements.)

Keep in mind that credit cannot be built or improved overnight. Therefore, it’s recommended that you start building your credit early and be sure to monitor your credit reports at least once a year, while making all debt payments on time whenever possible.

Reviewing credit reports/scores

At the beginning of this blog post, I mentioned the three credit reporting bureaus. You can pull your reports weekly — safely and for free — from all three bureaus via annualcreditreport.com. It is authorized by federal law and endorsed by the Consumer Financial Protection Bureau (CFPB).

This report does not give you your score; however, if you are applying for a loan, your lender will pull your report and score regardless. So, unless you have access to your score for free from your bank or credit union, for instance, there is typically never a need to pay to view your credit score.

We’re here for you with free support

Please do not ever pay to get help improving credit. Paying for this service is typically a scam, and you can do it yourself with guidance for free. If you want support to build or improve your credit, we are here for you.

Julie worked with one of our certified financial counselors, and she learned about the importance of credit, how it works, and steps to improve it! Her credit score went from 601 to 725, and she was able to buy her first house!

Our financial counselors will review your credit report with you and provide concrete, actionable support so you can work toward improving your credit and your overall financial situation. Call 888.577.2227 to schedule your free, confidential appointment.

Author Elaina Johannessen is program director for Debt Management Plan Operations with LSS Financial Counseling.