How to Prepare Financially Before Entering TreatmentAnna Ciulla
If problems with drug and alcohol abuse have begun to wreak havoc with your life and you’ve decided that treatment is your best option, it’s not as simple as walking through the door of a drug and alcohol rehab center and getting help. While in some cases the situation is dire and does indeed require immediate assistance, taking the time to get your financial affairs in order before entering treatment is often a wise choice. Since the last thing you want to be worrying about is how you’ll pay for treatment, starting with a comprehensive financial check and taking appropriate action can make your transition into addiction treatment smoother and less stressful.
HOW DO YOU GET A HANDLE ON YOUR FINANCIAL SITUATION?
When you’re contemplating when to enter treatment and know that this is a priority in your life going forward, you must first get a handle on your financial situation, by figuring out where every dollar goes in your monthly expenditures. Here are a few tips to get started:
- Gather copies of all the bills that came in last month. Remember to include copies of automatic payments you’ve arranged through your bank or credit card, such as mortgages, HELOC or second mortgage, utility bills and others.
- Similarly, retrieve copies of income statements, such as paycheck or payroll notification, pension, Social Security, alimony, child support, mandatory retirement distributions, interest income from banks, credit unions and other institutions, cash back available through credit cards or bank accounts.
- Using a ledger, an Excel spreadsheet or plain sheet of paper, make columns and name them according to income, bills and shortfall/surplus. Make sure you include columns for the amounts for each item. Note that this exercise may be uncomfortable, especially as you see the outgoing amounts each month eat away at the money coming in.
Why is this exercise necessary? You must know the exact state of your financial affairs before you can realistically plan for your upcoming stay in treatment. Once you’ve got the complete picture, despite any shortfalls your accounting exercise reveals, you’ll be better situated to search for other avenues to pursue to obtain the funds necessary to pay for the cost of your treatment.
MAKE SURE CREDIT RATING IS SOLID – IMPROVE IF NECESSARY
Lenders look at many factors when deciding to extend you credit. Your credit score is key. Ninety of the top largest 100 U.S. lenders use Fair Isaacs Company (FICO) for their risk assessment needs. Did you know that about 60 percent of Americans don’t know their FICO score? Scores can go up to 850, although few people attain the highest level. A FICO score of 750 and above is considered good. Those with higher FICO scores have access to the lowest rates and best loan terms. But what if you are consistently making late making payments or only make the required minimum payment? If so, your credit rating has likely taken a hit. This is something you must work to improve if you hope to have any reasonable chance of obtaining credit for a loan or asking that your credit limit be raised on charge accounts. The good news is that it only takes a few months – roughly six – to raise your credit scores. (This may seem like an extraordinarily long time when you need treatment, although it isn’t a deal-breaker.)
If you urgently need treatment now, pull out all the stops to get it right away. This may mean borrowing from family, withdrawing funds from retirement accounts or your savings at the bank. It may mean going for outpatient treatment instead of residential treatment. It’s only responsible to do what you must to get the help you need when you need it most.
If you can wait, however, and have a few months to make some financial improvements, use this time to your advantage. Bankrate suggests seven steps to improving credit scores:
- Watch credit card balances.
- Eliminate credit card balances.
- Leave old debt on your credit report (paid-off debt is good for your credit).
- Use your calendar to rate shop in a short period of time (every time you apply for credit, it causes a dip in your credit score).
- Pay bills on time.
- Don’t do anything too risky (missing payments or not making them on time).
- Avoid obsessing over your credit score.
Pay down your credit cards and pay early or on time. Don’t make any major purchases, including a car, house, vacations, shopping or entertainment. The idea is to be frugal, to delay gratification, while you keep the goal in sight: financial stability. If you’re having trouble, investigate financial counseling or ask a trusted loved one, family member or friend to help get you on track.
WHAT TO LOOK FOR ON CREDIT REPORTS
Per federal law, you can monitor your credit history with a free credit report from each of the three major credit reporting companies (Experian, TransUnion and Equifax) every 12 months. Break this into quarters and request one free report every four months from one company in succession. For example, you could start with Experian in January, ask for one from TransUnion in May, and Equifax in December. Go to www.annualcreditreport.com to get started.
What should you look for when reviewing your credit reports? The Consumer Financial Protection Bureau (CFPB) suggests consumers look for errors in identity, incorrect reporting of accounts and status, data management errors, and incorrect balance or credit limit. Once you find errors, you can dispute them with the reporting credit company and the company providing the inaccurate information.
A budget is an excellent tool to help you get your finances in order. The days of blithely spending whatever you want when you decide to have to cease. Stick with the budget and remind yourself that what you’re striving for is worth the sacrifice.
STICK WITH YOUR JOB FOR NOW – YOUR CREDIT HISTORY WILL SUFFER IF YOU LEAVE
Whether you love or hate your job or fall somewhere in between, the smart strategy now is to stick with your current employment. If you leave, especially if you have a pattern of short employment stints in your career, your credit history will be negatively affected. Getting credit is a lot easier with a stable employment history. Creditors, including banks and credit unions, want to see that you’re going to be able to repay any loan or advance. That means verifying that you’ve got a steady paycheck coming in. Delay your intention to change jobs or careers until after you’ve gone through treatment. Besides, you’ll be in a much better position to make sound career decisions once you’ve received treatment. Your head will be clearer. You’ll be less prone to impulse actions, inappropriate coping behaviors, shirking responsibilities and missing targets or deadlines. You’ll be more attractive to potential employers going forward. Keep this in mind and stick with your current job for now.
SEEK FINANCIAL COUNSELING TO HELP YOU MEET TREATMENT COST GOALS
Not everyone feels well-equipped to manage their finances, even if they’ve done so for years. In fact, everyone can use a few tips from financial professionals. When you’ve got an important goal that you want to finance, or find appropriate means to fund, seeking savvy counsel may be a worthwhile investment of your time. It may cost you nothing, especially if you spend sufficient time researching the subject on the Internet.
If you already have a drug and alcohol rehab center in mind where you want to go, contact admissions and inquire about how to pay for treatment from them. Most respected addiction treatment facilities offer guidance to prospective clients and some have scholarship programs or sliding-scale/ability to pay options. At the very least, the drug and alcohol rehab center should be able to give you a list of referrals and resources you can check out.
You may want a luxury treatment center, yet only be able to afford something less. What’s more important isn’t the number and quality of amenities, it’s the quality and comprehensiveness of the treatment program and staff. Ask for guidance and counsel on affordable treatment options to help you meet your treatment cost goals. This is another essential step in preparing yourself financially before entering treatment.
If you have questions about payment and pricing for alcohol and drug treatment, call one of our admissions counselors, today. They are available 24/7 to accept your calls and answer any questions regarding affordable treatment options.
AnnualCreditReport.com. “AnnualCreditReport.com” Retrieved April 30, 2018.
Bankrate. “7 ways to improve your credit score” Retrieved April 30, 2018.
Beach House. “Admissions Process” Retrieved April 30, 2018.
Beach House. “Affordable Treatment Options” Retrieved April 30, 2018.
Beach House. “Our Programs” Retrieved April 30, 2018.
Consumer Financial Protection Bureau. “How do I dispute an error on my credit report?” Retrieved April 30, 2018.
Consumer Financial Protection Bureau. “What are common credit report errors that I should look for on my credit report?” Retrieved April 30, 2018.
Consumer.gov. “Making a budget” Retrieved April 30, 2018.
FICO. “FICO Score” Retrieved April 30, 2018.