When we talk about debt consolidation, we often think about lowering interest rates, getting rid of late payment fees, lowering monthly payments, and getting better monthly payment terms...
When we talk about debt consolidation, we often talk about lowering interest rates, getting rid of late payment fees, lowering monthly payments, and getting better monthly payment terms.
Your debts are mostly made up of interest rates, so they should be lowered as much as possible. Penalties for late payments should be waived or looked at again. You can live a normal life if your monthly payment is less...
All of the above are important things to think about when you decide to combine your debts. But if you ask me, the most important thing to think about when you consolidate your debts is how you spend.
Most people get into debt because they don't control how much they spend. And if you don't do this right, you won't be able to get out of debt no matter how you combine your debts.
Honestly, you can't pay off your debts if your monthly bills are more than your monthly income. To get started, you will need to come up with a realistic budget plan.
Look at your income and expenses. Make a list of what you need and what you want. Spend your money on what you need and wait to buy what you want until you have money left over.
The difference between "needs spending" and "wants spending" is that "needs spending" are things you need to stay alive and well, while "wants spending" are things that would be nice to have but aren't necessary. One good example would be to eat at a restaurant in your neighbourhood or downtown.
Debt consolidation is just a method or tool that can help you get out of debt. Still, you and how you spend money are the most important parts of successful debt consolidation.
Work out a realistic, down-to-earth budget for the next few years that will allow you to live a simple, debt-free life today.
