Debt Consolidation; Should You Or Shouldn’t You
There have been a couple of articles on this blog about debt consolidation, but none have addressed the main question, which is if debt consolidation is a good deal or not. On the surface it seems like a good thing, but it isn’t necessarily a good thing at all; let’s take a look at a few things.
The first issue is whether you really need debt consolidation or not. Many people think that as soon as they start feeling overwhelmed with their bills that they need to consolidate their debt. The reality is that most people make enough money to pay all their bills and take care of their staples as well, but because they don’t understand the concept of budgeting they can’t see it. A well planned budget, or even hiring someone to put the numbers together so you can see what your income and expenses are can help greatly. No one should ever rush into debt consolidation without this first step.
The second issue is whether you want to try to do it on your own. This usually means getting a loan of some type, which includes getting a line of credit on your home to help out. This might not be the best idea in the world unless you’re going to start exhibiting some great restraint on yourself as far as your spending goes. If not, you’ll pay off your initial debt load, start paying down what you have, yet you’ll be adding to it and getting yourself into more financial difficulties. Only this time you might be putting your home in jeopardy as well, or creating a debt to someone you don’t want to miss a payment with.
The third issue is if you decide you need help. On this front it becomes a question of how much help you need and who you should trust. My first move would be to Consumer Credit Counseling because they’ll be able to tell you if you need more or less help than they can give you. If you decide to go the debt settlement/consolidation route, you need to really do strong research on the company because some companies will get you out of debt, but they’ll ruin your credit for years. Or maybe you can find someone to help you with budgeting, maybe a friend good with numbers or an accountant or bookkeeper, but in this case you really have to be diligent and listen to what they have to say.
Whatever you decide, know that there are always options and that you don’t ever have to do it alone.