Loan Consolidation

Don't be confused by consolidation loans. Some companies try to pass off consolidation loans as a debt management method. In practice, a loan will only increase your debt. Plus, most debt consolidation loans have high interest rates that may have you paying more than you were for your bills! Don't fall into this trap! Debt management and debt consolidation services (not loans) are the only way to reduce your debt into one manageable monthly payment.

You can get help from companies on how to form a strategy to wipe out your burdensome debts. You will have to evaluate your spending habits (notice the word habit) and track what necessities you need to spend for. The best strategy is to have only one credit card for emergencies. Everything else should be cash only. When you attack your debt, pay the highest interest loans and credit cards first. Pay at least the minimums due on your other bills. When you have eliminated a credit card or loan use that same money to pay on the next highest loan or credit card. If you can make double payments your debt will really begin to minimize. (If you pay only minimum payments on the highest interest loans or credit cards it will take years longer to pay them off.)

Whenever possible put aside money as a cushion for the unforeseen situations that can arise. You need to have an emergency fund that would cover your living expenses for six months. No one knows the future but saving extra money will keep stressful times more manageable. Just a few tips on saving: Pay cash for food. Don’t use credit cards with the high interest they collect! Use coupons out of the local newspapers and your magazines-they really do save you money. Curb your long distance phone calls and don’t go over the allotted minutes on your cell phone plan. Conserve gas by carpooling and don’t buy a Mercedes if you can only afford a Pontiac Grand Am!

In the movie Snow White, the seven little dwarfs were singing the song,”Hi-ho, hi-ho, its off to work we go... They had the right idea in mind. We go to work to supply what we need. But if we overindulge, we have to work so hard to get out of the debt that was so easy to get into. The largest percentage of us must go to work in order to survive. We work, we buy, we strive to have. But sometimes, our needs are overshadowed by what we want. Needs and wants are two totally different things. If you were one of the unfortunate people to go through the hurricanes of 2005, you found that you only need a few things to survive- water, food, transportation, clothing and shelter and if I might add, each other. The other “things” are nice, but not necessities. Take the time to evaluate. Don’t let “what the Jones’ have” intimidate you or the advertisers on television lead you to believe you are less because you don’t have more! The less debt... the better you’ll sleep at night.