I can, to my shame, speak with authority on this subject, being in debt and having gone the debt consolidation route more than once. So why am I still in debt?
One simple word, life. Appliances break. Cars need work. The house needs a chimney cover installed. Yard maintenance. Insurance deductibles. None of these expenses are any kind of fun or indulgent; rather they are necessary to keeping your little ship afloat.
Admittedly I have expensive taste. I like quality and avoid gimmicky “sales” like the plague. I honor the adage “You get what you pay for.” When I buy I do my homework, shop around and do not purchase on impulse. My home is nice but not huge, worn in places that we can’t afford to fix, in need of repairs we can’t afford to make.
Three times we’ve consolidated our debt. Three times we took solace in knowing we were doing the right thing financially. Three times we refused to return to the lure of credit though we (and our children) wanted just the same as before. It’s a great feeling for as long as it lasts. The kick is, it never lasts.
Because despite what your best laid plans of consolidation and no new spending, life happens as you move forward. You don’t have the cash to meed that immediate need, and unless you have a rich relative who is willing to help every time you need it, the credit card is your only option to meet the need.
Zeroed out credit cards are waiting for just this moment. They lure you with the promise of this one charge, to be quickly paid off and forgotten. Until the next thing happens and you’re still two days away from payday.
I think the best advice, learned from hard, costly experience, is don’t get started on the credit road to begin with. No debt, no debt consolidation needed. Go into debt for things that matter, homes and cars, perhaps a vacation, but never, ever for things you’ll be paying for long after they have been and gone. Furniture. Clothing. Electronics.
And if you do succumb to using credit, do so carefully. Only charge what you can pay off. Avoid those store offers of savings to open a charge account – the interest rate more than makes up for what you “save”. Keeping a handle on the number of cards, and the amount you owe on each will keep the debt from creeping up, getting bigger without you even realizing.
And if you are desperate enough to consider debt consolidation, beware. Creditors are waiting for scared, desperate people to ensnare – do your homework. Don’t jump at the first offer; the more pressure applied to get you to sign on, the faster you should run. Speed, fear and pressure are the three biggest weapons of the scammer.