I am not talking about a well thought out plan that has been carefully considered and the decision to consolidate debt after looking at all of the options. I am talking about when people find that they have multiple debts and they get sick of making multiple payments and want to make one easy payment to cover everything. Or they are sick of making just the minimum payments on multiple credit cards and are getting nowhere.
Consolidation of debt can come in the form of personal loan, or increasing your home loan or a balance transfer. But the very fact that you have credit card debt usually means that you are spending more than you earn and unless you change your behaviour – consolidation is not the answer because in one years time you will be right back to where you are now. So if this is you and you know it is you because you have consolidated before and you are ready to consolidate again – It’s time to change your behaviour….
Before you get this weeks/fortnight’s pay work out what are the expenses that have to be paid – your bills, direct debits, food and fuel or public transport costs and then see what you have left. By living without any form of lifestyle for a month or two you start to realise the possibility of paying down your debts and this in turn starts to change the bad habit of always exceeding your income.
It is possible to live without lifestyle/clothing/shopping/alcohol and cigarettes and save a bit of money so that you can start to chip away at your debts . Give it a go,spend a month doing this and you will be surprised how much you can save just doing the basics – all that money is then definitely available to repay debts and if you can make a commitment to do that then you will be well on your way to changing your behaviour toward money and see your debt level start to reduce.
You will not believe the increasing sense of freedom that is felt as the burden of debt is lifted.
I usually find that being accountable to someone is the best way to change behaviour and really that is the main theme of my business. As a financial coach I keep my clients accountable to their decisions to reduce their debts, save for that holiday they wanted, create an emergency fund and live within their means
Call me if I can help