Create A Well-Thought Out Budget
A debt consolidation plan can work, but it’s got to be clear enough to understand and follow through on. A typical budget distributes money between making debt payments, saving for emergencies and contributing to a retirement plan. However, when you’re debt consolidating, there’s more to it.
People who successful budget their money don’t add to their debt because they take into consideration the infrequent expenses like car registration fees, personal taxes, holidays and even good times.
Instead of putting your household on a “diet” and “splurging” later on, a well-thought out and meticulous budget lets you budget and do things you want too.
Avoid Using The Cards
The biggest rule to remember about your credit cards is not to use them while you pay your debt off. People have been known to cut the cards up, lock them away or freeze them. Seems extreme but the tactics appear to work to attain long-term goals.
In order for you to remain committed, write all the reasons down to why you want to be debt-free, how often you’ll make your payments and when you’ll check on the progress being made.
You don’t want to close your accounts, as this could do more harm than good to your credit. You should also use the card every now and then to make sure the account stays active. Use it, pay it off and forget about for another two or three months.
Look At Each Consolidation Product
Balance transfer cards allow you to shift debts from one card to another for a limited time without a charge. Look for ones that offer 15 to 21 months, if you can pay the debt off in that timeframe. These cards are useful for people with good credit scores and have a high income.
Personal loans have lower interest rates than credit cards do and allow you to borrow more money. The rates you’re offered depends on the amount of debt you’re in and your credit score. A lender can send money to the creditors, so you’re not tempted to spend it instead of paying debt off but make sure to ask first if this is available.
Get Moral Support
Many people don’t like to talk about their debt, but getting moral support can be a real motivator in overcoming your financial troubles. There are online forums and debt support groups to assist you. If you have a close friend or family member that can keep you accountable, have them help you.