Many people seem to enjoy living beyond their means. Based on their income and assets, their standard of living would be comfortable "here" but they move it up a few clicks so that their standard of living is actually practiced at a higher level. Much of this is done using credit and depending on the "future money concept", where they are counting on that next paycheck to keep creditors pacified. |
Retailers are far too anxious to take advantage of this mentality by promoting the "buy now pay later" program. Far too many people are taken to the cleaners in their haste for instant gratification, and figure that the money to pay for it will suddenly appear in a cloud of smoke before the bill is actually due on those purchases.
Even the credit card companies get into the act by encouraging you to put anything from a pack of gum or cigarettes to groceries to new cars on your credit card, and just to sweeten the deal, they will even give you frequent flyer miles. How many consumers actually do the real math behind this to find out that a free ticket on an airline redeemed this way would cost about TWICE as much as if you had called the airline and offered to pay full non-discounted fares anyway?
So what inevitably happens is that the consumer gets into financial trouble. There is no way around it. If your income level is "x" dollars and the lifestyle you are trying to lead is costing you "x" times two, it is only a matter of time before your house of cards starts to crumble.
There are multiple ways around the problem, and the first one is to adjust your lifestyle to agree with your income, which will prevent the problem from happening in the future. But if you are already in trouble, what can you do? You can get a personal loan, but in reality, that is only going to delay the inevitable and buy you a bit of time, and when that time comes, you'll just have one more debt to deal with in addition to the others.
You could file for bankruptcy, but for the vast majority of people, that is similar to extinguishing a match with a fire hose. In other words, it's overkill. Why do something with such long term negative effects on so many facets of your life, and which will remain as a huge blemish on your credit report for the next 7 to 10 years?
The consumer in this situation should consider debt consolidation. This is not bankruptcy nor is it a loan. It is not even credit counseling, although some debt consolidation companies do offer such a service. You turn your finances over to the debt consolidation company and they make the payments to your creditors every month. But they do this from the monthly payment that you make to them, and if you don't pay them, then they of course do not pay your creditors, which starts the cycle all over again.
A huge advantage of using debt consolidation is that it gives you some financial breathing room while you get your financial act in order. If you were paying out, for example, $3000 a month in bill payments, you could easily see that monthly outlay reduced to say $1500 a month with a debt consolidation agency, since they work with your creditors to reduce the interest rate and sometimes even eliminate late fees.
Debt consolidation does not have the tremendous long term negative effects of bankruptcy, but can provide you with some time to get things straightened out without breaking the bank in the process. This service is available almost anywhere and is definitely one that should be considered if you are in this situation. For more insights and additional information about Debt Consolidation as well as getting a debt consolidation quote online, please visit our web site at http://www.debtconsolidationstrategies.com
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