How Do I Consolidate My Debts?

If you’re looking at debt consolidation, chances are that you’ve been missing a few payments, or are starting to feel the pinch in a very real way. It’s something that’s very common these days, so taking a proactive approach to your financial situation is the best first step that you can take. Knowing that the process will take some time is another important thing to get on the table at the very beginning. It can certainly be stressful, but there is a brighter future ahead. In the meantime, be as honest with yourself as you can, and don’t hesitate to reach out to friends in similar situations if you feel like you need support. It can do wonders for making a tough time bearable, and sometimes even pleasant.

First of all, debt consolidation means taking a thorough look at all of your debts, and all of your income, and doing some clear-minded lists of what you have, what’s coming in, and what you owe. A formal debt consolidation might be right for you, but it’s very important to remember that with these programs, there are often some very serious traps that can make the problems worse. Looking into the background of the company, and having some trustworthy advice is essential here, and if it sounds too good to be true, it certainly is.

Turning it over to someone else so that they can lower your monthly payment might make sense if that someone else is skilled, qualified, and trustworthy. If these conditions are even a little blurry, you’re better off doing it yourself. The first thing to do, then, after you know the hard figures you’re working with, is to take your credit cards out of your wallet, and leave them at home. This is a remarkably effective and simple way to begin healthy habits.

Next, figure out which bills have the highest interest, and decide to pay these off first. When calculating your own monthly payment, set aside extra for these high interest debts, so that you’re not stuck paying the minimum, while still racking up finance charges that will further the problem. Next, target the credit cards with the smallest balances, and decide to pay these off next. Maintaining your regular bills all through this is essential, so that the problem won’t get worse. Try talking to the credit card companies to negotiate a lower interest rate. Sometimes they can be surprisingly willing to work with you.

For yourself, keep everything on the table, and don’t hide from it. You’re already making moves toward a healthier future, so keeping true to yourself will pay off as you go forward, and the debt slowly comes down. We’re all in this together, even if it might not always seem that way, so keep an active support network.