I vaguely remember attending a financial aid meeting on one of the last few days of my college years. I was paging through new folders containing paperwork with payment coupons and realizing I have to actually start paying for my education. What stood out for me that day, other than the sticker shock, was we were told specifically to “never consolidate” our loans. I don’t remember the reason why we weren’t suppose to, I just remember the advice. I thought debt consolidation was bad.
So now, many years later, still paying off those student loans, I have been pondering the idea of debt consolidation on a few loans, credit cards and medical bills I somehow seemed to have racked up.
These thoughts came after receiving a phone call from a debt consolidation telemarketer where I was seduced into thinking they could not only reduce my monthly payments, but they could reduce the amount of debt itself. No kidding? I need to know if this is true…
I asked excitedly, “How on Earth can you do that?”
In retrospect I should have asked, “Why couldn’t I do that myself to avoid paying someone else to do it for me?” Nonetheless, her answer was less than stellar and my mind went back to the financial aid meeting so I ended the call.
Deciding to make sure I’m not missing out on something, like a new “government package deal for debt holders stimulus” (wouldn’t that be cool), I decided to look into this debt consolidation proposition a little more thoroughly.
Dave Ramsey often says there’s a reason CON is in debt consolidation. He advises strongly against it.
What I’ve discovered is the burden simply lies on my own shoulders. There is no magical fairy dust any debt consolidator can spread on my debt to make it disappear.
I need to formulate a plan. I need to write it down and stick to it. Basically, start living on less than what I make. (Oh, that sounds so boring compared to magical fairy dust.)
Of course, changing habits is a big part of the plan. It’s all about commitment and focus.
I have big plans for my family so time spent on getting clear about ridding our lives of debt will be well worth it. Debt is my new four letter word and I plan to eradicate it from our lives.