Let’s talk about debt consolidation, the pros and cons and if you should do it or not, from my perspective! The perspective of someone who has done it, many, many, many times. Debt consolidation will never help you win with money and while it makes mathematical sense, it is not a smart financial decision most of the time.
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Wendy, I totally agree with you. Debt consolidation loans do not teach you anything. It's like when you get into trouble and have mommy or daddy bail you out,time and time again. What did you learn? Call my parents to pay my bills. It's not helping to get out of debt any faster than you would by just focusing on the debt payoff and actually do it yourself.
What I have found is debt consolidation, any type of loans, title loans, payday loans, etc. These are nothing but the devil. Say you need $100 take out a payday loan. By the time all's said and done,you end up paying $4,500 in interest rates, plus the loan amount. $4,600 to borrow $100 .yeah.all perfectly legal. Not wise. Another bit of crap advice is ignoring bills. Assume someone else will handle it. Leaving checkbooks, debit cards and credit cards out. Especially with my family and former friends. Rushing into major life changes. Not being mindful of spending. Putting wants before needs.
Great video… Sad but true. I have done the same before ?
I liked when you said the banks are not your friend. That is so true. Excellent video Wendy.
I am torn on this one. Back when I was married we had two credit cards with zero interest intro rates an emergency happened well multiple and some emergencies that were only emergencies to him. We tried paying off the credit card but it didn't happen in time our income was legitimately to small. I remember trying to cut corners all I could on my end and that was freezing weather I should hand wash cloth diapers in the bathtub or ask for more quarters for laundry.the interest had started the first credit card and I was unsure we could even pay the minimum once the second one had interest my husband had taken a second job for a few months and was completely burnt out. I made the decision that even though Dave Ramsey said it was a bad idea. Going to the bank and doing a balance transfer to a zero interest card for both cards saved me more in one hour than all the penny pinching i could have done. Looking it gave me hope to be debt free we had made real progress but when they extra you have been paying is pretty much the interest you will be paying it is discouging. We had a baby that year and I knew a tax return was coming that would put a huge dent in our debt. I didn't know what to expect but knowing now what it was it would have paid off our car and we could have went to liability and all that money could have went to debt. Husband thought he could never get ahead he kept getting passed up for promotions and decided to be self employed at the worst time. He had no savings and spent everything on the business his credit card the consolidated one a huge chunk of the tax return and my credit card the business failed he went a year and a half with no income. It was bad. Spending habits need to change for sure if there is still a spender in the house not a good idea but. Mathmaticly if you are but when you start to do things that save you $.50 and take a half hour and your not getting everything done and that is costing you. And the absolute biggest savings you can come up with is saving on interest than do it
Thank you Wendy. Everything you said is what I point out to others considering debt consolidation. I too have done it and I swear this is part of why my debt numbers are as ugly as they are.
I never knew any of this. Thank you for the video.
great advice
I agree. I consolidated my debt out of college for $4k bc I couldn’t keep up on credit cards w high interest n my loans going into repayment. It eased the burden but within 3 years I had already accumulated another $4k., luckily I snapped out of it and while I don’t follow dave Ramsey I follow some of his principles and got that $4k down to $1k which I’ll pay off by January and I’m setting myself to pay off all my school loans by 2020 as opposed to 2025!
It seems like it would be a good idea with high interest credit cards, maybe it could help with inerest rate, but not with the amount owed. Thankful we have just gov't student loans so no high interest on anything.
What are your thoughts on cash out refinances to consolidate? We have a rental house worth about 90,000 and only owe 24,000 on it
Wendy, It is "nay " not " neigh". "Neigh" is what a horse says. "Nay" is an old way to say, "No." lol.
thanks for this video.
I knew a couple that consolidated and it was almost treated as a negative when they wanted to biy a house, and on top of that they just ran up more debt.
This is one of the most sincere videos I've ever seen! It's so true!!
So.very.true. Been there, done that.
The bank is not your friend! I agree Wendy!?