The Truth About Debt CON-solidation.
Written by Matt Wegner
Founder and Lead Counselor, Matt Wegner Coaching, www.financialexcellence.net
I recently spoke with a friend of mine who mentioned he was using a debt management company to help him out of a financial mess. While I was happy to hear he was working to solve his problems, I was Man with Hands in Hair surprised to hear how much he is paying this company to “help” him. By working with a debt management company, he is paying a rather large monthly fee for them to pay his debts for him. He was proud to tell me his debts would be gone in six years! Imagine my shock when I added up six years worth of monthly fees (what they are making off of him) only to hear him say he was planning to apply for another loan to purchase a car! This is what happens with these types of services. They take way too long to pay off the debt, and they don’t spend any time teaching their clients how to avoid more debt (which is what caused the problems in the first place).
Look, here’s the deal. What good does it do for you to consolidate all your debt into one lower payment if you are just going to go get more debt? That’s like having liposuction done just so you can continue eating like there’s no tomorrow. If you want to get out of debt, you need to stop borrowing! It’s a simple concept, but hard to do. It means you have to say no to yourself once in a while. It means you have to have a plan for every dollar you make. It means you may have to sacrifice and give up a few luxuries for a short period of time. It means you have to work hard to get results.
I know, I said you have to work hard. That’s not what the debt management and consolidation companies tell you, is it? That’s also something you won’t hear on midnight cable infomercials. My job isn’t to tell you what you want to hear. My job is to tell you the truth. Success takes hard work! I don’t think I’ve ever heard of something truly worth while that didn’t come through lots of hard work.
If you’re in a mess of debt, it’s time to set a goal and roll up your sleeves to get to work. Don’t rely on someone else to fix your mess for you. You got yourself where you are. Only you can get yourself out. Are you ready to work?