Debt consolidation: discipline is the key

Debt consolidation – rolling all your debts into one manageable loan – can help you move towards financial freedom, provided you stay disciplined.

Many people will be able to tell you about how they took out a debt consolidation loan – but were, or are, still in debt months or even years later. You can succeed where they failed – and here’s how.

Discipline key to successful debt consolidation
The chances are that your friend/family member took out the loan to clear credit card debts – and then carried on using the credit card. If you’re going to clear credit card debts, it’s critical that you cut up the credit cards – or lock them away for use only in emergencies.

It should be stressed here that a family holiday is not an emergency (and neither is a new pair of shoes). If you can’t afford the holiday without paying by credit card, perhaps you should consider whether you can afford it at all. With credit card rates expected to rise in the near term, it could be very expensive. Far better to clear you debts and go on holiday then.

Discipline is key to successful debt consolidation. You’ll need to keep your outgoings within your means until your debt consolidation loan is clear.

Successful debt consolidation can bring rewards
Make a list of all your income – wages, bonuses, benefits, and any other money that you can expect to receive on a regular basis.

Then set against it a list of your outgoings – mortgage or rent payments, food, utility bills, petrol and other expenditure. It’s important to be realistic – you won’t feed a family of four on £30 a month – but again, discipline is critical. If your outgoings exceed your income, you’re going to need to scale back.

Experts recommend you prioritise your outgoings. If you don’t pay your council tax you could go to jail – so make sure it’s paid. If you don’t go out for a meal or to the pub during the month, it’s not life-threatening.

It’s also suggested that you have a goal in mind. Perhaps strangely, people aren’t actually very motivated by money – a bank balance is just a set of numbers after all. Therefore, it’s better to focus on something that the money could bring you – whether it’s a better home, a new wardrobe, a holiday, financial freedom, or the chance to go for meals out and visit the pub occasionally!

Get debt consolidation help from Homebank
If you are thinking about debt consolidation, let the experts save you time and money by finding the right one for you.

Homebank have qualified mortgage consultants ready to advise you with all your debt consolidation, mortgage and insurance needs. For informative, insightful advice on debt consolidation, call us to arrange a no-obligation appointment to suit you.

Homebank are the “people’s mortgage broker”, with thousands of products to choose from, including some that are not readily available on the High Street. Homebank’s experienced consultants could find the ideal debt consolidation product for you. Call Homebank free now on 0800 052 3604.