When you’re looking at a whole heap of debt, anything promising to make it easier to manage is a good thing — right?
Well, yes and no.
Sometimes different isn’t good, bad, better — nor worse.
Different can be just different.
With that said, consolidating all your eligible debts into a single loan will make your situation different. That goes without question. However, whether that difference will be beneficial depends upon a number of circumstances.
Long story short, if you’re wondering if debt consolidation is a bad thing, the answer is — it depends.
How Debt Consolidation Works
As the term implies, debt consolidation is the process of combining as many of your outstanding debts as possible into a single loan. The oft-touted advantages include the opportunity for a lower interest rate, a lower monthly payment, a more easily managed situation and the potential to raise your credit score.
“OK,” you say, “sounds good so far, so what’s there to consider?”
How’s Your Credit?
If you have a strong credit score, you’ll qualify for a debt consolidation loan at a lower interest rate than if you’re currently having credit issues. That lower interest rate will typically be the difference between making a consolidation loan a good deal and a bad deal.
After all, the goal is to reduce the amount of interest you must pay and ideally, your monthly payment as well. If you allow yourself to get locked into a high-interest loan because your credit score is low, you could make your situation worse — even with a lower monthly payment. You’ll have to accept a longer repayment term to make the payments reasonable, which means you’ll pay more.
What Kind of Loan Are We Talking About?
Some people refinance their homes or use home equity lines of credit to pay off debt. Most financial experts advise against this, as it’s effectively trading unsecured debt for secured debt. In other words, you’ll be putting your home at risk to pay off debt for which the worst consequence would otherwise be a negative mark on your credit report.
Credit card debt is the type most often consolidated, along with medical debt and student loans. These obligations are secured only by your promise to repay. If you trade them for debt secured by an interest in your home, you could be forced to sell your house to pay off the lender if you hit a rough patch and can’t make your payments.
Do You Have Self-Control?
Let’s say you have five credit card accounts, each one at or near its limit. The minimum payments on them are adding up to more than you will soon be able to continue to comfortably manage each month. However, your credit score is still pretty good.
You take a consolidation loan at a good interest rate with a reasonable term and things ease up considerably. The monthly payment is easy to manage. The interest rate is lower and you’re on track to come out ahead of the game.
Breathing a sigh of relief, you go back to spending the way you did before, falling back into the habits that loaded those cards up in the first place. You rationalize it as being no big deal because of all the money you’re saving each month, thanks to the consolidation loan.
Before you know it, all those cards that had zero balances are at or near their limits again and you have a consolidation loan to service each month too.
Simply put, a debt consolidation loan will only enable you to go farther into debt if you can’t stop charging.
Is debt consolidation a bad thing? Well, like so many other things in life, it depends. Debt consolidation can be the solution you’ve been seeking if you choose your loan and lender carefully, your credit score is still strong, and you manage your money well. On the other hand, it could be the worst possible thing you could do for your finances if any of those parameters are unmet.
Money is perhaps the most sensitive subject matter in our society. Indeed, with the possible exceptions of sex, religion, and politics, nothing makes people more uncomfortable than talking about finances. To wit, more marriages end as a result of money concerns than any other single factor. Given all that, it’s understandable why so many people are reticent to ask their boss for a raise –– even if they deserve one. The good news is, asking for a raise doesn’t have to be an excruciating process. Rather, just follow these four best practices and you’ll be sure to land the raise you’re looking for with minimal strain:
Pay Your Dues
Sometimes, professionals are so eager to get a job –– any job –– that they don’t concern themselves with base salary. However, you shouldn’t accept a job with an income well below what you need to survive. Otherwise, you’ll find yourself in the unenviable position of asking for a raise after a short period of time. This is a bad look for a number of reasons, and you’re unlikely to sway your boss to boost your pay after only a few months on the job.
Do Your Homework
One big mistake many professionals make when asking their manager for a raise is that they fail to do their homework. The last thing an employee can afford to do is submit an unrealistic request at the beginning of a negotiation. It’s important to determine how much professionals in similar positions in your field typically make and to understand the current state of your company or industry. Asking for a raise right after your business suffered a major setback isn’t likely to end well.
Go the Extra Mile
At the end of the day, a raise is something an employee has to earn through years of loyalty and hard graft. If you’re going to convince your boss to elevate your financial status, you should first look for a way to improve work performance on a consistent basis. By making yourself indispensable to the company, you’ll strengthen your bargaining position.
Be Willing to Negotiate
Contrary to popular belief, a negotiation is not an argument; just because you disagree with your boss, it doesn’t mean you can’t get along and still enjoy a solid professional relationship. It’s important for employees to keep an open mind when entering negotiations and be willing to compromise to a certain degree. (You may want to consider trading a hard salary increase for stock options or expanded benefits, for instance.) Few professionals get exactly what they want from an extended negotiation, so make sure to establish a “back-up plan” should management reject your initial proposal. Lastly, remember that showing your boss respect and courtesy will go a long way toward winning their favor. Even if you don’t see eye to eye at first, good manners and patience could help you reach a mutually acceptable arrangement.
Money is ubiquitous in every aspect of modern society, and we all have a responsibility to keep our finances in great health. A better economic status will open up a world of possibilities. More importantly, making those improvements will create a brighter future for your loved ones too.
We all try to keep an eye on our finances. But the harsh reality is that most people fail to utilise their resources to maximum impacts. Regardless of your financial status, there’s always a way to improve things. Quite frankly, finding those options should be a priority.
Here are some of the key elements to ensure that your finances are in the best condition possible. Make the necessary changes, and you’ll be amazed at how quickly the results start to show.
We’re all guilty of wasting money in one sense or another. With a little extra effort, you could probably cut your bills without making any sacrifice to your life habits. Ignoring those opportunities would be ridiculous.
The home is a great starting place. Making smart investments to lower your bills and improve your property is always a great idea. This could mean installing double glazed windows or an energy saving toilet. Those advancements will benefit you in the immediate future as well as the long-term.
Meanwhile, being resourceful and learning to upcycle items will save you the cost of buying certain items. Furthermore, it can be a great way to give the home a unique vibe. This is especially useful when upgrading the garden or decorating a child’s bedroom.
It’s always easier to gain financial security when you have more money entering your bank account each month. Money isn’t the only source of satisfaction at work, but a job that pays well should be a target for everyone.
Those opportunities won’t present themselves on a plate, though. Upgrading your job applications with an improved cover letter or CV can make a world of difference. Alternatively, asking your boss for a salary increase in an appropriate manner could be the key to greater pay.
The other option is to launch a business of your own. Many startups have embraced modern tech to achieve great success in recent years. And there’s nothing to stop you following in their footsteps. You could even start it as a side operation until you’ve gained a positive reputation.
In any case, earning more money will create a brighter future. Just be sure that you continue to give your finances the same level of attention that they currently receive, and you should be just fine.
Expect The Unexpected
Being responsible with money doesn’t only mean taking care of the present. Life is fragile, and things can take a dramatic change in an instant. Therefore, you must prepare yourself for the worst situations imaginable.
When you suffer a serious accident, your priority should be to find a quick route to recovery. However, it’s difficult not to worry about the financial implications. Calling a motorcycle accident attorney, for example, could be the key to solving those particular problems. And with your finances under control, you’ll be able to concentrate on your health too.
You should make contingencies for redundancy or situations that may cause serious harm to your financial health. You’d be foolish to think that you’ll walk through life without any low points. In most cases, it’s the way we bounce back from those trials that counts. Remove the element of surprise, and you’ll be back on your feet ASAP.
Savings play a vital role in our lives. Whether it’s building a deposit for our first mortgage or making preparations for a rainy day doesn’t matter. The key is that those funds are an extra lifeline. If nothing else, they will help provide an easier retirement.
Nevertheless, you have a responsibility to make the most of those savings. Leaving your funds to grow in the bank will bring minimal interest. Finding another source of investment could be the key to catapulting your finances to the next level.
The most important thing is to research your options. Discovering an opportunity that offers enjoyment and better financial gains is vital. CFD trading is a popular option amongst the digitally savvy investors. Learning more about this option could be very beneficial indeed.
Whatever you do, building those savings at a quicker rate will generate huge rewards in later life. If you are truly committed to building a brighter future, this item has to be on your agenda.