Consolidation v working hard

ChiefTripod

Hello everyone, this is my first day visiting this site.

What a host of useful info. I think there will be some late nights reading here

Ok, to the point of my post........

To date I have consolidated my debts 3 times, then earlier this year I woke up and thought that this is not the way to become financially independant.

I would be interested to learn your opinions on this battle that I am having with myself.

I work 9-5 on a fixed salary without chance of bonus or overtime so I took on a part-time job and am working towards my goals. But should I consolidate again to get my monthly cashflow in a positive state instead of negative as it is now?

If this has already be covered before, sorry for repeating.

Chief

Debt_Free_Chick

ChiefTripod wrote:

Hello everyone, this is my first day visiting this site.

What a host of useful info. I think there will be some late nights reading here

Ok, to the point of my post........

To date I have consolidated my debts 3 times, then earlier this year I woke up and thought that this is not the way to become financially independant.

I would be interested to learn your opinions on this battle that I am having with myself.

I work 9-5 on a fixed salary without chance of bonus or overtime so I took on a part-time job and am working towards my goals. But should I consolidate again to get my monthly cashflow in a positive state instead of negative as it is now?

If this has already be covered before, sorry for repeating.

Chief

Want to tell us why you've consolidated three times? Is it because having consolidated, you then went on to run up more debts on your credit cards?

If so, this is generally the reason why consolidation doesn't work. It gives you a false security ... you think you manage just one or two little "must haves" on your credit card and the whole nightmare begins again.

Also, loans are generally inflexible. Although the interest rate is lower, you can't overpay in order to pay off the loan quicker. Your only option is to cut your spending back to the bare minimum - it's only temporary - you'll live; it's not life-threatening And then save like mad. Once you've saved enough to pay off the loan early, do it. First thing - cut up all your credit cards! And if you have balances on them, pay those off before you start to save to pay off the loan.

Getting your spending under control is the key here. If you want to pay off your debts, you've simply got to spend less on other "stuff". The quicker you want to pay off your debts, the more cutting back you'll need to do. It's a little worrying that you have negative cashflow - do you know exactly where your money goes every month? Is every purchase absolutely necessary?

Your spending is the key here.

HTH

martinpike

Debt free chick is spot on. It appears to be your lifestyle that is the problem. You seem to be earning a pound and spending a pound and a penny.

Once you've addressed that, it sounds like snowballing might be a better option than consolidating, depending on whether you can get cheap or free credit.

Shadowplay_2

Can you list a detailed incomings and outgoings so we can see why you are in a negative cash flow situation? It might show you where all your money is going...

Have you done the MSE Budget plan which is located on this site?