Treat the Debt Disease, Not The Symptoms
If you have a wound that’s gushing blood, and spray pain reliever on it, you have treated the symptoms. You have not treated the problem itself.
Likewise, when you are in debt, it can be very easy to treat the symptoms and not the disease.
Here’s an example. The problem is, you owe a lot of money and your monthly payments are so high that you simply can’t pay off all of your bills.
One possible solution would be to get a low interest credit card – assuming you can even qualify for one in today’s tight credit market – and use it to pay off all of your bills.
Another option would be to take out a home equity loan and use that money to pay off all of your bills.
A third option would be to get a debt consolidation loan and use that to pay off all of your bills.
These are all potentially really bad solutions to your debt problem – because they treat the symptoms (you owe a lot of money) and not the problem (you don’t know how to budget and you spend more than you earn.)
Even worse, when you pay off all of those credit cards by borrowing more money – you now have to pay off the home equity loan or the new credit card that you put all your old debt on…AND…you have a bunch of credit cards with zero balance. Which means you are very likely to go out and run up your credit card balance again.
BEFORE you even consider taking out a loan to pay off your bills, you must sit down and develop a realistic budget and stick to it. And you must plan for what you do after you pay off your bills. Put your credit cards away. Put them in a safe deposit box if necessary.
Otherwise, by treating the symptoms and not the disease…the disease will only continue to get worse.