Debt Consolidation
Debt consolidation will often work on paper. However, in real life it is a bad idea. People that consolidate debt are the ones that have a problem with debt, in the first place. The people get an immediate increase in cash flow from putting all the debts together. A lot of people roll their credit cards into a home equity loan and then pay on them for the next 20 or thirty years.
What statistics show is that 99% of people have good intentions. Then, in a month or two, they begin the cycle of enjoying the added cash flow. Within a short amount of time, the couple is in the same situation as before. The only difference is that the couple will know have a higher debt balance than before. The problem is that people don't follow through with the plan to use the increased cash flow to pay off debt.
When you do something wrong, there needs to be a way to know it is wrong. When you step on a nail, there is pain in your foot to let you know: #1- Pull your foot away and #2- Don't step on any more nails. With debt, people want to: #1- They want to avoid pain and #2- The put off a little pain now for a lot more later.
The solution is to pay the piper now. You should feel some immediate pain. The pain is good because it tells you to: #1- Don't get into debt again and #2- Pull away from all the things that get you into debt.
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