Quite often when people decide to make changes in their lives they tend to go all out at the beginning. They feel totally motivated and ready to take on anything to get the results they want to achieve. They dive headlong into something with only an idea of what the end result will look like.

This works for a little while but the excitement and motivation usually wear off quickly and can be replaced by negative feelings such as overwhelm and regret.

A great example of this is gym memberships.

Come January the gyms are flooded with folks looking to cast off the mistakes of the past and live a healthier life. Forgetting they didn't just wake up one morning and suddenly there they were, lying in bed, overweight and out of shape. No, my friend, the “Fat Fairy” didn’t pop by one night, drop a load and run. Those extra pounds took investment and time to accumulate.

Let’s fast forward a few months and many of the would-be health nuts are nowhere to be found. Not because they’re losers who can’t stick with anything, but because they took on too much, too quickly, and without a plan.


Now let’s look at this in reference to financial health.

The same thing can happen when people try to change too much, too quickly with their money situation.


Here’s an example.


“Nancy” (random name) would like to start saving more money so she decides there will be no more dining out, she cancels Netflix, becomes the “coupon queen” at the grocery store, sells off everything she doesn’t use or want, slashes her phone plan, and cuts back her expenses wherever she can…she is on a roll! WOW!


For the sake of this example, let’s just say she isn’t in the dire straights and it’s her choice to save money. (Realistically, there are people in a position that their only options are to either make drastic cuts or find extra income, quickly.)


Here’s Nancey, she is making all of these changes at once. She feels great…she is in control and she is doing this!

The big question is, "How sustainable is it?".

Time goes by, Nancy is getting antsy… she would really love to go out to dinner (or even order takeaway food)…she missing watching her favourite programs on Netflix…she regrets selling many of the things she parted with…and so on.

Eventually, Nancy begins slipping back into old habits and patterns and before she knows it, she is in the same situation she was in before, actually, it’s a little worse because she kinda binges on the things she was missing out on. The only thing she’s achieved is to feel even worse than she did before because now, on top of everything else, she has failed to achieve her goals.

But hey, there’s no need for Nancy to be so hard on herself. It's not that she’s weak or anything like that…the problem is she took on too much, too quickly.


Moral of the story:

Change is a process, instead of trying to change everything at once, change one thing at a time.

To be successful at making changes stick, pick ONE thing that you want to do differently today, and do that thing.

When you have established that new pattern or habit, choose the next thing you want to change and work on that.

This will help you to stay focused and achieve what you set out to do.

Remember...it took time to create and instill unhealthy financial habits and it's going to take time to establish and implement new, healthy ones.

Until next time…


Have a fantabulous day and always let your awesomeness shine!


Glenda


P.S. If you’d like to have relevant tips, strategies, and more delivered directly to your inbox….sign up for the “Kick Debt to the Curb!” (KDTC) Weekly.  

Also known as F.O.M.O., the fear of missing out is a form of scarcity thinking. People see, what they believe, are exciting and worthwhile things happening around them, yet they are not part of it....

fun activities and experiences…
travel…
relationships…
new vehicles…
new houses…
latest gadgets…
food…
clothing…
investments… and so on.


These things seem so much more valuable, when seen through the eyes of a person not content with their own life, which in turn can lead to feelings of anxiety and depression... it can also lead to reactive-spending.


As social media allows us to take a peek into the lives of others on a bigger scale, for many, it also amps up feelings such as envy, regret…and even inferiority. Believing they are not on par with their peers financially can be a blow to a person’s self-esteem.


I mean, it’s one thing to see a neighbour buying a new car or going on a great trip…but when a person is bombarded with the “edited version” of the lives of many, many other people on a daily basis, who seem to have “more” or “better”….. it’s easy to see how it can have a negative effect. People may start to feel like they are lagging behind and missing out on so many wonderful things in life.


What we see on social media is usually an edited version of life, a sliver of the big picture. We don’t often see what’s happening on the back end…for example…if someone buys a new house…we don’t usually hear about the journey….how long it took them to save for it, or the sacrifices they may have had to make along the way.


On the other hand, there are people who show all the wonderful things they are buying and experiences they are having…yet they don’t share how they went up to their arse in debt to get and do this stuff.


There are many ways F.OM.O. manifests and it’s not only the emotional/mental impact of it as anxiety increases, but there’s also the financial impact of it. Yes, social media is one source to feed the fear of missing out, but advertising and marketing also feed it and use it to manipulate the buying decisions of consumers. By increasing the sense of urgency and scarcity, marketing is used to push consumers to make quick, impulse decisions.


The need to “keep up with the Jones”, or any of their social media “friends” and be an “insider” is one thing, but it can get worse as people act on those feelings and do something about it, like spending money they don’t have… and filling the gap with credit.


It is possible to overcome F.O.M.O. rather than jumping on the reactive-spending bandwagon. If the fear of missing out is having a negative effect on you, here are a few tips to curb those feelings.


Evaluate the source of your F.O.M.O.
When you understand what’s causing the feelings of missing out, it gives you an opportunity to take action and do something about it. For example, you may not be able to afford to buy a new home, but even if you are renting, you can add a few personal touches to make your current residence warm and inviting to you.


Stop comparing yourself to others.
If comparing yourself to others makes you feel like you aren’t good enough or don’t measure up…stop it. The only thing you should be comparing you and your journey to, is you and your journey. Using other people’s success as a meter for your own is setting yourself up for disappointment. Chances are, you will always find someone who has more or better than you.


Discover your core values and what’s important to you.
Spend more of your time, energy, and money on the things you truly care about and enjoy. When you do this, there's less reason to compare your life to that of someone else. It’s OK to say “no” to the things that aren’t important to you.  


Appreciate your own life & express gratitude for what you have.
Being able to appreciate what you have in your life right now and be grateful for it doesn’t mean you can’t have hopes and dreams for the future. But it does mean you can find value in your life now, instead of losing sight of the present in hopes of what the future may look like. It also lessens the need to fill your life (and home) with things you don't really need or enjoy.


Spend time with people who share the same values as you.
Avoid spending time with people who make you feel bad about yourself. It won’t always be easy, but make an effort to spend time with people who are supportive and share the same values as you.


Take a break from social media.
What you see on social media is not 100% factual, you are only seeing what people want you to see. If checking out the filtered lives of others leaves you feeling depressed or like you don’t measure up….take a break. Spend less time checking out other people's posts and more time doing things that make you feel good about yourself and your life.


Be open to new opportunities.
Chances are there will always be a “missed opportunity” of some sort in your life but instead of feeling bad about it, and regretting it, understand that other opportunities will come your way. They may not be exactly the same, but there’s always the possibility they will be better.


Look for the silver lining in a missed opportunity.
For example: Maybe your financial situation didn’t allow for you to take a weekend away with friends. Instead, you could take a lovely day trip and catch up on some home projects, you’ve been putting off.


Think, before making financial commitments  
Take time to think about your purchases before you dish out your money. Do you really need it? How will it benefit you? Know your spending limits. If you use credit to make purchases, pay off the balance each month to avoid paying interest, if you can’t pay off the balance, create a repayment plan to pay it off as soon as possible.


If you need help, ask for it.
Dealing with the negative feelings associated with F.O.M.O. may not be easy. If these feelings are severe and you are unable to resolve them on your own and move forward… seek professional help.



Conquering the “fear of missing out” will not happen overnight, but by taking little steps you can loosen its grip and make it easier to feel OK about not having all the things and experiences your peers may have.

 
Embrace the joy of missing out.
​
Allow yourself to be present and in the moment, enjoying the things that make you happy, and what you have in your life right now.
 

Until next time…


Have a fantabulous day and always let your awesomeness shine!

Glenda

P.S. If you’d like to have relevant tips, strategies, and more delivered directly to your inbox….sign up for the “Kick Debt to the Curb!” (KDTC) Weekly. 

When you borrow money, whether it's to buy a house, refinance an existing property, buy a car, furniture or apply for credit cards, lines of credit, it makes sense that you would want THE best rate. I mean, who wouldn't?
 
But the truth is…

Not everyone can qualify for “The Best Rate”, and YOUR best rate may not be THE best rate...
 
Applying for credit is similar to getting insurance…the higher the risk, the higher the rate.  
 
There are different factors that determine the rate offered to a particular borrower and lenders have a system to establish the creditworthiness of potential borrowers, it’s called the 5Cs of Credit.
 
This system not only helps lenders decide whether or not they will finance a loan or give credit, but it also helps to calculate a borrower’s best rate and the conditions of the loan.

 
The 5 C’s of Credit
 
Character: The applicant’s credit history.
This information is collected from the major credit reporting agencies including Equifax and TransUnion. The reports contain information such as how much the applicant has borrowed in the past, if they repaid debts on time, if they have late payments, collections, bankruptcy, consumer proposals, liens and so forth.
 
Capacity: The applicant’s ability to repay the loan.
Lenders use the debt-to-income ratio (DTI) to help determine whether of not a new borrower can carry more debt. They calculate the DTI by dividing the total monthly debt payments by gross monthly income.  Every lender differs in their acceptable DTE, but the lower the better. Lenders may also consider time at current job, if it’s full-time, number of years in the industry and the job stability
 
Capital: The amount of money the applicant has left over after taking out a loan.
Lenders want to see that borrowers still have money or assets that can be liquidated into cash, should they need it. They don’t want to see folks with all their money tied up in their debt…it’s a greater risk if something should happen…something goes unpaid.
 
Collateral: Assets that can back or act as security for the loan.
For example a car is the security for a car loan, a house is the collateral for a mortgage. Collateral gives a lender a greater sense of security, should a borrower default on payment the lender can repossess the car or the house.
 
Conditions: The influencers that determine the lenders desire to finance the loan.
Conditions may include the purpose of the loan, the amount of the loan and the interest rate. There may also be influencers the borrower has not control over such as the cost of living, the economy and so forth.


As you can see there are many factors that determine the rate available to you but the bottom line is...
 
… if you are seriously looking to apply for a loan or credit, make sure the rate you’re getting is specific to you, and based on your specific details. When you have this information it’s much easier to determine your next steps.

Knowing your rate may determine whether or not you postpone a purchase or take actions to put yourself in a better position to borrow.

Until next time...
 
Have a fantabulous day and let your awesomeness shine!
 
Glenda

P.S. If you’d like to have relevant tips, strategies, and more delivered directly to your inbox….sign up for the “Kick Debt to the Curb!” (KDTC) Weekly.

In order to find an effective solution….one must have an understanding of what the problem is.

I mean, I wouldn’t go to my mechanic about a weird noise in my car and let him start replacing parts without first having him take a look at her, to figure out what the problem is.

(And yes, to me, my car is a “her” 😊)


But here’s the thing, many people try to break up with their debt without taking the time to gain an understanding of what’s holding them back, what's keeping them in debt, and blocking them from achieving their goals.

They may try different things hoping something will work for them….and sure, they may have some success, but quite often, it’s short-lived and they end up back in the debt-cycle again.

With set-backs come a feeling of defeat…they feel like they’ll never get out of debt. And we know what happens when we start to believe the stories we tell ourselves….the stories play out in our reality.


It’s much easier to find the solution that works, when you know what the “blocks” are.


There are many reasons why people get stuck in the debt cycle. Here are  10 common obstacles that stop people from getting out of debt:


Lack of Knowledge:
Not knowing the get-out-of-debt process can lead to spending time, energy and possibly money on “solutions” that just don’t work, or are short-lived. Skills and knowledge may be gained through reading books, watching videos, taking courses/workshops or even investing in working with a coach like me, and then implementing what’s learned.


Lack of Self-Confidence:
If a person does not have the confidence in their ability to get out of debt, they may find it difficult to ask and find the help they need to achieve their financial goals. Doing the same things over and over again makes it difficult to see the possibility of changing one’s situation. However, if they are truly committed to getting out of debt, they will find the courage to ask for help. With support, they may be able to find the little wins that give them hope and help them gain confidence.


Lack of Support:
When you’re financially attached to someone else, it’s much easier if they support you and are part of team “get out of debt”. It’s difficult to create and execute a household plan when the household members are not all supportive of it. This is where open and honest communication comes into play. Understanding and hearing everyone’s perspective is important in creating a plan that works for the household.


Not Having an Emergency Fund:
Unexpected expenses will arise, no doubt about it. Having an emergency fund can reduce the financial impact and reduce the need to dip into savings, spend money out of pocket or borrow, to cover the expense.


Lifestyle Change:
When someone is in debt, they are most likely spending more than they earn, and depending on credit cards and loans to buy the things they want, but can’t afford. To get out of debt, a financial lifestyle change is needed and new, healthy money habits need to be created.


Saying “No”:
During the get-out-of-debt process, being able to say “no” to spending money on the goods and services you don’t really need, is a biggie. Keeping in mind that it’s only a temporary sacrifice could make it a little more do-able. Allowing small indulgences, as well as finding alternative ways to live a joy-filled life may take the edge off and make it easier to stick with the plan.


High Interest Rates:
It takes longer to pay off credit cards and loans when interest rates are high because only a small portion of the payment goes towards paying off the principal. Increasing monthly payments and/or reducing interest costs may speed up the debt repayment process.


The Joy of Buying:
It’s not easy to say “no” to buying when people around you are spending money freely. Jealously…resentment…or just wanting to have the days of carefree spending back again can be tempting enough to derail the get-out-of-debt process. It doesn't mean you have to stop hanging out with your peeps, as long as they support you. Spending time with like-minded people who understand, and support your journey may make it easier to resist temptation. It's kinda like you trying to lose weight and your friends insist on tea chats at your favourite place for treats...that's not being supportive of you and your journey.


It’s a Journey:
Getting out of debt takes a process, and it’s a journey of transformation….which, unless you come into some big bucks quickly, can take time. It can become discouraging, especially if you have a lot of debt and you feel like you’ve been trudging along, sacrificing month after month, with no end in sight. That’s why it’s so important to have a picture of what your journey will look like, before you start it. Setting up milestones and monitoring your progress on a regular basis will help you stay motivated.


Money Mindset:
These stories lie beneath the surface, somewhere in the sub-conscious but they still have the power to impact financial decision-making and action-taking.  If need be, after the external blocks have been cleared, it may be time to dig a little deeper. Yes, finding and re-writing these stories may take a bit more time and effort but it could be well worth it...especially if these money stories are preventing someone from achieving their financial goals.


As you can see there are a number of blocks that can prevent people from getting out of debt. The key is to understand what your blocks are and what actions you can take to move past them.

This doesn’t mean that your journey is going to be all smooth sailing but at least if you have some awareness of what’s standing in your way…you can do something about it.


So what’s holding you back? What’s keeping you in debt?


Take time to reflect on this….


In order to break up with your debt ….you have to know what your blocks are… and then, when you figure it out…what are you going to do about it?


What actions are you going to take?


How are you going to invest in yourself?

…. your time,

…. your energy

…. your focus

…. and yes, possibly your money.


Some people need help to figure this stuff out, and that’s OK.

If you’re committed to getting out of debt, but you’re struggling to do it alone, I'm here for you.

If you are ready to take action….to invest in you, and you would like me to help you.... schedule a Clarity Call.

Let me help you find your starting point. YOU are worth it!​

Do you know how much interest charges on your debt are costing you per month?
 
This is not a question to put you on the spot or make you feel bad.
 
It’s just a way to bring awareness to your finances….and realistically, there’s probably a heckuva lot of people out there who don’t.
 
Quite often, people just look at the bills, see how much the minimum payment is, and take it from there.
 
But that’s really not going to cut it if someone is serious about breaking up with their debt.
 
Taking control of your money means change, but the changes don’t have to be big…for example, if someone doesn’t really pay attention to their financial statements…maybe one of the small changes could be committing to a few minutes a day to look through them….
 
I know sometimes ignorance can be bliss…but not when it comes to debt…
 
One great reason to take the time to pay attention to your financial statements, and learn how much you’re dishing out for interest charges, is so you can create a plan to reduce the amount you’re paying.
 
Imagine how great that would be!
 
Facing reality is a big part of the get-out-of-debt process…as painful as it may be.


Calculate the Cost of Your Debt Interest
 
If aren’t already doing it, here’s a little exercise to help you gain a clear picture of what your debt is costing you on a monthly basis:

1. List out your debts along with the interest rate, amount owed and minimum monthly payment for each.

2. Calculate the monthly interest cost for each using this formula:  
(Balance x interest rate) divide by 12 = monthly interest
 
Example:
Store Credit Card
Balance owing: $2500
Interest rate: 28%
 
Calculation:
 
($2500 x .28) = 700 /12 = $58.33 (monthly interest cost)
 
 
The monthly interest cost may not look like much for one debt, but when you add up the monthly cost for all your debts….it might be a more of an eye opener.
 
So what do you do with this information?
 
Well… now it’s time to look at how to reduce the amount of interest you’re paying.

 
One option is debt consolidation.
 
Debt consolidation can be done in a number of ways:

• A loan specifically for the purpose of consolidating debt
• Balance transfer to a credit card with a lower interest rate
• Line of credit
• Homeowners may be able to use their home equity

 
If debt consolidation is not an option, speak directly with your creditors. Many institutions have programs in place to help people in difficult financial situations. 
 
 
Reducing the amount of interest you pay is not a one-size-fits all solution and each option has it’s own set of pros and cons.
 
 
Before you sign on any dotted lines, make sure you know exactly what you’re getting into…and if you have questions, ask.
 
 
If you want to reduce the interest you’re paying and you would like me to help you figure it out… send me an email. 

Getting out of debt and staying out of debt takes more than just paying off your bills, and one of the most important parts of the process is understanding your money mindset.
 
Some people might think of this as woo woo b.s. but it isn’t….your money mindset can be described as your attitude, your beliefs, (positive and negative) around money and finances….your money stories.
 
…and these attitudes, beliefs and stories play an active role in the financial decisions you make, good and bad.  But here’s the thing…these beliefs are not always yours….
 
I know…. crazy huh?

 
How Was Your Money Mindset Formed?
 
When you were young, and more or less a walking sponge…your parents, friends, caregivers and other life “teachers” imparted their financial beliefs to you.  
 
Whether it was through words, or experiences…your attitude towards money and finances was being formed, probably even before you had any of your own actual dealings with money.
 
As an adult, although these beliefs and attitudes may be tucked away somewhere in your sub-conscious, your current financial situation, and your relationship with money may reflect what you “learned” so many years ago.

These beliefs can be positive or negative but if someone is struggling with money and debt, chances are, it’s the negative beliefs that are playing out. After all, if you believe something…you will act accordingly.  As Henry Ford put it,

“Whether you believe you can do a thing or not, you are right.”
 
 
How to Change a Negative Money Mindset
 
Shifting from a negative to a positive money mindset begins with awareness… Be mindful of your thoughts, your behaviours, and your actions around money. 
 
Only when you are aware of the stories that no longer serve you, can you change them.
  
When you think about money, what are some of the things you tell yourself? Take a few minutes to think about this, and write down your answers.
 
What are your thoughts and feelings about people you think make more money, or have more “stuff” than you? What about the people who have less?
 
This is an exercise in honesty, write down how you really feel…no one else has to see your answers…
  
Here are some common negative money stories… any of these sound familiar?
 
 
Common Negative Beliefs Around Money:

• Money is scarce. “ Money doesn’t grow on trees”

 

• Money can’t buy happiness.

 

• I’ll never get out of debt.

 

• Money is bad.  “Money is the root of all evil”

 

• Rich people are greedy and act “entitled”.

 

• I’m no good when it comes to money.

 

• I always make dumb decisions when it comes to money.

 

• I’ll never get a job that pays better.

 

• Money burns a hole in my pocket.

 

• If you want something in life, you have to work hard for it.

 

• There’s never enough money…(even when there is)

 

• People are “showing off” when they buy their big houses, and their fancy cars, they think they’re better than others.

 
But these are only stories people tell themselves, and stories can be changed. It takes time and effort but it can happen.


 
Explore Your Childhood Money Stories
 
Take a few minutes to reflect on your childhood and ask yourself these questions:

• What did you hear, and see about money growing up?

 

• When your parents talked about money, was it done calmly or with tension and arguments?

 

• What did your parents do with money you would replicate?

 

• What would you do different than your parents?

 

• How do you think your “inherited” money stories are affecting you today?

 
 
With greater awareness of your beliefs and attitude towards money, you can begin to transform your relationship with money.


 
Rewrite Your Money Stories
 
Using your list of negative money stories, choose the top 5 that reflect your current reality, and no longer serve you.  By rewriting these stories as positive affirmations, they will begin to impact your financial life in a positive way.
 
For example, let’s say one of your negative beliefs is, “I’ll never get out of debt.”
 
If this is the story you’re telling yourself, chances are, the choices you make, and your actions will reflect this story. And if you believe you’ll never get out of debt, guess what…you won’t.
 
Instead of repeating that old story, your new affirmation could be, “I will be debt-free.”
 
 
Create a journal and every day, once in the morning and again at night, write out your positive affirmations…keep writing the same affirmations until you feel your money mindset has truly shifted.


 
Take Control of Your Money One Small Change at a Time
 
Changes are more likely to stick when you take the approach of “slow and steady wins the race”. Trying to change too many things, too quickly will make it much easier to give up….
 
If you don’t normally pay attention to your financial statements, commit to taking few minutes a day to look through them.
 
Commit to track your spending, if you have no idea where your money is going…start out by just writing everything down…that’s it.
 
After you’ve created a habit of tracking your spending, commit to creating a spending plan at the beginning of the month, and using it.
 
Give to charity. Even if you begin with a few dollars a week, give….it’s a proven way to change your money mindset.
 
Allow yourself to dream, take a few minutes here and there, and allow yourself to visualize your ideal financial situation in detail, what does it look like, how does it feel, make it sensory, what can you smell, taste, touch, etc.? When the voice in your head starts crushing your dreams with it’s smack talk…thank it for it’s opinion, but let it go, that opinion no longer serves you.
 

 
Your Money Stories are Not Set in Stone
 
Your money mindset, and the stories you tell yourself, are not set in stone, the stories can be re-written.
 
Some stories may be so deeply ingrained, and connected to much deeper issues, that professional help may be required to help change the narratives, but every day offers a new beginning.
 
What happened yesterday, or at any point prior to this moment is past tense…it’s gone, and does not have to be repeated.
 
Your greatest super power is the power of choice, you can choose to take action, and make change happen.
 
In order to get out of debt, and stay out of debt it’s important to be aware of, and change any negative money stories that have the power to prevent you from reaching your financial goals.  

Good or evil?
How much is taking out a debt consolidation loan worth to you?
 
When it comes to getting out of debt there are multiple solutions available, including  DIY methods such as the Snowball/Avalanche and using balance transfers.   
 
They all have their benefits, but they also have their limitations, such as negatively impacting your credit and forcing you to make sacrifices. It’s important understand the pros and cons and to choose an option that works for you and according to your affordability and other financial conditions.
 
There are a lot of misconceptions around choosing the best debt relief option.
 
If you can’t afford to pay off your high-interest debts every month, and you don’t want to damage your credit by settling them, debt consolidation may be the best solution for you.
 
But can taking out a debt consolidation loan make you debt free? Is it beneficial or harmful for you?
 
Let us analyze the pros and cons of taking out a debt consolidation loan and clear our minds!
 
#Pros of taking out a debt consolidation loan
 
The main advantage of a debt consolidation loan is that you may pay off all the current debts by taking this loan. Your high-interest, unsecured debts such as credit cards you’ve been struggling to pay, your household utility bills, high-interest payday loans and medical bills, will all be paid fully. You may even repay your bank overdrafts.
 
A debt consolidation loan eases up the hassle of paying multiple unsecured debt payments each month, along with the ones which are past due.
 
You only have one monthly payment to worry about…the debt consolidation loan. Managing only one payment per month is way easier than coping with multiple payments!
 
Most low-interest personal loans are taken out as debt consolidation loans. So, this loan is cheaper than any of your existing credit card or payday loan interest rates. Consolidating at a lower interest rate gives you great savings in the long run.
 
Taking out a debt consolidation loan may help you to pay off debts faster. Credit cards don’t have a set timeline for completely paying off a balance. You have to pay a minimum balance every month and the interest grows every month. But, if you consolidate your debts with a loan, you’ll be working with fixed payments every month and repaying your debt faster.
 
The quicker you can pay off your debts, the sooner you can start investing more money towards fulfilling other life goals, such as an emergency or retirement fund.
 
If you have bad credit, you might still apply for a debt consolidation loan. But having a good credit and payment history will help you to get a better interest rate while you negotiate with the lender.
 
While taking out a debt consolidation loan you’ll face a hard credit inquiry. So, initially, it may lower your credit score a bit. But, a debt consolidation loan will improve your score over time, if you make on-time payments. Making on-time payments would raise your score because good payment history can influence credit score by 35%.
 
After paying off your old credit cards, if you still keep the accounts open, you’ll reduce your overall credit utilization. A low credit utilization ratio and a stronger payment history will help your credit score to rise again.
 
So, it can be said that consolidating debts through a loan can ultimately improve your credit score.

#Cons of taking out a debt consolidation loan
 
Apart from those immense benefits, taking out a debt consolidation loan may have some cons also. Lenders may approve unsecured debt consolidation loans and offer you cheap interest rates only if you fulfill some strict criteria. To qualify for a cheap consolidation loan, you may need a solid income, a high net worth, assets equally valued to your debts, or a co-signer (with a high net worth and a very strong credit score) if you have bad credit.
 
Few lenders may ask you for a security or collateral before approving your loan application. In this case, you may have to provide a good amount of assets as collateral.
 
Interest rates of personal unsecured loans are usually higher than a home equity loan. But you need to remember that taking out a cash-out-refinancing loan instead of a personal loan may prove devastating. If you somehow can't pay off the personal loan, your finances will be affected and your debts will increase. But if you can’t pay off a cash-out-refinance loan, you may lose your home entirely.
 
If you don’t have a steady income then taking out a consolidation loan will also become a financial issue for you. If you can’t make the monthly payment on time, the interest will pile up and increase your total debt gradually. Apart from that it will also affect your credit score and be added to the credit report as a bad item.
 
Some debt consolidation loans come with fees. Costs such as loan origination fees, balance transfer fees, closing costs, and annual fees can be charged to you. So, before applying for a debt consolidation loan, know about all fees, including late payments and early repayment penalties. If you don’t want to pay that cost, and only want to pay what you can afford, do not opt for such loans.
 
After considering the pros and cons of debt consolidation loans, it can be said that debt consolidation through taking out a loan will be a wise choice, for those who want to get rid of multiple monthly payments, as well as want to reduce overall interest rate. But you also have to remember that a debt consolidation loan might not work for you if you don’t follow a realistic household budget. It’s important to make your bill payments, loan payments and annual expenses when you have a debt consolidation loan.  

To get out of debt, you have to change your spending habits.
 
One such change, is to ONLY spend the money you have on hand or in your bank account…nothing more.
 
If it’s not in your hand or your account right now…you cannot spend it. This means no payday loans, no using credit…no borrowing money.
 
It will be difficult at first because most of us are used to instant gratification … if we want something we get it … no waiting and not having the money to pay for it, isn’t always a deterrent.
 
Practicing this way of spending, can save you money. Not only will you be spending less on interest charges but when you have to pay out of pocket or see the money leave your bank account…you may not be as quick to spend.
 
The money you save can be used for debt repayment and as you pay off your debt…you then have more money available for the more meaningful things and experiences.
 
If you don’t have a debt repayment plan and would like my help to create one, just click on the button below, send me an email and let’s connect.
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Realistically, we are all story tellers…but some stories are more damaging than others.
 
We tell stories when we share the latest news or when we share things happening in our lives.
 
We even tell stories when we try to get out of situations we don’t want to be in….you know what I mean… the little white lie you tell when you really don’t want to do something…. but can’t come right out and say it?
 
Well….that’s a story.
 
But the most damaging stories are the ones we tell ourselves that prevent us from achieving our goals.
 
These stories have an emotional attachment to them…

...and when we add emotion (positive or negative) to a story, it becomes more believable and it eventually plays out.
 
For example, let’s say your current story is ”I can’t get out of debt!”…and every time you think of your debt…you feel frustrated… you feel stressed out… you feel anxious…you feel fear.

By connecting so much emotion to this story…you make it real. Your thoughts, your actions and how you speak, start to reinforce the story and make it even more believable!
 
But the good news is…it's just a story…it can be re-written and your new story can be one that makes you feel happy, excited and hopeful!
 
I mean, first of all, how can you possibly know for sure you can’t get out of debt?
 
Today is a brand new day…a clean slate…anything that happened in the past is gone, it’s done…Even if you struggled with debt yesterday…it doesn’t mean today has to play out the same way!
 
When you tell yourself you can’t get out of debt…how does it make you feel?
 
Bad? Fearful? Anxious? Stressed? Frustrated? Mad?
 
I don’t know exactly how you feel... but I don’t think you’re jumping up and down, screaming at the top of your lungs, “Woohoo!! I’m up to my arse in debt! "

....No, I don’t think that’s happening.
 
If your story makes you feel anything less than happy…why invest your time and your thoughts into it?

Why reinforce that story?
 
Ask yourself these questions…. and give yourself an honest answer.
 
  
What story would serve you better?
 
Maybe your new story can be, “It is possible for me to get out of debt!”
 
Say it a few times…if the old negative beliefs start creeping in push them aside…even it’s just briefly.

How does your new story make you feel?

What positive emotions can you connect to it?
 
It does take more than just saying it, to get you to buy into the new story…it has to be totally convincing to you.
 
I mean, you’ve attached so much emotion to the old story…how can you shift that level of emotion (positive emotion) to your new story?
 
And yes, you do need to shift from you your old story to your new story because you can’t have both stories playing in your head at the same time.
 
It’s kinda like trying to drive a car with one foot on the gas and the other on the brake…no matter how hard you push on the gas….the brake (like your negative story) can stop you from getting where you to be.
 
And if it doesn't stop you, it will most certainly make it very difficult for you to get there!
 
That’s why it’s so important to take the power away from that negative story and give it to a new story that supports what you want to achieve.
 
For example:
 
Old story: "I can’t get out of debt because I'm not great at math."

New story: “I know how to use a calculator and there’s nothing I need to do that a calculator can’t handle.”
 

Old story: "I’ve tried to get out of debt before, but it just didn’t work for me." 
 
New story: “What I was doing before didn’t work…but I can learn new skills that will help me get out of debt.”
 

Old story: “If I’m in debt, I can’t afford to pay someone to help me.”

New story: “I really want to make this happen and I will find a way to do it.”  
 


If the story you tell yourself, makes you feel anything less than happy…it’s time to re-write it.  
 
Your story is meant to make you feel happy, excited and hopeful!
 
Disconnect emotionally and squash the beliefs from your old story.
 
It will take time to create and incorporate your new stories but you can do it! You just have to believe in you and your abilities to make change happen!

Have yourself a totally fantabulous day and always let your awesomeness shine!

​Until next time...